Published by Global Banking & Finance Review®
Posted on February 13, 2025
2 min readLast updated: January 26, 2026
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Embracer's quarterly profit missed forecasts due to higher costs and weak box office performance, prompting restructuring efforts.
By Jesus Calero
(Reuters) - Swedish games developer Embracer's third-quarter operating profit came below market expectations on Thursday, as higher user acquisition costs in mobile games and weaker-than-expected box office performance weighed on results.
WHY IT'S IMPORTANT
Embracer, like other gaming groups, benefited from growing demand for video games during COVID-19 lockdowns, but has since been hit by development delays, falling demand and poor reception for some of its new titles.
In recent years, Embracer has begun to divest some of its studios as part of restructuring efforts aimed at reducing costs and managing debt, and is charting a new course by splitting into three publicly traded entities.
The Swedish group owns more than a hundred studios worldwide and is known for popular game franchises, such as Tomb Raider, The Lord of the Rings and Kingdom Come: Deliverance.
KEY QUOTES
"The industry is still in a consolidation phase where there are layoffs driven by lack of capital and new technology tools in efficiency progress... We will make sure we are adapting to the changes in the industry and consumer demands," CEO Lars Wingefors told Reuters.
"Delays are always part of the industry, and we will give (games) more time if needed. For 'Kingdom Come: Deliverance II', for example, we delayed from releasing in November to now in February, and I think that three months gave a much more polished, bug-free experience for players", Wingefors added.
BY THE NUMBERS
The owner of the Tomb Raider franchise said its adjusted operating profit fell 11% to 1.18 billion Swedish crowns ($109.05 million) in the quarter through December, lagging analysts' forecast of 1.73 billion crowns seen in a company-provided consensus.
Embracer's PC/Console games segment fell 23% to 2.6 billion crowns from 3.38 billion a year ago.
Looking into the upcoming three financial years, Embracer said it has 10 AAA games under development, of which eight are from internal studios and two from external studios.
($1 = 10.8210 Swedish crowns)
(Reporting by Jesus Calero; Editing by Tomasz Janowski)
The article discusses Embracer's missed profit forecast due to higher costs and weak box office performance.
Embracer is divesting some studios and splitting into three publicly traded entities to manage costs and debt.
Embracer's PC/Console games segment fell 23% compared to the previous year.
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