After taking on $1.5 billion in debt over a $2 billion gamble, embattled Embracer CEO responsible for over 1,400 layoffs breaks out classic scapegoats: Russia and Covid

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The embattled CEO behind more than 1,400 industry layoffs, seven total studio closures, and nearly 30 canceled games has blamed his calamitous premiership of the Embracer Group on two classic scapegoats: Russia's invasion of Ukraine and the Covid-19 pandemic.

In an interview with, Lars Wingefors - who acknowledged that he "deserved a lot of criticism for his disastrous impact on the industry" - explained that as a public company, Embracer Group needed to have the "optimal structure" in order for the many, many studios it spent the last few years acquiring to succeed. Sadly, the company had failed to ensure that optimal structure.

According to Wingefors, that's because "to create successful games, and to retain and hire people, the company needs to have that [optimal] environment, and the environment for Embracer - and similar companies for that matter - has changed a lot." Through 2019 and 2020, Wingefors points out, "the cost of capital was really cheap and the willingness from investors to invest into growth organically and inorganically via M&A was endless."

"We also had a gaming market booming, especially during Covid, and we had a much more solid geopolitical situation, for example, in Russia. All those factors have changed a lot." 

There's no denying that the conflict in Ukraine and the ongoing impact of the pandemic have left their mark, but Wingefors appears to be singing from the same hymnbook as the UK's Conservative Party here, not least because, like his political peers, he appears to be glossing over the self-inflicted elephant in the room. While it's a fair assessment that investment in the games industry has dried up significantly in recent years, it's also worth pointing out that, at around the same time, "we also decided to take on debt for the first time in our history."

That debt amounted to $1.5 billion by the end of 2023, an amount that the sales of Star Wars: KOTOR remake developer Saber and Borderlands owner Gearbox will have reduced. It would also, however, have been covered by the $2 billion investment opportunity that Embracer Group was seeking, but fell through. Since the collapse of that deal, the company has been cutting staff, projects, and even shuttering long-established studios amid a catastrophic number of layoffs across the industry as a whole. 

To try and fix his mess, Wingefors has announced that Embracer Group will be split into three different companies - including one dedicated to Lord of the Rings - changing the parent company's name, and parceling roughly $960 million in remaining debt out to one of those child companies. That company, which will be known as Asmodee Group - is reportedly responsible for much of the remaining debt, and is also thought to be best-positioned to earn that money back.

Embracer Group quietly cancelled 29 unannounced games and shut 7 studios within six months last year.

Ali Jones
News Editor

I'm GamesRadar's news editor, working with the team to deliver breaking news from across the industry. I started my journalistic career while getting my degree in English Literature at the University of Warwick, where I also worked as Games Editor on the student newspaper, The Boar. Since then, I've run the news sections at PCGamesN and Kotaku UK, and also regularly contributed to PC Gamer. As you might be able to tell, PC is my platform of choice, so you can regularly find me playing League of Legends or Steam's latest indie hit.