The Rise and Fall of Embracer (aka THQ Nordic)

[LESS T_T]

THQ Nordic completed the PB Collection by receiving Risen from its sister company Deep Silver, and gave Painkiller and Red Faction.




So they are... trading companies.

 

[sullynathan]

but why? Those franchises have little market value

 

[thesecret1]

You guys don't get it, THQ is pioneering a super new game targeted at company CEOs called "IPs, the Gathering". You may laugh now, but have you thought about how valuable a Singles: Flirt Up Your Life IP in mint condition will be in a couple decades, hmm? Don't be surprised when Blizzard trades both Warcraft and Diablo for getting Battle for Bikini Bottom after THQ is done pumping its stats with new releases.

 

[PulsatingBrain]

but why? Those franchises have little market value

I'd say there's life yet in Red Faction, especially for something similar to Guerilla. But yea some of the others are a little confusing

 

[deuxhero]

Surprised they'd give up Red Faction since they both did a good update to it they'll no longer profit from and it's had major crossover content with Saints Row. Maybe whatever they're doing with Timesplitters will have a Second Sight cameo.

 

[Infinitron]

They're not giving it up, it's an internal trade between two publishers owned by the same parent company.

Seems like the Deep Silver brand is for the more mainstream AAA-oriented games (Saints Row, various first person shooters) while THQ Nordic gets the RPGs, strategy & tactics games and other random stuff.

 

[Latelistener]

It's mostly because Nordic works with Piranha Bytes now and Deep Silver owns Volition.

Switching franchises is easier than studios in case of Volition, and PB will probably never work with DS again. I remember Bjorn was pretty unhappy about their DLC policy (they had to cut some content from Risen 2 in order to make day 1 dlcs).

 

[Markman]

New report is out.

Spoiler

EMBRACER GROUP AB
Embracer Group publishes Full Year Report and Q4, January-March 2020: OPERATIONAL EBIT INCREASED 35% TO SEK 1,033 M FOR THE FINANCIAL YEAR (Cision)
2020-05-20 06:00
FOURTH QUARTER, JANUARY–MARCH 2020 (COMPARED TO JANUARY–MARCH 2019) · Net sales were SEK 1,339.1 million (1,630.5). Net sales of the Games business area decreased to SEK 903.5 million (1,034.9). Net sales of Partner Publishing/Film business area decreased to SEK 435.6 million (595.6), mainly due to the covid-19 pandemic closing of retail outlets towards the end of the quarter. · EBITDA amounted to SEK 495.2 million (618.6), corresponding to an EBITDA margin of 37%. · Operational EBIT amounted to SEK 286.0 million (395.9) corresponding to an Operational EBIT margin of 21%. · Cash flow from operating activities before changes in working capital amounted to SEK 384.6 million (527.1). · Cash flow from operating activities amounted to SEK 765.7 million (777.2). · Earnings per share was SEK 0.42 (0.37). · Adjusted earnings per share was SEK 0.97 (1.00). FULL YEAR, APRIL 2019–MARCH 2020 (COMPARED TO APRIL 2018–MARCH 2019) · Net sales increased 3% to SEK 5,249.4 million (5,121.2). Net sales of the Games business area grew 31% to SEK 3,196.5 million (2,447.1), whereas the Partner Publishing/Film business area decreased to SEK 2,052.9 million (2,674,1). · EBITDA increased 33% to SEK 1,821.3 million (1,366.7), corresponding to an EBITDA margin of 35%. · Operational EBIT rose 35% to SEK 1,033.0 million (765.8), corresponding to an Operational EBIT margin of 20%. · Cash flow from operating activities before changes in working capital amounted to SEK 1,604.2 million (1,248.2). · Cash flow from operating activities amounted to SEK 1,728.3 million (656.6). · Earnings per share was SEK 0.91 (1.19). · Adjusted earnings per share was SEK 2.81 (2.12).
Key performance indicators, Group Jan–Mar 2020 Jan–Mar 2019 Apr 2019–Mar 2020 Apr 2018– Mar 2019
Net sales, SEK m 1,339.1 1,630.5 5,249.4 5,121.2
EBITDA, SEK m 495.2 618.6 1,821.3 1,366.7
Operational EBIT, SEK m 286.0 395.9 1,033.0 765.8
EBIT, SEK m 96.7 172.0 345.4 467.3
Profit after tax, SEK m 132.3 103.0 283.3 315.7
Cash flow from operating activitiesbefore changes in working capital, SEK m 384.6 527.1 1,604.2 1,248.2
Cash flow from operating activities, SEK m 765.7 777.2 1,728.3 656.6
Sales growth, % –18 158 3 484
EBITDA margin, % 37 38 35 27
Operational EBIT margin, % 21 24 20 15

