Embracer's revenue declined by 24%, reaching $754 million, as a result of challenging comparisons with the performance of Dead Island 2
Embracer Group's financial report for the first quarter of the fiscal year reveals a 24% drop in net sales, amounting to SEK 7.9 billion ($754 million) compared to the previous year.
The company's mobile, tabletop, and entertainment segments also experienced decreases in revenue, which Embracer attributed to fewer new releases this year.
Sales of PC and console games fell by 34%, a decline due to a comparison with the second quarter of 2023, which featured the success of Plaion's release, Dead Island 2.
Financial Overview
Summary for the quarter ending June 30, 2024
- Net Sales: SEK 7.9 billion ($754 million, a decrease of 24% from the previous year)
- Net Loss: SEK 2.2 billion ($210 million, in comparison with a loss of SEK 2.3 billion, or $219.4 million, the prior year)
- Net Debt: Reduced to SEK 14.3 billion ($1.37 billion) from SEK 16.8 billion ($1.6 billion) as of June 30, 2023.
Key Insights
Tabletop games emerged as Embracer's top revenue source, generating SEK 3.04 billion ($290 million) despite a 5% yearly decline.
The PC and console segment followed with SEK 2.7 billion ($253.5 million), including SEK 146 million ($14 million) from new titles, a dramatic 91% reduction year-on-year. While Dead Island 2, released in April 2023, sold a million copies swiftly, the main new titles for Q2 2024 were Homeworld 3, MotoGP 24, Gigantic: Rampage Edition, and Oddsparks: An Automation Adventure, for which no sales numbers were disclosed by Embracer.
Looking ahead, the release of Kingdom Come Deliverance 2 is slated for February 11, 2025, positioned to be Embracer’s major launch of the financial year, though initially targeted for a 2024 release.
Income from mobile games reached SEK 1.389 million ($132.6 million), noting a slight 3% drop, yet profitability has improved for both mobile and tabletop segments.
The entertainment and services arm dipped by 54%, down to SEK 848 million ($80.9 million), another result of fewer new products.
On broader corporate strategy, CEO Lars Wingefors confirmed that plans to divide the company into three independent entities are on track. Tabletop legend Asmodee will spearhead this transition with listing on Nasdaq Stockholm by year’s end and further details forthcoming during the capital markets event set for Q3 (October to December 2024).
Projected for 2025, the entities will take on the names 'Coffee Stain & Friends' and 'Middle-earth Enterprises & Friends,' with specific dates yet to be finalized.
