The gaming industry has been experiencing a wave of layoffs, and Embracer has been hit particularly hard. In an interview with Game Informer, interim chief strategy officer Phil Rogers spoke a bit about why the layoffs have been occurring and the effect they have had.
Rogers explains that the business is in a period of restructuring, and this unfortunately comes with a human cost. He states: “it’s been an agonizing process to see the sort of headcount [reduction], but we know it’s a necessary thing for us to hit our new and needed goals.”
It doesn’t seem like the worst is over yet, as Embracer claims it is still in its early stages of restructuring. According to Rogers, we can expect “some more cancellations, potentially some more closures or management buyouts.”
Embracer’s future
As previously announced, Embracer has laid off over 900 employees this year alone across numerous studios. This comes after a period of rapid studio acquisition. In an open letter, the company stated that the layoffs were occurring due to the group shifting from a “heavy-investment-mode to a highly cash-flow generative business.”
Along with the staff reduction, a few Embracer studios have been shut down permanently, including Volition. Despite this, Embracer claims it still has over 200 games in development across its several studios. The focus isn’t solely on big AAA games, as Rogers believes that “bigger games aren’t always fun.”
Although Embracer is enduring some turbulence, Rogers is still optimistic. He has high hopes for the industry because “the demand for content has never been greater.” He also believes the business is in a good place financially. Embracer is “going to readjust that games pipeline down to the run rate we talk about is SEK 5 billion ($478.4 million) going into next fiscal year,” and it is in line with its targets to bring its debt down.
In the last few years, Embracer has had a significant impact on the industry. Time will tell whether that impact will be positive or negative for creators and players.
