While the Embracer Group is a large company comprised of multiple studios, it doesn’t stick to AAA game releases, and isn’t averse to release smaller, niche titles. It seems the company has a good business plan in place that lets them do just that.
Speaking in the latest issue of EDGE magazine (issue #377), Embracer CEO Lars Wingefors talks about how the company can take risks in terms of releasing games, and explains that not a single project in the company takes up more than five percent of the total revenue in a single year.
Wingesfor: It goes back to our strategy of being diverse in terms of revenues and business risks. Not a single IP or project represents more than five per cent of our revenues in a single year.
In general, you get a good return on investment by increasing the barriers or the ambitions of each game – trying to make it a bit better or more polished, or to expand it, or whatever you’re trying to do. If you just have a handful of games, the business risk of each is too high. But if you have 200 games, you’re able to put that message to your game developers. You know: try to put some more time, effort and money into making the game even better.
In the same chat, when asked if Wingesfor sees a day when they’ll stop acquiring companies, the short answer is no.
Q: So you can’t foresee a point when you’re done with making acquisitions?
Wingesfor: No, not really. If you think about Embracer, the wider we become, the greater the overall ecosystem, the more opportunities and abilities we have, the more diversification we have. So, for us, it just makes sense to add more companies to strengthen the overall ecosystem. I really like to focus on acquisitions where there is strong collaboration or synergy potential within the group that really adds value to the overall group. Unlike other, more private-equity-funded structures, we are not a financial rollup, as such. We have firm long-term thinking about all our companies.
Which company will Embracer acquire next? Once we know, we’ll be sure to let our readers know. Speaking of which, the latest high profile acquisition of Embracer was the buyout of some of Square Enix’s Western studios which included Crystal Dynamics, Eidos Montreal and Square Enix Montreal for $300 million this year.
(Image source: Shacknews)