CEO COMMENTS

OPERATIONAL EBIT EXCEEDS SEK 1 BILLION FOR THE FINANCIAL YEAR – 118 GAMES UNDER DEVELOPMENT

The Group had another stable quarter with profitability in line with management expectations. Consolidated net sales decreased to SEK 1,339 million (1,631). The decrease is due to the fact that the comparable period last year featured the AAA release of Metro Exodus.Despite the absence of large releases, our Games business area had its second-best quarter ever generating SEK 904 (1,035) million in net sales. Notable releases during the quarter wereDarksiders Genesis, Metro Exodus DLC Sam’s storyand Monster Energy Supercross 3. The Games business area had a record high proportion of digital sales of 78% partly driven by the situation caused in many of our key markets by the covid-19 pandemic, which has resulted in an overall increased consumption of games. Worth noting is that the Group did not have any major or notable releases during March that most likely would have driven further sales increases. After the end of the quarter, we have seen this boost in consumer activity more clearly, driven by notable releases in the April and May period. Sales in the Partner Publishing/Film business area decreased to SEK 436 million (596), affected by the covid-19 pandemic related closing of retail outlets towards the end of the quarter.

EBITDA was down to SEK 495 million (619), corresponding to an EBITDA margin of 37% (38). Operational EBIT was SEK 286 million with an Operational EBIT margin of 21% (24). The Group had strong cashflow from operating activities of SEK 766 million (777), mainly driven by operating profit and decreased working capital. All reported business segments contributed to the Group’s Operational EBIT in the quarter.

118 GAMES UNDER DEVELOPMENT

I genuinely believe that we have one of the industry’s most exciting pipelines of upcoming games, engaging over 3,000 game developers across the world. We believe this will drive significant organic growth in revenue, operational EBIT and cash flow in the Games business area in the coming years.

With the acquisition of Saber Interactive, the Group currently has over 118 games under development including 69 still yet to be announced titles.

We expect substantial growth in the current financial year driven by a large number of high quality releases, for which we are excited to the reception among gamers. We expect the value of completed games will more than doubles from SEK 589 million to SEK 1,200-1,400 in the current financial year ending March 31, 2021. This growth will be underpinned by recent and upcoming new game releases such as Biomutant, Chorus, Deep Rock Galactic, Destroy all Humans!, Iron Harvest, MotoGP 20, Ride 4, Snowrunner, Wasteland 3, WWE2K Battlegrounds (in collaboration with 2K) and a host of other titles that have not yet started their marketing campaigns. On top of this, we expected a solid performance from our back catalog supported by strong demand for many of our beloved franchises, including Darksiders, Dead Island, ELEX, Goat Simulator, Kingdom Come Deliverance, Metro, Monster Energy Supercross, MX vs ATV, Remnant: From the Ashes, Satisfactory, Saints Row, Wreckfest and World War Z, among others.

Looking into the next financial year ending March 31 2022, we expect continued organic growth driven by further increase in the value of completed games including the first AAA games releases since Metro Exodus. From this year on we expect to have AAA releases every year.

To drive further organic growth in the years ahead, many talented people across all our operating units are continuously scouting for new attractive game development projects.

IMPRESSIVE COLLABORATION EFFORTS TO MEET COVID-19

The covid-19 pandemic is a challenge to all of us and Embracer is no exception. The Group is committed firmly to the safety and well-being of all employees and co-workers. Our decentralized model, where decision-making is local, has proven to work well in this challenging and difficult situation. Rapid transformations to online and social distancing workflows has in general gone smoothly and have mostly only caused minor operational interruptions. I really want to express my gratitude to all our employees who so quickly adapted to a new situation and committed to keeping our business going despite the difficult circumstances.

