Embracer teases unannounced “remarkable” games as “innovative strategic partnership” comes to fruition
The Embracer Group announced today its financial results for the fourth quarter of the fiscal year, corresponding to the period between January and March 2023.
According to the advertisementnet sales increased 79% year-over-year to SEK 9,356 million.
Sales broken down by segment were as follows:
- PC/Console games: increased by 66% to SEK 3,478 million.
- Mobile gaming: Decreased -25% to SEK 1,317 million.
- Table games: increased by 438% to SEK 3,074 million
- Entertainment and services: increased by 83% to SEK 1,487 million.
Earnings before interest and tax was a loss of SEK 95 million.
For the full year, net sales increased 121% year-on-year to SEK 37,665 million. The breakdown is as follows.
- PC/Console Games: Increased by 58% to SEK 13.444 million.
- Mobile gaming: increased by 19% to SEK 5,819 million.
- Table games: increased by 2,199% to SEK 13,132 million.
- Entertainment and services: increased by 70% to SEK 5.27 billion.
Earnings before interest and taxes were SEK 194 million.
We also heard that a “groundbreaking strategic partnership deal that would have set a new benchmark for the gaming industry” valued at $2 billion in contracted development revenue over a six-year period fell through “last night.”
“Negotiations have been taking much longer than originally anticipated considering we already had a verbal commitment in October 2022. The specific deal included over $2 billion in contracted development revenue over a six-year period. The deal would have allowed pay-as-you-go to catch up on already capitalized costs for a range of big-budget games, but also markedly improved the predictability of cash flow and earnings over the medium to long-term over the life of game development projects .
The transaction had many of the top rated global advertisers on board with several hundred people involved on both sides. All documentation was finalized and ready to go as of yesterday. We request execution of the agreement prior to our fourth quarter announcement. However, last night we received a negative result from the counterparty. This decision was unexpected by Embracer’s management and Board of Directors.”
Incidentally, we’ve also learned that several unannounced games have been delayed outside of the current fiscal year (which ends in March 2024) because they “will need more time to meet our high quality expectations and reach their full commercial potential.” They are now scheduled for the following year.
That said, the group still has “several additional big-budget games” due for release in March 2024, including “several notable unannounced titles” and previously announced ones like Warhammer 40,000: Space Marine 2, Remnant 2 and payday 3.
Lastly, we learn that Dead Island 2 has sold “more than 2 million units.”