Embracer Group is the emblem of short-sighted strategies that the entire sector is paying the price for

Hugging group You keep losing pieces, in between Thousands of people were fired, studios were closed and projects were cancelledThis represents perhaps the most striking example of the evil choices made by much of the video game industry during the great pandemic-era gold rush whose consequences today's professionals are paying.

If you visit our pages often, you will know very well that the last two years have been filled with a lot of satisfaction for players, but also disastrous for those working in this sector. On the one hand, a very large number of high-profile games have arrived, and on the other hand we have seen many development studios close and people lose their jobs.

Let's talk about More than 18,000 layoffs from 2023 to todayOf these, 7,800 this year alone, at least according to data from videogameslayoffs.coma portal that, as the name suggests, was created specifically to track the unprecedented waves of layoffs that have hit the sector in recent years.

These reductions are due in part to Evil management focused on rapid and uncontrolled growth During the pandemic, in anticipation of a massive market expansion (since thanks to quarantine, many people moved closer to video games) which ultimately did not materialize. But this is only one of many possible reasons, which obviously change depending on the reality examined, and which also include a continuous growth in development costs that does not keep pace with market costs and the global economic crisis.

Embracer Group from acquisition drive to layoff drive

However, if we think about Embracer Group, the first thought goes straight away Huge acquisition campaign Which took place during the Covid period and the period immediately following it, which was characterized by multiple millionaire acquisitions (in hindsight, probably done under the slogan “ndo cojo cojo”), with the aim of building an impressive and diversified portfolio of intellectual property and a sprawling structure capable of dealing with all sectors. Main entertainment, not just video games.

We recall that in 2022, the giant organized itself into 11 operating groups, including those led by Dark Horse (comics, TV series and films) and Asmodee (a company specializing in board games, which paid $3 billion in 2021), for a major project. Total of Over 14,000 employees and a catalog of 900 private or licensed IP addressesincluding The Lord of the Rings.

There was a lot of talk in the gaming world at the time 220 games scheduled by 2025, including 25 Triple-A gameswith the list of studios under Embracer's wing including studios and publishers such as Deep Silver, THQ Nordic, Plaion, Crystal Dynamics, Saber Interactive, and Gearbox Interactive, as well as a large number of smaller studios.

And then the decline began. Since June 2023, the giant has begun a large-scale restructuring of the company, and almost every month there is always some bad news for players. Just to mention some of the more notable cases, among the closed studios are Volition (Saints Row), Free Radical Design (Timesplitters), and Campfire Cabal (Expeditions). In total, there have been approximately 1,400 layoffs to date, with more planned for the future, including Gearbox, its Lost Boys subsidiary, Eidos Montreal, 3D Realms, Splitgate, Cryptic Studios, Zen Studios, New World Interactive, and many more. Obviously, there have also been many cancellations of projects, 29 of them between July and December 2023 alone.

The latest news now also talks about a possible separation from Gearbox, with the Borderlands software house that could buy its independence or sell it to another company, and about Saber Interactive, which instead seems very close to being sold, according to Jason Schreier. In short, two of the biggest studios acquired in previous years.

What happened? As mentioned above, the bubble simply burst. The pandemic is over, people are starting to leave their homes again, and the miraculous growth the sector witnessed between 2020 and 2022 has come to an abrupt halt, as companies in this sector find themselves facing a crisis. Redundant employees and the need to make ends meetAnd also because in the meantime there is always the age-old problem of development costs growing at a runaway pace, unlike those of the pool of potential consumers.

Embracer Group is the most striking case precisely because of the numerous acquisitions made in previous years, but the layoffs in the sector prove that this evil expansion strategy has been adopted by all champions of the market. Those who pay the consequences are primarily the workers.