Replaced Embracer CEO wins understatement of the year, says "the road has not always been straight" after billions burned, thousands of layoffs, dozens of games canceled, and multiple studios closed

Embracer Group, which you may know from the barrage of reports chronicling the company's internal blood bath over the past year and change, has appointed a new CEO.

Co-founder and longtime CEO Lars Wingefors is now "proposed to be appointed as Executive Chair of the Board of Embracer at the Annual General Meeting," and the company's board of directors has passed the baton to Phil Rogers, who's currently deputy CEO of Embracer and CEO of the company's Crystal Dynamics - Eidos group, formed from Square's big sale to Embracer back in 2022.

Wingefors issued a statement alongside the news of his change in position. "With the start of this new phase, I am thankful for the years and lessons learned as CEO of Embracer," he begins. "While the road has not always been straight, I am incredibly proud of the achievements made possible by our talented teams, which have created some incredible experiences for gamers."

The road has not always been straight. Let's pause for a minute to evaluate the straightness of Embracer's road, and the years of lessons that have purportedly been learned.

To sum up Embracer's modern games operations, it spent a whole load of money buying studios and IP, but when a $2 billion deal fell through, it found itself $1.5 billion in debt. So, it started closing and pawning studios to dig its way out, and this had catastrophic consequences for nearly its entire stable of game developers, most of whom were doing just fine before Embracer snapped them up.

Embracer's implosion led to several thousand layoffs. A May 2024 report from Embracer notes that the company had shed over 4,500 employees, and about 3,700 of them were "game developers." Additionally, 80 "game development projects" also vanished during this time.

Here are just some of the known studios that paid the price for Embracer's actions.

• Red Faction and Saints Row developer Volition was closed down.
• After buying Tomb Raider and declaring the team unaffected by layoffs, the Tomb Raider team was affected by layoffs.
• An unannounced Deus Ex game was reportedly canceled after 2 years of development.
• A Tiny Tina's Wonderlands and Diablo 4 support studio lost the majority of its workforce.

Even among the widespread and ongoing contraction in the games industry post-COVID boom, it's no exaggeration to say Embracer has been a standout singularity of drastic and brutal cost-cutting measures that uprooted the lives of thousands of people. A nucleus of publicly traded companies taking a hacksaw to studios in order to make a line go up and to the right.

Alx Preston of Hyper Light Breaker developer Heart Machine, whose latest game is published by Gearbox Publishing, now rebranded to Arc Games, which Embracer still owns despite selling off Gearbox development to Take-Two, was understandably not keen on this corporate future despite surviving the fallout.

"I don't want to depend on megacorporations doing X, Y, and Z to dictate our future in some way or another, but sometimes you get caught in that crossfire," he said last year.

Preston also highlighted the human impact of these layoffs. "This cascading effect across the industry, where it isn't just the people who get laid off but it's the teams," he said. "Maybe that project still exists but now you don't have the resources you once did, you have to reformat, restructure that project in some way or another, or cancel it because you don't have the people any more."

Wingefors previously admitted "I deserve a lot of criticism" for Embracer's track record. He is now stepping down as CEO, but will seemingly remain a top-ranking, well-paid executive at the company. That's in no small part because Lars Wingefors AB, an investment firm that's handily Embracer's largest shareholder, proposed Wingefors' appointment as executive chair of the board.

Today, Wingefors said "this new phase allows me to focus on strategic initiatives, M&A, and capital allocation, ensuring Embracer's continued growth and success. I am more convinced than ever that the best is still ahead of us."

It's hard to be optimistic about Embracer's mergers and acquisitions, but I sure hope the best is still ahead of Embracer, because if this was its best, I'd hate to see its worst.

Just last month: Embracer spins off Coffee Stain and 250 game studios under it, including devs of Satisfactory and Deep Rock Galactic, while rebranding The Lord of the Rings group.