The gaming industry is no stranger to upheaval and uncertainty, and the next studio to face potential turmoil is Gearbox Entertainment, the creators of the popular Borderlands franchise. Following the recent closure of Volition, another veteran studio owned by Embraver Group, Gearbox is reportedly at risk of being put up for sale. While the fate of the studio is still under consideration, the potential sale raises questions about the stability of Embracer’s vast portfolio of studios.
Rumors of a Sale
According to Reuters, three sources have revealed that Embracer Group, the mega-conglomerate that acquired Gearbox in 2021, is deliberating whether to sell the studio. Embracer’s recent rapid expansion, which included multiple studio acquisitions and the purchase of Middle-earth, has necessitated significant restructuring within the company. The failed $2 billion deal with the Saudi Arabian-backed Savvy Games Group further exacerbated the need for change, resulting in studio closures, game cancellations, and staff layoffs.
Embracer Group boasts an impressive lineup of studios and franchises. Crystal Dynamics/Tomb Raider, Dambuster/Dead Island, Eidos Montreal/Deus Ex, Coffee Stain/Goat Simulator, Tuxedo Labs/Teardown, 4A Games/Metro, Ghost Ship Games/Deep Rock Galactics, Alone in the Dark, and TimeSplitters are just a few of the many studios and series under Embracer’s umbrella. In addition to gaming, Embracer owns non-gaming entities such as board games giant Asmodee and comic publishing house Dark Horse. With over 130 studios, nearly 17,000 employees, and countless familiar franchises, Embracer’s influence in the industry is substantial.
News of a potential Gearbox sale has had a direct impact on Embracer’s stock prices, which have seen an uptick. However, it is important to note that discussions surrounding the sale are still in progress and nothing is set in stone. Nevertheless, the ongoing restructuring efforts within Embracer suggest that other studios within the conglomerate may face uncertain futures in the coming years. As we move into 2024, it is likely we will witness more of Embracer’s studios and their employees grappling with an uncertain path forward.
A Lesson in Consolidation
The troubles faced by Embracer Group serve as a reminder of the risks associated with consolidation in the gaming industry. The sheer size of Embracer’s empire raises concerns about the sustainability and stability of its various studios. While consolidation can offer advantages such as shared resources and expertise, it also poses challenges when these conglomerates experience financial setbacks or fail to meet expectations. The impending $69 billion Microsoft-Activision Blizzard merger further exemplifies the trend of consolidation within the industry, despite the potential risks involved.
The uncertain future of Gearbox Entertainment highlights the ongoing challenges faced by gaming studios in an ever-evolving industry. Embracer’s potential sale of the studio and its broader restructuring efforts have raised questions about the stability of its extensive portfolio of studios. As the gaming landscape continues to transform, it remains to be seen how industry giants like Embracer Group will navigate these uncertain waters and ensure the longevity of their studios and franchises. Only time will tell if the gaming industry can learn valuable lessons from its experiences with consolidation and chart a more sustainable course forward.
Leave a Reply