By Sagar Mankar 
Swedish gaming behemoth Embracer Group, known for franchises like Tomb Raider, Borderlands, and The Lord of the Rings, has disclosed its performance for the second quarter of its financial year, spanning July to September 2024, and not all appears well.
Overall sales plummeted by 21% compared to the same period last year, with all its segments—from PC and console games to mobile games, tabletop games, and entertainment services—experiencing a steep decline in sales.
The company is undergoing substantial changes as it attempts to steer through turbulent times, marked by recent splits and the sale of multiple game studios.
Key Financial Highlights
Q2 FY2024 (July-September 2024):
Overall Sales Performance:
- Total net sales: 8,552 million SEK / $778.3 million (down 21% from last year)
- Operating profit (EBIT): 468 million SEK (improved from -836 million SEK last year)
- Adjusted profit margin: 14% (decreased from 17% last year)
Segment-wise Sales Breakdown:
- PC/Console Games: 2,121 million SEK / $193 million (46% decrease)
- Mobile Games: 1,358 million SEK / $113.5 million (8% decrease)
- Tabletop Games: 3,826 million SEK / $348.2 million (6% decrease)
H1 of FY2024 (April-September 2024)
- Total net sales: 16,485 million SEK (23% decrease from last year)
- PC/Console Games: 4,778 million SEK (40% decrease)
- Mobile Games: 2,747 million SEK (6% decrease)
- Tabletop Games: 6,865 million SEK (5% decrease)
During the presentation, CEO Lars Wingefors displayed what he called a “depressing” chart showing how their games are performing financially. Unfortunately, many of the dots in the charts fell below the break-even line, indicating that several games aren’t making enough money to cover their development costs.
Sales of new games for PC and consoles amounted to SEK 266 million ($24.1 million), down 81% year-over-year, due to strong performances of Remnant II and Payday 3 last year.
Two of their recent releases, Epic Mickey Rebrushed and Monster Jam Showdown, haven’t yet reached profitability, though Wingefors remains hopeful they’ll cross that threshold soon.
On the contrary, Satisfactory (PC version) performed above expectations, reaching over 200k concurrent players across Steam and the Epic Games Store. The game peaked at 186k CCU on Steam alone.
The top 10 games by revenue are:
- Remnant II
- Dead Island 2
- Star Trek Online
- Kingdom Come Deliverance
- Deep Rock Galactic
- MX vs. ATV Legends
- Welcome to Bloxburg
- Goat Simulator 3
- Payday 3
- Neverwinter Online
Streamline the Business
In response to these challenges, Embracer has been streamlining their business. They recently sold their mobile gaming company Easybrain to Miniclip for $1.2 billion, which has helped them significantly reduce their debt from $1.2 billion to just $46 million. Easybrain was initially acquired by Embracer in 2021 for $640 million, with additional potential earnouts, but has since struggled.
This marks another sale by Embracer this year following earlier sales of Gearbox to Take-Two Interactive and Saber Interactive to Beacon Interactive, formed by ex-Embracer co-founder.
The company has also scaled back considerably over the past year. Their game development pipeline has shrunk from 215 projects to 128, and their workforce has decreased from 16,601 to 10,450 employees.
Upcoming Releases and Future Outlook
Looking ahead, Embracer has several major games in development:
Confirmed Date:
- Kingdom Come: Deliverance II (February 11, 2025)
Releasing either in H2 FY 2024/25 or FY 2025/26:
- Deep Rock Galactic: Rogue Core
- Fellowship
- Gothic 1 Remake
- Hyper Light Breaker
- Killing Floor 3
- REANIMAL
- Satisfactory (console version)
- Titan Quest II
- Tomb Raider IV-VI Remastered
- Wreckfest 2
Notable Board Game Releases (Q3):
- LEGO® Monkey Palace
- The Lord of the Rings: Duel for Middle-earth™
- Star Wars™: Unlimited Set 3: Twilight of the Republic
Despite current challenges, Wingefors remains optimistic about the company’s future. The sale of Easybrain has strengthened their financial position, and they’re continuing to focus on releasing high-quality games rather than rushing them to market.
The company is also moving forward with plans to separate its tabletop gaming division, Asmodee, into its own company.
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