ACQUISITIONS AND NEW STUDIOS

During the quarter we were happy to announce the acquisition of Saber Interactive, completed on April 1. Saber Interactive is a leading game developer and publisher with more than 600 employees across six countries. Saber has been on our radar for a long time because of their deep history of consistently high-quality work. Their ambitious moves towards self-funded projects in recent years have been particularly impressive, especially World War Z that sold more than three million units. Saber is now also announced as our fifth operative group and will remain a standalone company within Embracer Group. In April, Saber Interactive released Snowrunner that has performed above management expectations. The integration process of Saber Interactive has so far run smoothly, despite the difficult circumstances due to covid-19.

WE RAISED SEK 1.6 BILLION FOR FURTHER ACQUISITIONS

After the close of the quarter, we improved our financial position further and strengthened our M&A capacity by a new share issue, raising SEK 1,646.5 million. I was pleased to see strong demand from both new and existing long-term shareholders. This enables us to continue our long track-record of acquisitions of new game publishers, development studios or new exciting franchises.

Our M&A strategy retains a strong pipeline of possibilities. The appetite among gaming entrepreneurs for joining forces is solid and growing. Currently we are involved in several ongoing discussions which could lead to future acquisitions, including a handful groups of sizable companies that could form new operative groups.

I would like to take this opportunity to welcome both the industry veteran David Gardner, and Saber Interactive co-founder Matthew Karch, to the board of directors of the parent company.

To conclude, I would like to send my thanks to all of our shareholders, customers, colleagues and business partners for contributing to the prosperity and success of our growing family. Our most exciting years are still ahead of us.

Stay safe. I hope to see you soon. All the best from Värmland.

May 20, 2020, Karlstad, Sweden

Lars Wingefors,
Founder & CEO

For more information, please contact:
Lars Wingefors, Co-founder and Group CEO Embracer Group AB (publ)
Tel: +46 708 47 19 78
E-mail: lars.wingefors@embracer.com

This Full Year Report is information that is mandatory for Embracer Group AB to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 06:00 CET on May 20, 2020.

Seems Saber was a good bet.
World War Z sold 3 million. Snowrunner sold 1 million in just 3 weeks.

118 games in development, 69 not yet announced.
Dead Island 2 and Saints Row 5 delayed, stock dropped 10%.

 

[Markman]

Still wondering what will they swallow with those $160 million.
Who is left?
Deadelic, Focus, 505, Devolver are small enough so probably one or two gonna be lunch food soon.

 

[Belegarsson]

Devolver is like the A24 of game industry right now, I think they like and prefer operating independently.

My guess would be Daedalic, Deck 13 and Sumo Digital. But knowing how I'm awful at predicting stuffs, they probably gonna announce Techland acquisition next week.

 

[thesecret1]

Destroy All Humans came out and seems to be doing well

 

[orcinator]

Destroy All Humans came out and seems to be doing well

On one hand it means an actually good game might get the same treatment.
On the other hand it means they might just keep remaking pieces of shit like DAH (and I remember THQ published plenty of garbage during the ps2 era).
Because holy fuck, I gave it a try and I'm honestly surprised how bad it is; it's piss easy and the mechanics just aren't fun.
The jokes are good but I could have watched an LP for those.

 

[LESS T_T]

Embracer Group acquires 4A Games

Embracer Group AB ("Embracer"), through its wholly-owned subsidiary Saber Interactive[1], has today entered into an agreement to acquire 100 percent of Malta-based 4A Games Limited (“4A Games”). 4A Games is a top-tier independent AAA PC and Console developer behind the successful Metro franchise and a long-term development partner to the Embracer owned publisher Deep Silver. Through the acquisition, Saber Interactive onboards a reputable team of 150+ people across two studios in Malta and Ukraine as well as best-in-class internally developed and owned First-Person-Shooter (“FPS”) technology to the Group. The upfront purchase price amounts to approximately MUSD 36 on a cash and debt free basis and is paid in cash and in newly issued B shares, plus an earn-out consideration, subject to fulfilment of agreed milestones, of a maximum USD 35 million. 4A Games expects net sales of approximately MEUR 20 for the period Jan-Dec 2020, with an operational EBIT of approximately MEUR 12.

