Embracer loses $2 billion deal, shares plummet

What you need to know

  • This week Embracer Group presented its quarterly earnings report for Q4, which includes January-March 2023.
  • A critical partnership valued at $2 billion fell through late Tuesday night.
  • Due to the fallout from the forfeited deal, Embracer Group has significantly cut its earnings forecast.

In recent years, Swedish company Embracer Group aggressively acquired an impressive arsenal of valuable IPs, including Lord of the Rings and Tomb Raider. While these investments previously demonstrated the company’s trust in the trajectory of the video games industry, their latest quarterly earnings report has shaken investors’ confidence. ¬†

Embracer Group revealed it participated in negotiations for seven months with a noteworthy partner who was initially willing to invest $2 billion over the course of six years. According to the company, a verbal commitment was even established in October 2022. However, the evening before the earnings report, Embracer Group was informed that this strategic partnership “will not materialize.”¬†

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