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Embracer Group net sales rise by 47% in Q1

CEO Lars Wingefors says "We are making good progress on the restructuring program"

Embracer Group has published its financial results for Q1, showing growth in net sales in all but one operating segment.

Here's what you need to know for the period ending June 30, 2023:

The numbers

  • Net sales: SEK 10.5 billion ($947 million, up 47% year-on-year)
  • PC/console games: SEK 4 billion ($364 million, up 74% year-on-year)
  • Mobile: SEK 1.4 billion ($127.5 million, down 3% year-on-year)
  • Net profit: SEK 2.59 billion ($236 million, compared to a net loss of SEK 182 million [$17 million] last year)

The highlights:

Embracer's net sales saw 20% organic growth, which was attributed to Dead Island 2's sales for its PC/Console segment.

The horror action title sold two million copies within a month of its release.

Wingefors also took note of Crystal Dynamics – Eidos's performance during the quarter.

"It is encouraging to see that Crystal Dynamics – Eidos's turnaround to solid profitability is ahead of plan, driven by cost efficiency improvements, a stable back catalog business, and increased external funding for ongoing development," he said.

Remnant 2, launched on July 25, was another success for Embracer, as it sold more than one million copies within four days.

Q1 net sales for tabletop games came in at SEK 3.2 billion ($292 million, up 20%). Meanwhile, Entertainment and Services saw net sales of SEK 1.8 billion ($164 million, up 174%).

Regarding Embracer's restructuring program, the CEO said that the firm is on pace to hit a financial net debt below SEK 8 billion ($729 million) by the end of the current financial year. Its net debt as of June 30 was SEK 16.8 billion ($1.5 billion).

"A painful consequence of the program is that a number of talented and passionate team members have left us or will be leaving us before the end of the financial year. We understand and respect that this is a challenging time for everyone impacted," said the CEO.

The challenging time he's referring to started with a potential $2 billion deal falling apart back in May. The strategic partner that backed out of the deal was revealed to be Savvy Games Group.

Among the actions taken towards the publisher's restructing program was the closure of Campfire Cabal. The studio was shut down less than a year after Embracer announced its establishment.

Looking ahead, the financial report highlighted the future releases of Payday 3, Warhammer 40,000: Space Marine 2, Alone in the Dark, and other titles.

Meanwhile, the group reiterated its adjusted earnings before income tax forecast for the fiscal year of between SEK 7 billion ($638 million) and SEK 9 billion ($820 million).

In the report's conclusion, Wingefors said, "We will continue to take important steps in FY 2023/24 to set the direction for the years to come, and I am confident that we will emerge a stronger company."

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Jeffrey Rousseau avatar
Jeffrey Rousseau: Jeffrey joined in March 2021. Based in Florida, his work focused on the intersectionality of games and media. He enjoys reading, podcasts, staying informed, and learning how people are tackling issues.
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