Embracer Group acquires New World Interactive

Embracer Group AB ("Embracer"), through its wholly-owned subsidiary Saber Interactive, has today entered into an agreement to acquire 100 percent of the shares in US/Canada based New World Interactive LLC (“NWI”). NWI is an award-winning indie-spirited creator and developer of First-Person-Shooter (“FPS”) IPs for PC founded in 2010 in North America. Through the acquisition, Embracer Group adds its first studio in Canada and establishes a strong foothold for further growth.

Insurgency dev.


Embracer Group acquires Deca Games

Embracer Group AB ("Embracer") has today entered into an agreement to acquire 100 percent of the share capital in Germany-based Deca Live Operations GmbH (“DECA”).

DECA Games, founded by Ken Go, who is also the seller, is a mobile asset care and live operations (“LiveOps”) expert within the Free-to-Play (“FTP”) games segment. Through the acquisition, Embracer Group adds a strong team forming a key pillar in building a growing and profitable mobile and FTP business within the group while DECA will benefit from Embracer’s IP catalog, access to capital and deal flow. The upfront purchase price amounts to approximately MEUR 25 and is paid in newly issued B shares, plus an earn-out consideration, subject to fulfilment of agreed earnings targets, of a maximum of approximately MEUR 60.

Embracer Group acquires Vermila Studios

Vermila Studios is currently working on their first production, Crisol: Theater of Idols. The game is a first-person horror adventure set in the town of Tormentosa, a Hispanian village with an ancient past, with captivating visuals based on warm Spanish red and gold colors.

The two founders of Vermila Studios, David Carrasco and David Tornero have worked together since 2017, and have created a diverse team of talented Spanish game developers. The Crisol IP is developed in the studio and the team is eager to expand the concept further in the future, opening the possibilities for strong sequels in the Crisol universe.

Embracer Group acquires Rare Earth Games

The Rare Earth leadership team, Michael Borras, Helmut Hutterer and Peter Ehardt, has experience as founders of Iron Mountain Interactive and Socialspiel Entertainment, with backgrounds at Deep Silver and Rockstar Games. Together with a strong technical and creative team, they will spearhead the work on Rare Earth’s first game, a fresh take on online co-op survival action.

Embracer Group acquires Palindrome Interactive

Palindrome Interactive has been partially owned by Amplifier Game Invest since 2017 and is currently in the process of releasing their first game, Immortal Realms: Vampire Wars, on 28 August, on PC, PlayStation, Xbox, and Nintendo Switch.

The creative team at Palindrome is currently working on the studio’s next title, and as of yet unannounced strategy game, which has been signed to be published by Coffee Stain Publishing.

Embracer Group acquires Pow Wow Entertainment

Currently, the team is working on two unannounced games of which one on an existing THQ Nordic-owned IP and the other will be a roguelike multiplayer platformer set on a constantly changing world.

And some media company.

Embracer Group acquires Sola Media

 

[Dodo1610]

At this point, it's easier to make a list of mid-sized dev studios that haven't been bought by them.

At least buying 4A made sense since they own the Metro IP but are they buying studios no one has ever heard of?

 

[LESS T_T]

are they buying studios no one has ever heard of?

Not as much as 4A but New World has a bit of renown and history too.

Rest of them are literally new (or new-ish, in the case of Palindrome) studios so it's more of investments I guess. (Three of them are acquired under Amplifier Game Invest, a division specialized in investment in startups.)

 

[Wirdschowerdn]

The Covid-19 Insurance Takeover.

 

[DalekFlay]

The Covid-19 Insurance Takeover.

Put Covid into the AC system, shut the developer down, then buy them up cheap. Those bastards!

 

[Ismaul]

The Covid-19 Insurance Takeover.

The last Embrace.

 

[Markman]

Man, CEO had a wonderful day day yesterday.
The stock blew up and he got 1.6 billion SEK richer.

In swedish
https://www.breakit.se/artikel/2588...igar-blev-lars-wingefors-1-6-miljarder-rikare

 

[flyingjohn]

So both spongebob and destroy all humans are a big success financially.
Their modus operandi is paying off big time.

 

[LESS T_T]

Embracer acquires Vertigo Games, the company behind one of the VR hits Arizona Sunshine: https://embracer.com/release/embracer-group-acquires-vertigo-games/

Embracer Group AB ("Embracer"), through its wholly-owned subsidiary Koch Media GmbH, has today entered into an agreement to acquire 100 percent of the share capital in Dutch-based Vertigo Games Holding B.V. (“Vertigo Games”). Vertigo Games is a company that develops, publishes and distributes games exclusively for VR. It is behind the million-selling and award-winning global hit Arizona Sunshine, and has highly anticipated After the Fall in its pipeline.

