A rich guy salutes his latest big gaming deals.

Image: Volition / Deep Silver

The video game industry is undergoing a tidal wave of consolidation right now, and Swedish holding company Embracer Group is riding it to become one of the newest players in a rapidly shrinking space. A few years ago most people had never heard of it. Now it’s bigger than rivals like Ubisoft and Capcom, and set to get even bigger as it scoops up Square Enix’s Tomb Raider and Marvel’s Avengers studios.

I wish there was a succinct way to explain what Embracer is and where it came from, but there’s not. It began as a nesting doll of investment companies that started out in retail. It’s now a sprawling network of independently operating publishing arms and individual studios that make and sell every type of game you could imagine. The brainchild of Swedish businessman Lars Wingefors, Embracer was formed in 2011 and it has been buying up other game companies ever since.

It was originally called Nordic Games Holding, and grew out of Wingefors’ prior experience selling excess video game stock on the international market. Instead of selling leftover games from EA, Nordic eventually decided to start selling its own. First it snatched up Austrian publisher JoWooD’s assets (Gothic, SpellForce) in a 2011 bankruptcy, and then notably many of the remains of THQ (Darksiders, Homefront) in 2013, after which it rebranded as THQ Nordic.

At the time, it seemed like grave robbing, but possibly even less lucrative. By now it’s clear Nordic Games’ ambition went well beyond just being zombie THQ and giving the world Darksiders III. The holding company went public in 2016, rebranded as Embracer in 2019, and now owns over 100 studios and publishers housing over 10,000 employees, making it bigger than Activision Blizzard in terms of sheer body count.

About the only thing the group has done outside of buying stuff was hold a roundly rebuked 2019 AMA with 8Chan. “I condemn all unethical content this website stands for,” Wingefors later wrote in an apology. “Even if no one within the THQ Nordic Group would ever endorse such content, I realize simply appearing there gave an implicit impression that we did.”

Monday’s $300 million agreement to acquire Crystal Dynamics (Deus Ex), Eidos Montreal (Guardians of the Galaxy), and Square Enix Montreal (Hitman Sniper) is one of Embracer’s most high-profile deals yet. In addition to getting the rights to things like Thief, Legacy of Kain, and more than 50 other “back-catalog games” (i.e. Gex), the sale would also see Embracer’s ranks swell by another 1,100 game developers. But in purely monetary terms, it would be one of the smaller checks Embracer’s investors have cut in recent years.

Here’s who else it recently bought:

  • April 2020: Port house Saber Interactive for $525 million
  • February 2021: Borderlands maker Gearbox Entertainment for $1.3 billion
  • April 2021: Ad-supported mobile game publisher Easybrain for $640 million
  • April 2021: Star Wars remaster machine Aspyr Media for $450 million
  • August 2021: 3D Realms and seven other studios for $313 million
  • December 2021: French board game and RPG publisher Asmodee for $3 billion

While mega publishers like EA and Activision rely on selling tens of millions of copies of a few annualized franchises, Embracer has been busy buying dozens of baskets and stuffing a few eggs in each. Its subsidiaries publish everything from Biomutant to World War Z. It owns 4A Games, which makes the post-apocalyptic Metro series, as well as Dambuster Studios, which made Homefront: The Revolution, and is the latest studio to be cursed with developing Dead Island 2, a sequel that’s been MIA for eight years. In addition to scooping up THQ’s old properties (it bought Kingdoms of Amalur in 2018), it’s added newer indie studios behind cult-hits like Ghost Simulator and Little Nightmares.

If you want to get a sense of just how much of a labyrinth the Embracer acquisition rabbit hole is, consider the mind-bending case of the upcoming Saints Row reboot. The GTA parody series was created by Volition, the storied studio behind Descent, Summoner, and Red Faction. THQ acquired Volition in 2000. When THQ went bust in 2013, Volition was sold to Koch Media became part of Deep Silver. Summoner and Red Faction were sold to Nordic Games. In 2018 Nordic Games finally bought Koch Media too.

In addition to reuniting old gaming IPs, Embracer has tried to reform long-gone studios. Free Radical Design was formed by developers who worked on GoldenEye 007 and Perfect Dark for the Nintendo 64 in 1999. In 2000 it released TimeSplitters. In 2008 it went bankrupt and was sold to Crytek. That went terribly, and eventually whatever was left was sold to Koch Media. Last year, Embracer reformed Free Radical Design with original founders Steve Ellis and David Doak to bring the “much-loved” TimeSplitters IP “back to life.”

When THQ went bankrupt, it seemed like a sign that there was no room left for mid-sized publishers in an industry dominated by first-party staples and $100 million blockbusters. Embracer’s strategy seems to bear that out. Instead of trying to be king of the hill it’s going to be king of the rest. It rarely releases major games, but one of its bets occasionally hits big like 2021’s viking survival sim, Valheim.  

Who knows how that will work out. Hopefully it means developers at Eidos Montreal will get to keep their four-day work week and we’ll eventually get another Deus Ex that doesn’t have the fortunes of an entire company riding on its shoulders.


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