Embracer may sell Gearbox sometime in March

In a bid to cut costs and boost available cash on hand, the Embracer Group will reportedly sell Gearbox Entertainment next month to an undisclosed buyer.

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The Embracer Group will reportedly sell Borderlands creator Gearbox Entertainment next month, sources have told Kotaku.

Embracer may sell Gearbox sometime in March 111

In October 2023, Reuters and Bloomberg reported that Embracer Group was trying to sell some of its operating groups to recoup cash. Gearbox, the team behind the mega-popular billion-dollar Borderlands franchise, was on the potential divestment list. Now sources tell Kotaku's Ethan Gach that a Gearbox sale is currently being finalized.

So why is Embracer selling one of its most lucrative operating units? After all, the Borderlands franchise has sold over 83 million copies total, and Gearbox accounted for double-digit percentage shares of Embracer's quarterly revenue right from the get-go. The rationale is pretty simple: The company needs money to help triage a missed billion-dollar deal.

The decentralized gaming empire was dealt a significant blow when a $2 billion deal with an unnamed party had fallen through (sources tell Stephen Totilo that Saudi-funded Savvy Games Group was the mystery party).

Embracer was really depending on this fortune to help keep its operations going. In 2021, Embracer bought Gearbox in a deal worth up to $1.3 billion, with $363 million paid upfront in cash and shares, and the $1 billion bonus provision in certain thresholds are met across a six-year span.

Now years later, after the successful release of the recent Tiny Tina's Wonderlands game, reports indicate that Embracer is looking to sell Gearbox Entertainment.

The company is made up of four divisions:

  • Gearbox Software, a creative developer of multiple original AAA game titles and franchises.
  • Gearbox Publishing, the publishing unit has over the past few years established itself on the North American scene, focused on bringing titles from top independent developers to market.
  • Gearbox Studios, which oversees and guides full maximization of their IPs and transmedia including the development of television, motion picture, and other related adaptations of their intellectual property.
  • Gearbox Properties supports the vision of Gearbox Entertainment by guiding the collective vision, the creation growth, and strategy of Gearbox Entertainment universes, characters and products, and serves as a coordination unit for transmedia and business units for their valuable IPs.

While Gearbox's current financial performance is a mystery (it's likely up thanks to Wonderlands), the division made over $128 million across the last three quarters of 2021.

Embracer may sell Gearbox sometime in March 32
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Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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