The upfront equity purchase price amounts to EUR 50 million in total, where EUR 40 million is paid in cash and EUR 10 million is paid in newly issued B shares. This equals an upfront enterprise value of approximately EUR 45 million, adjusted for EUR 5 million in acquired net cash. Subject to fulfilment of agreed earnings targets and release of certain titles during a up to 10 years period an earn-out consideration of a maximum of EUR 65 million may be paid, where a maximum of EUR 25 million will be paid in cash and a maximum of EUR 40 million will be paid in newly issued B shares.

A company presentation of Vertigo Games will take place in connection with today's Annual General Meeting on September 16, 2020.

“Since we decided to focus exclusively on VR gaming in 2013, we have experienced rapid growth with the release of global hit Arizona Sunshine, and we have our most ambitious project to date, After the Fall. The VR gaming market seems to be on the edge of really taking off with the coming together of better, more accessible hardware and more and more high-quality content being released and announced. We believe that now is the time to accelerate and in Koch Media and Embracer we have found the perfect partner to do so together with”, said Richard Stitselaar, CEO of Vertigo Games.

Dr. Klemens Kundratitz, CEO at Koch Media adds: “We have been monitoring the VR market over the past years very closely. We feel that now is the right time to extend our groups activities into this fast-growing market. I am sure that we are only at the beginning of the technological development of VR and what it offers players around the globe. We are delighted that with the acquisition of Vertigo Games, leading VR experts are joining our group. Together, we will push the boundaries of VR gaming even further, combining our strong global development and publishing network with their specialized VR games expertise.”

 

[rusty_shackleford]

So both spongebob and destroy all humans are a big success financially.
Their modus operandi is paying off big time.

Reminder that ""professional"" reviewers shat all over these titles.
https://store.steampowered.com/app/...rePants_Battle_for_Bikini_Bottom__Rehydrated/
Overwhelmingly Positive(96%), making it one of the highest rated games with >1,000 reviews released this year.
https://store.steampowered.com/app/803330/Destroy_All_Humans/
Overwhelmingly Positive(95%), same as above.

Spongebob has a 69% critic score on metacritic, Destroy All Humans! has a 72%.

 

[flyingjohn]

So both spongebob and destroy all humans are a big success financially.
Their modus operandi is paying off big time.

Reminder that ""professional"" reviewers shat all over these titles.
https://store.steampowered.com/app/...rePants_Battle_for_Bikini_Bottom__Rehydrated/
Overwhelmingly Positive(96%), making it one of the highest rated games with >1,000 reviews released this year.
https://store.steampowered.com/app/803330/Destroy_All_Humans/
Overwhelmingly Positive(95%), same as above.

Spongebob has a 69% critic score on metacritic, Destroy All Humans! has a 72%.

Well you have to have a high iq to understand spongebob puzzles:

 

[rusty_shackleford]

So both spongebob and destroy all humans are a big success financially.
Their modus operandi is paying off big time.

Reminder that ""professional"" reviewers shat all over these titles.
https://store.steampowered.com/app/...rePants_Battle_for_Bikini_Bottom__Rehydrated/
Overwhelmingly Positive(96%), making it one of the highest rated games with >1,000 reviews released this year.
https://store.steampowered.com/app/803330/Destroy_All_Humans/
Overwhelmingly Positive(95%), same as above.

Spongebob has a 69% critic score on metacritic, Destroy All Humans! has a 72%.

Well you have to have a high iq to understand spongebob puzzles:

how the fuck was I not aware of this masterpiece of gaming journalism

 

[NJClaw]

how the fuck was I not aware of this masterpiece of gaming journalism

Please, stop making fun of the Spongebob guy. Give him some slack, I mean, he is obviously retarded.

The two phrases preceding and following the "impossible bowling part" make everything even more surreal:

It’s a simple task in concept, but trying to execute it is some of the most unfun and Sisyphean gameplay in recent memory. [...] These kinds of gameplay barricades are common, and force you to restart and face your demons again, and again, and again.

"These kinds of gameplay barricades", "Sisyphean gameplay". He is playing a game for 8 year olds.