Finance
Embracer leans on back catalogue as game delays shake industry profits
Published by Global Banking & Finance Review®
Posted on May 22, 2025
3 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 22, 2025
3 min readLast updated: January 23, 2026
Embracer leans on its back catalogue as game delays impact industry profits. Studios face challenges with slower, riskier game development.
By Jesus Calero and vera dvorakova
(Reuters) - Tomb Raider owner Embracer is leaning on its back catalogue to maintain cash flow while fewer AAA games are being released, but this is not a long-term shift, CEO Lars Wingefors said on Thursday.
As game development becomes slower, riskier and more expensive, studios are facing growing pressure to justify their budgets for major releases in a market where consumer sentiment and profitability are wearing thin.
"I think it's more important than ever to make sure the game is polished because it's very hard to repair a buggy or unfinished product," Wingefors told Reuters.
French peer Ubisoft showed a similar approach with its newest Assassin's Creed game, which debuted with positive reviews on Steam after being delayed twice.
Gaming groups thrived during COVID lockdowns, but delays and weak demand have hit Embracer's new titles, pushing it to lean on older games seen as a safer bet amid faltering blockbusters.
It has sold studios to cut costs and manage debt in recent years, and is now splitting into three listed companies.
On Thursday, it forecast slight revenue growth and broadly unchanged earnings for its fiscal 2025/26, and said that realistically, at least one of its nine AAA game releases slated for the following two financial years would be pushed back, without specifying titles.
GAME DELAYS SHAKE INDUSTRY PROFITS
Studios are pouring time and money into increasingly complex games, but returns are hit-or-miss and long delays mean many will not see cash back until much later.
On top of it, fewer games break through and slower cash generation strains studios, which has made older titles a more attractive and dependable revenue stream for some.
Ubisoft recently delayed key titles and pushed profitability expectations to 2026, underscoring sector challenges in converting content into cash.
It told Reuters it planned to be more selective and turn blockbusters into "evergreen" franchises that generate steady revenue long after launch.
"We will still look to create some new IPs, but will be more discerning in favour of gameplay breakthroughs based on disruptive or emerging technologies," Ubisoft said.
Wingefors also said that tools like AI could boost efficiency over time in minor titles, with the industry rapidly adopting them to improve energy gains and technology sales.
($1 = 9.5615 Swedish crowns)
(Reporting by Jesus Calero and Vera Dvorakova in Gdansk, additional reporting by Greta Rosen Fondahn and Leo Marchandon, editing by Milla Nissi-Prussak)
Embracer is leaning on its back catalogue to maintain cash flow while fewer AAA games are being released, as CEO Lars Wingefors indicated that this is not a long-term shift.
Delays and weak demand have impacted new titles, forcing studios to rely more on older games, which are seen as a safer revenue stream amid faltering blockbusters.
Ubisoft plans to be more selective with its titles and aims to turn blockbusters into 'evergreen' franchises that generate steady revenue long after launch.
Studios are dealing with increasing complexity in game development, leading to longer delays and financial strains, as many new titles do not generate expected returns.
AI tools are expected to boost efficiency over time, particularly in minor titles, as the industry rapidly adopts these technologies to improve productivity.
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