Ah yes, game industry consolidation is great isn't it. What could possibly go wrong when one company acquires a ton of others and then screws up?
Embracer Group are known for going on acquiring sprees and currently own the likes of THQ Nordic, Coffee Stain, Gearbox, Plaion (formerly Koch Media), Saber Group and all the studios they control like Flying Wild Hog, Warhorse Studios, 3D Realms, New World Interactive, Tripwire Interactive, Aspyr Media, Beamdog and the list just goes on and on and on. Their own website lists 850 IPs either owned or controlled.
Well, they're having a few problems. They announced in a previous revenue report that a "major strategic partnership that has been negotiated for seven months will not materialize", this deal included "USD 2 billion in contracted development revenue over a period of six years" - so it was a pretty huge hit to their plans.
Now less than a month later they're announcing a "comprehensive restructuring program", that will see amongst other things the closing of various currently undisclosed studios and terminating various projects. In an open letter the CEO Lars Wingefors mentioned their plan will "transform us from our current heavy-investment-mode to a highly cash-flow generative business this year".
Article taken from GamingOnLinux.com.
This destroys competition very effectively. I'm smelling something bad here. Who'll get benefit here? Other bigger games studios. I wouldn't be surprised that this was meant to be from the beginning....Doubt it. I mean, which is worse for competition, Embracer Group having to stop its takeovers and axe some studios now, or Embracer Group keeping on for a few more years of grabbing every indie in sight? And it may be good for some other big studios if Embracer Group falters (maybe--or maybe they're fine with fewer indies), but how do the top Embracer Group people make any money from that? Maybe someone like MS persuaded Embracer's backer to back out, but that's not a "planned from the beginning" thing.
You've got a point there. I suppose too much here. Maybe it's my imagination that fails me. We only see the stage(newspapers, internet, tv) where so called actors(embracer group members) are performing. It's hard to see what happens behind the scenes. One can suspect only. But in the Business world there's some kind of croocks who gladly take Strawberries out of cake and leave the employers the rest of the trash. This case could be that. But without any proofs it's only a doubt.
But speaking of Strawberries we just ordered a couple cardboard boxes full of strawberries from nearby farm. We get em' soon and they will be delicious.
The gaming studios that let themselves be purchased were either too greedy for the short-term benefits or did not have a hopeful future. Also, entertainment is quite a saturated market to compete in. Those two points make me realize studios shutting down is inevitable. When a parent company makes the unpopular decision to close a studio, they take all blame. If an independent studio closed doors due to lack of success, nobody would be mad at the decision (maybe sad though). But when it's a parent company responsible for financial sustainability, they're evil now, and it's their fault, even if they allowed a failing (or greedy) studio another chance.
When a studio is "gobbled up," it is their own choice to live and die by. The trend today is that it's cool to hate "capitalism," financial success, and large companies. Nobody puts responsibility on the small guys who exercised the decision making power they had.
Last edited by 14 on 18 June 2023 at 4:32 pm UTC
People being irresponsible with finances (and, yes, taking out huge loans that you can't easily repay is irresponsible) is not a feature of capitalism.
I would say the vehicle repossession is a prime example of both capitalism and taking out unpayable loans. Wouldn't Solar City be another? What about the Texas two-setp bankruptcy, wouldn't that be what you also described? What about the 2007-2008 financial crisis / mortgage-backed housing crisis?
Taking on massive credit card dept with marketing by those industries to spend is a hallmark of capitalism.
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