Embracer Group is splitting up its messy gaming empire into three different companies

Embracer Group has been on a losing streak of late, having recently missed out on a $2 billion investment, laid off thousands of employees and sold one of its key properties, Gearbox, at fire-sale prices. Now, the company has announced plans to split into three separate, publicly listed entities, Bloomberg reported.

The first is Middle-earth Enterprises & Friends, specializing in AAA games and and overseeing the Dead Island, Killing Floor, Kingdom Come Deliverance, Tomb Raider and The Lord of the Rings franchises. Studios under its purview include Crystal Dynamics, Dambuster Studios, Eidos-Montréal, Flying Wild Hog Studios, Tripwire, Vertigo Games, Warhorse Studios and 4A Games. This company will remain within the current listing as Embracer Group for now.

The second is Asmodee, will handle the tabletop gaming segment of Embracer Group. Those titles include Ticket to Ride, 7 Wonders, Azul, CATAN, Dobble and Exploding Kittens. Finally, Coffee Stain & Friends is the company’s indie-centric group, with properties including Deep Rock Galactic, Goat Simulator, Satisfactory, Wreckfest, Teardown and Valheim.

“This move has been made with the intention to unleash the full potential of each team and provide them with their own leadership and strategic direction,” said Embracer Group CEO Lars Wingefors. “This is the start of a new chapter, a chapter that I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon.”

Embracer Group went on an epic buying streak between 2019-2022 when borrowing was cheap, acquiring studios and entertainment groups including Crystal Dynamics, Gearbox Entertainment, Dark Horse Media, Middle-earth Enterprises and many, many others. Those came with gaming franchises including Tomb Raider, Deus Ex, Borderlands and Saints Row.

It was forced to restructure, though, when it lost out on a $2 billion partnership deal (reportedly with Savvy Games, funded by the Saudi government). It subsequently laid off 8 percent of its staff (as of February 2024), or nearly 1,400 employees. The company also sold off Borderlands developer Gearbox for $460 million, a fraction of the $1.3 billion it was valued at three years prior.