Embracer Group’s unexpected problems and the success of Dead Island 2

Swedish video game company hug group announced its financial results, plans for publishing games and, above all, the major breakup of an important partnership.

The financial results report for the fourth quarter of the financial year 2022/2023 showed that net sales increased by an impressive 79% year-on-year to SEK 9.356 million. This growth was distributed across different segments:

• PC/Console games: Up 66% to SEK 3.478 million.
• Mobile games: 25% reduction to SEK 1.317 million.
• Table games: up 438% to SEK 3.074 million.
• Entertainment and services: 83% increase to SEK 1.487 million.
• Earnings before interest and taxes amounted to a loss of SEK 95 million.
• For the entire financial year (April 2022 to March 2023), net sales increased by 121% year-on-year to SEK 37.665 million. CZK in the following breakdown.
• PC/Console games: Up 58% to SEK 13.444 million.
• Mobile games: up 19% to SEK 5.819 million.
• Table games: up 2,199% to SEK 13.132 million.
• Entertainment and services: up 70% to SEK 5.270 million.
• Earnings before interest and taxes amounted to SEK 194 million.

For the fiscal year ending March 2024, Embracer Group revised its previous estimate of adjusted earnings before interest and taxes to SEK 7-9 billion ($655 million to $843 million). Initially, a profit of 10.3 to 13.6 billion Swedish kronor (964 to 1.27 billion dollars) was assumed.

However, the biggest news is the collapse of the two billion dollar deal. Since the publication of this report Embracer Group shares fell over 40%. In a statement, the company explained the situation in more detail:

“Negotiations took much longer than we expected, although we already reached a verbal agreement in October 2022. The particular deal included more than $2 billion in contract development revenue over six years. This agreement will offset the costs already invested in the development of several major games.”

It turned out that several highly rated consultants and hundreds of people from both sides participated in the deal. The documentation was ready for implementation, but the previous evening the company received a negative result from the counterparty, which was completely unpredictable for the management and the board of directors.

However, the company stressed that it remains interested in partnering and working with third parties across all of its segments. However, despite the setback, it intends to work with third parties across all of its segments and segments. strives to create quality games. With plans for unannounced games and a number of other big budget titles, we can look forward to an exciting future from this gaming company.

Back in February, Embracer Group already announced its ambitious plans to release 31 AAA games by fiscal year 2027/2028, 19 of which should be released before March 2026. “significant titles”. Perhaps we will see some of them in the coming weeks, for example on 8.6. Showcase of the Summer Game Festival. A game Remainder 2 already confirmed for summer 2023 and a release date could emerge in the coming weeks.

On the other hand, several unannounced games have been delayed past the end of the current fiscal year (ending March 2024) because they “will need more time to meet high quality expectations and reach their full commercial potential.” Their release is now scheduled for next year (by March 2025).

Shooting Warhammer 40,000: Space Marines 2 should come out this year. In the summer, gameplay from the co-op event will be revealed again. payday 3, which is wanted by over a million players on Steam. Its platforms have yet to be confirmed, but it will arrive on consoles and PC. Both games will appear in Embracer Group plans until March 31, 2024.

Recall that in recent years Embracer Group has been massively buying up smaller publishers and developers. Today, this group includes, among others, Saber Interactive (World War Z), Gearbox Entertainment (Borderlands), Crystal Dynamics (Tomb Raider) or Eidos Montreal (Deus Ex, Thief). He also owns the Czech studio Warhorse Studios (Kingdom Come).

Dead Island 2 over 2 million copies have been sold. This made the game the biggest launch in PLAION (Deep Silver) history both in terms of units and sales within the first seven days of release.

Lars WingeforsCEO of Embracer Group, stated: “I am pleased to announce that over two million copies of the game have been sold. It’s great to see that the decision to give Dambuster Studios the time to polish the game has paid off.”

Dead Island 2, the highly anticipated zombie game, was released on April 21 and sold over a million copies in three days. Originally announced in 2014 under Yager Development, it subsequently moved to Sumo Digital in 2015, and in 2019 all previous teams were replaced by Deep Silver’s own studio, Dambuster Studios, who worked on Homefront: The Revolution.

Dead Island 2 is available for Xbox One, PS4, PS5, Xbox Series X/S and PC. Expansion Pass plans to release two DLC story chapters that will bring new enemies, weapons and other elements.