Gaming titan Embracer Group to split into three new companies

Gaming monolith Embracer Group announced today that it will break up into three new gaming and entertainment companies.

The Swedish holding company, which owns many big-name gaming franchises such as Tomb Raider (whose protagonist Lara Croft was recently voted the most iconic game character of all time), Saints Row, and Kingdom Come: Deliverance, will become three distinct entities with separate goals and mandates.

The companies will be called Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The separation will allow a clearer focus for each company and is part of a larger restructuring process Embracer began last year in order to reduce its net debt.

What will each spin-off company do? Asmodee Group

Asmodee Group will continue to focus on tabletop game publishing and distribution, alongside digital board games. It will consist of 23 fully owned studios and 300+ IPs. It is expected that ongoing collaborations between Asmodee and Middle-earth will continue after the spin-off is complete.

Amongst the IPs that Asmodee will retain are popular board games such as 7 Wonders, Ticket to Ride, Catan, and Azul. They are also developing a number of licensed properties including Lord of the Rings, Marvel, Lego, and Star Wars.

Coffee Stain & Friends

Coffee Stain & Friends will focus on indie and A/AA games, both premium and free-to-play. Several studios owned by Embracer will fall under the new Coffee Stain umbrella, separated into two segments, premium and free-to-play.

The premium branch will include Coffee Stain, Ghost Ship, THQ Nordic, and Amplifier Game Invest. IPs include Deep Rock Galactic, Goat Simulator, Valheim, and over 200 more IPs. The free-to-play branch will include Easybrain, Deca, CrazyLabs, and Cryptic. Free-to-play IPs include sudoku.com, Blockudoku, Star Trek Online, and D&D Neverwinter Online.

Middle-earth Enterprises and Friends

Middle-earth Enterprises and Friends will retain the core AAA studios and is intended to remain a “creative powerhouse” in game development. It intends to become more transparent with a structure better suited to maximize the potential of its most valuable IPs.

This AAA-focused company will include Crystal Dynamics, Eidos-Montreal, Vertigo Games, and Warhorse Studios. IPs include Dead Island, Killing Floor, Metro, Tomb Raider, The Lord of the Rings, and many more. This group will also include PLAION, Freemode, Dark Horse, and several other businesses.

What does this mean?

In the press release issued by Embracer, it is stated that shares of Asmodee Group and Coffee Stain & Friends will be distributed as a dividend to Embracer’s shareholders and listed on the NASDAQ stock exchange, but Middle-earth Enterprises & Friends will remain with Embracer, which will be renamed.

Part of this separation process includes a new financing arrangement through Asmodee Group, amounting to EUR 900 million. This will be used to repay existing debt.

Share distribution for Asmodee is expected to occur within 12 months, and for Coffee Stain & Friends during 2025.

At this point, it is unclear what effects this will truly have on the constituent parts of Embracer which are being spun off. In the best-case scenario, the increased operational independence will benefit the three organizations. However, with Asmodee Group taking on 900 million Euros of debt to stabilize Embracer before the separation, there are some valid concerns about the scope for their independent success. In March, Embracer had to sell Saber – the company behind Warhammer 40,000: Space Marine 2 and Jurassic Park: Survival – as part of a cost-cutting exercise.

Additionally, Embracer CEO Lars Wingefors, through his private investment company Lars Wingefors AB, will retain a large interest in all three groups. With the intent to form a “long-term ownership structure”, Lars Wingefors AB will retail its current holdings, approximately 20% of capital and 40% of votes. Whether bold new strategies can take hold under the same banner of leadership remains to be seen, and we will be watching the

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