Embracer CEO Lars Wingefors told investors that the PC/console business is the “bad guy” within the company.
When asked why Embracer no longer provides clear quarterly guidance, Wingefors said there’s “heterogeneity” within the PC/console segment that means it can’t see too far into the future. One example: Kingdom Come: Deliverance II, published by Embracer subsidiary Deep Silver, has been delayed until February 2025 (thanks Eurogamer), after originally being scheduled to launch this year.
Wingefors reiterated that the overall business was performing in line with expectations, but suggested the PC/console division remained in a “volatile” position, particularly when compared with other businesses such as board game maker Asmodee.
“Azmodi is a great company to own from the standpoint of how consistently they’ve delivered their numbers,” Wingefors said during a question-and-answer session with investors.
“The same goes for the mobile business. The PC/console business is the ‘bad guy’ because it’s a bit volatile. But I’m also very confident and optimistic about the future prospects of that business, especially now after the restructuring.”
The restructuring plan saw Embracer sell off key assets, including Gearbox Entertainment and Saber Interactive, as well as mass layoffs, canceled projects and studio closures.
As reported in its financial report for the quarter ended June 30, 2024, net sales for Embracer’s PC/console business fell 34% year-over-year to SEK 2.65 billion ($253.2 million).
The Swedish company attributed the drop to “lower release activity” and a “harsh comparison” to the previous year due to the release of Dead Island 2 in the same quarter.
“Excluding the comparative quarter release of Dead Island 2, organic growth was 15 percent in the first quarter,” Wingefors added. “The adjusted EBIT margin of 5 percent was impacted by the write-off of lower ROI releases in the prior 24 months. New content released for Deep Rock Galactic, Remnant II and Dead Island 2 performed well, in line with management’s expectations.”
Elaborating a bit more, Wingefors said Embracer’s broader PC/console pipeline “looks strong” and that the company still expects to “release 3.9 billion Swedish kronor worth of finished games during the financial year.”
