The Embracer Group, which owns Lord of the Rings and Tomb Raider, reported mixed results in its fourth-quarter earnings for 2024. The company announced a 56% increase in its adjusted operating profit, reaching 1.4 billion Swedish krona ($132 million). However, its entertainment and services division, which includes Tolkien and Tomb Raider properties, saw a 15% drop in sales.
Based in Sweden, this gaming giant also shared the news that CFO and deputy CEO Johan Ekström is resigning due to personal reasons after five years of service. He will continue to work with the company until next March, focusing on splitting Embracer into three separate entities starting September 1.
Müge Bouillon, currently the deputy CFO, will step into Ekström’s role, while Phil Rogers will become the deputy CEO of Embracer. Rogers is also the CEO of Crystal Dynamics-Eidos and will lead one of the three new companies formed from Embracer, Middle-earth Enterprises & Friends.
From January to March 2024, Embracer’s overall profit boost was mainly due to its tabletop games division, which brought in over $290 million thanks to a better mix of products. Although PC and console games saw a 10% decrease in sales, they still earned the most revenue at $291 million. Mobile games, on the other hand, saw a 4% increase with $127 million in sales.
The entertainment and games division, however, suffered the most, with sales falling from $139 million to $118 million—a 15% decrease. CEO Lars Wingefors attributed this drop to fewer new releases and products compared to past quarters.
Recent developments include plans for two new Lord of the Rings films by Warner Bros Discovery and a new Tomb Raider film and series deal with Amazon by Embracer’s Crystal Dynamics. During a Q&A, Wingefors expressed optimism about future royalties from these projects, although no financial benefits from these deals will impact this fiscal year.
Embracer CFO Set to Exit as 'Lord of the Rings' Owner Reports Rise in Operating Profit, Drop in Entertainment Division Sales https://t.co/twRKmZNgOC
— Variety (@Variety) May 23, 2024
Wingefors is enthusiastic about the potential of the Lord of the Rings universe to drive future growth and plans to expand the Tomb Raider franchise through streaming and film. He highlighted the importance of strong partnerships, like those with Warner Bros. Discovery and Amazon MGM Studios, in their IP strategy.
Embracer acquired the rights to Middle-Earth Enterprises for $395 million in 2022, which includes various Tolkien-related properties. This acquisition was part of a major buying spree that also included Crystal Dynamics and other entertainment companies.
Following economic challenges and a downturn in gaming revenue post-pandemic, Embracer has undergone major restructuring, including selling some companies and closing game studios. The total number of employees has decreased from 16,601 to 12,069 in a year. Recently, Embracer announced its plan to divide the company into three publicly listed companies: Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. Source
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