"So overall, good progress and we push on."
Image credit: Volition | Saints Row
We've been hearing a lot about restructuring efforts at Embracer Group lately: the company is closing studios and canceling projects, trying to transform itself into "a highly cash-flow generative business." And it seems to be working: the Group's net sales jumped 13% in Q2. But, naturally, it means huge layoffs at this already economically challenging time.
In a recent interview with Gamesindustry.biz, Embracer's interim chief strategy officer Phil Rogers addressed the issue, saying what you probably expect him to say. To the organization, the human cost of the restructuring program is tragic, but it has to be done.
"It's been an agonising process to see the sort of headcount [reduction], but we know it's a necessary thing for us to hit our new and needed goals. So overall, good progress and we push on."
As a result of this "good progress", Embracer reduced its debt from $1.5 billion to $1.4 billion and is planning to bring it down to $757 million by the end of the fiscal year in March 2024.
Its pipeline with over 200 games in development will certainly help it reach the goal. Rogers thinks Embracer has "one of the broadest and deepest games pipeline in the industry," and it might be true considering how many studios and games it owns. To decide which titles are worth working on, the company looks at "entertainment values."
"It has to be fun to play. I'm never a big fan of the 'fewer bigger, better' [approach]. Bigger games aren't always fun. ... Then we do look at how we would assess the commercial outcomes, how we squint and would see those returns. There's the potential for genres as well, where we've got overlap in potential genres or whatnot… That would help us make some decisions."
To make so many games, big or small, and more, Embracer needs a lot of studios, and that's why it used to acquire them often. Unfortunately for the industry, now that the COVID times have passed and people don't play games as much, some of them have to go. "We've taken on a lot, but it's in that pursuit to change and evolve and grow, and now we're just in that different climate."
This situation is global, the peak of gaming struck in 2020, making big companies buy smaller ones, and now it's not viable to keep them afloat.
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