Embracer Group, the massive games holding company that’s been gobbling up developers, publishers, and properties left and right over the last decade, just saw a major deal fall through unexpectedly at the last minute — one that would have possibly made the company billions.
During its full-year earnings call today, Embracer Group explained the rather unusual situation, specifically because of its impact on the company’s projected earnings. According to Embracer, it had a “verbal commitment” for a major deal made in October 2022 which would have included “more than USD 2 billion in contracted development revenue over a period of six years.” The partnership supposedly involved “many of the highest rated global advisories onboard with several hundred people engaged on both sides” and final paperwork was even finalized as of yesterday.
However, when Embracer asked to execute the deal ahead of its earnings, the other party pulled out unexpectedly, significantly throwing off Embracer’s financial projections for the coming years.
But the mystery deal falling through isn’t the only major factor impacting Embracer’s projections for the coming years. Embracer also revealed in its earnings that it, like other major publishers such as Ubisoft, Take-Two, and more has had to quietly delay multiple unannounced games that were meant to launc this fiscal year.
“Consequently, several games with the potential to generate more than SEK 1 billion [$93 million] in net sales are now slated for FY 2024/25,” the company said.
As a result, Embracer has brought down its earnings projections for the coming year. Previously, it was expecting to bring in SEK 10.3 billion ($961 million) to SEK 13.6 billion ($1.268 billion), but it’s now expecting between SEK 7 billion ($653 million) and SEK 9 billion ($839 million).
Embracer has long been building a small video game empire of sorts with the numerous companies it’s acquired over the years. Its portfolio includes companies such as THQ Nordic, Plaion, Saber Interactive, Gearbox, Middle-earth Enterprises, Dark Horse Media, Coffee Stain, Crystal Dynamics, Eidos-Montreal, Asmodee, Amplifier, Deep Silver, and numerous others. And while Embracer has enjoyed a steady cadence of releases from many of these over the years, it has yet to full realize the potential of its many, many investments with a big year of major releases.
While Embracer seems to have previously expected its breakthrough moment this coming year, it’s now preparing for such an event in the following two years, saying the company is nearing a “notable inflection point” in its business.
Rebekah Valentine is a senior reporter for IGN. You can find her on Twitter @duckvalentine.
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