Back in May of this year, news broke that Embracer Group had lost out on a $2 Billion investment it had been counting on. The news was revealed during an earnings call that sent shares in the gaming giant tumbling. Embracer Group is very well known for its rapid acquisition of studios and IPs, spending big money to build up its arsenal. After months of speculation, Axios uncovered that the mystery partner that backed out was none other than Savvy Games.
Savvy Games, or Savvy Games Group, is the Saudi-backed gaming company that is funded by the PIF. The group has a goal of investing further into the gaming space, having already invested in Nintendo, Capcom, and Take-Two Interactive. Savvy Games even has a history with Embracer Group, having spent $1 Billion in 2022 acquiring stock in the company. It’s widely believed that Embracer used that cash influx to acquire the Lord of the Rings IP as well as some others. That history, plus Savvy Games commitment to spending more in the gaming space, is what makes this revelation even more intriguing. Neither side has commented on the news since Axios revealed it and the report does not give any indication of why the deal fell through.
The fallout from the deal collapsing is ongoing as Embracer announced the closing of Campfire Cabal, a studio it had only opened in September of 2022. Further reports say that they have begun closing and consolidating more studios to make up for the lost revenue and refocusing their goals. It’s not really clear yet which studios are disappearing and what projects are being cancelled. It’s likely more information on that will come out over time. The Tomb Raider project in partnership with Amazon is still moving forward and Embracer is still high on the Lord of the Rings IP as well. Only time will tell how Embracer Group ultimately adapts and it may never be clear what caused this deal to fall apart in the first place.
Image from: Savvy Games Group
