Embracer Group CEO Lars Wingefors discusses how his decentralized digital empire mitigates risk by sheer breadth of content.
Lots of coverage has broken out about how Embracer plans to buy up more studios and companies, but this is par for the course for the European giant. Embracer isn't just a name--it's the group's raison d'etre. Of course it will buy up more developers, labels, etc. To date, Embracer has made 71 acquisitions worth over $8 billion, and Wingefors has previously confirmed more acquisitions will happen throughout 2022-23 but this time Embracer will be "more selective than ever," the CEO says.
In a recent Financial Times article, Wingefors said something that perfectly outlines Embracer's game plan. The group isn't trying to create one hit, but instead a myriad of titles that will help subsidize development costs, drive revenues, and eventually turn profits.
"If you can make one game, you have a big business risk but if you make 200 games, like we do, the business risk is less," Wingefors told FT.
There's no way to know what will be a hit--indie sensation Valheim was a massive success that helped spike earnings, for example--and instead of trying to focus on any one single game, Embracer's network of studios and multimedia companies are able to churn out enough titles simply by virtue of their number.
Embracer has eight operating segments with 18 publishers that vary from dedicated games, mobile titles, and multimedia from subsidiaries like Koch Media, who distributes film and TV shows throughout Europe.
The result is a multi-faceted, disparate group of companies who serve different markets and segments but are unified with one goal: Generate revenues through content delivery.
Like Tencent, the biggest video games company on the planet, Embracer Group takes a hands-off laissez-faire approach to operations management that allows each segment, publisher, and label to handle its own business. The management style has paid off big for the company as it delivered record earnings through 2021.
With access to over 270 video game IPs including major franchises like Borderlands, licenses to some of the most renowned properties on the planet, and a wide breadth of talent to serve all facets of the gaming market, Embracer is in a unique position to continue accelerating its long-term plan while accumulating unique growth opportunities in non-traditional segments like comic books and board games, which were the main impetus for its significant $2 billion Asmodee acquisition and its buyout of Dark Horse Comics.
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