Embracer Group report: revenue increased, restructuring moved to the final stage
Embracer Group shared its financial results for October-December 2023. In the report, the Swedish company also said that it laid off several hundred more people during the quarter as part of the restructuring.
Risk of Rain Returns
Financial results
- Embracer Group closed the quarter with a net loss of 1.74 billion Swedish kronor ($165.5 million). For comparison, a year earlier, it made a net profit of 1.5 billion Swedish kronor ($142.4 million).
- Net sales increased by 4% compared to the previous year to SEK 12 billion ($1.14 billion).
- The board games segment brought in the most money — 4.4 billion Swedish kronor ($420.6 million). Growth of 7% in annual terms.
- Next comes the console and PC games segment with revenue of 3.38 billion Swedish kronor ($321.2 million). This is 5% less than in 2022. The vast majority of revenue came from projects from the back catalog - 2 billion Swedish kronor ($196.4 million). The new games earned 470 million Swedish kronor ($44.7 million).
- Speaking about new console and PC games, Embracer Group reported that Hot Wheels Unleashed 2: Turbocharged, Arizona Sunshine 2 performed a little worse than the company expected. The results of Wildcard Football were also below expectations. But the Risk of Rain Returns exceeded expectations.
- The quarterly top 10 highest-grossing console and PC games from the back catalog included Remnant 2, Dead Island 2, Chivalry II, Deep Rock Galactic, Payday 3, Goat Simulator 3, Star Trek Online — Live Game, Wreckfest, Risk of Rain 2 and SnowRunner.
- The revenue of the mobile games segment amounted to 1.6 billion Swedish kronor ($156 million), an increase of 4%.
- During the quarter, users downloaded Embracer Group-owned mobile games 258 million times. The total MAU and DAU of the games amounted to 236 million and 30 million people, respectively.
- The most successful mobile games from the back catalog were Sudoku.com , Alien Invasion, BlockuDoku, Art Puzzle and Jigsaw Puzzles.
- Revenue from the entertainment and services segment reached 2.6 billion Swedish kronor ($247.5 million). Growth of 12% in annual terms. Recall that this segment includes units that are not directly related to games. For example, the company Middle-earth Enterprises and the publisher of Dark Horse comics.
Restructuring
- Embracer Group CEO Lars Wingefors announced that the restructuring has moved to the final stage. He noted that in general everything is going according to plan, but the company is unlikely to have time to reduce the amount of net debt to 8 billion Swedish kronor ($760 million) by March 31, 2024.
- During the quarter, Embracer Group laid off 483 employees. In total, 1,387 people have lost their jobs since the restructuring began in June 2023. This is 8% of the company's staff. As of December 31, 2023, Embracer Group employed 15,218 people.
- During the quarter, Embracer Group closed seven games. These were mostly unannounced projects handled by PLAION, THQ Nordic and Gearbox. In total, since the beginning of the restructuring, Embracer Group has canceled 22 games.
- Embracer Group plans to get rid of several more assets. Which ones are not specified.
