Embracer CEO says it’s ‘too early’ to start buying studios again

Embracer CEO Lars Wingefors has told investors he believes it’s “too early” for the group to start considering studio acquisitions again, following the completion of its costly restructuring.

On Friday, the company confirmed the sale of Borderlands developer Gearbox to Take-Two in a deal worth $460 million. The deal marked the end of a 9-month money-saving operation, which saw the sale or closure of many studios, the cancellation of nearly 30 games, and more than 1,300 job cuts.

Surprisingly, on the day the restructuring was completed, CEO Wingefors was asked in an investor call whether Embracer was ready to start acquiring studios again, to which he replied it was “too early” to say.

“Looking to do more [mergers and acquisitions] deals – I think it’s way too early to start talking about restarting the M&A engines again,” he said, via RPS.

“Now we are in the late phases of the consideration into the future of the group, and that’s our highest focus and priority – how we set up ourselves and structure ourselves, and utilise our assets we have within the group, and have them work together, and how we leverage them better working together, utilising different functions.

“I think that’s our focus right now, to increase profitability and cashflow generation, by simply making better products and games.”

Over the past nine months, Embracer has spun off publisher Saber Interactive into a separate group, and closed studios such as TimeSplitters developer Free Radical and Saints Row developer Volition.

According to Wingefors, this week’s Gearbox sale “marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow.”

He said: “Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company.”