Embracer CEO Lars Wingefors told investors that the PC/Console business is the “bad guy” within the company.
Outlining why Embracer stopped providing hard guidance each quarter, Wingefors said there’s a certain “lumpness” in the PC/Console segment that prevents him from looking too far into the future. Case in point: Kingdom Come: Liberation II, which was published by Embracer subsidiary Deep Silver, has just been delayed to February 2025 (Thanks Eurogamer). The launch was initially planned for this year.
Wingefors reiterated that overall business is performing in line with expectations, but also stressed that the PC/Console segment remains a “volatile” proposition, especially when compared to other companies such as board game maker Asmodee.
“Asmodee is a fantastic business to run in terms of stability in delivering numbers,” Wingefors said during a question and answer session with investors.
“The mobile business is the same. The PC/Console guy is the 'bad boy' because it's a little volatile. But I'm very confident and excited about the future prospects of that business, especially now after the restructuring.”
That Restructuring program has seen Embracer divest major assets such as Gearbox entertainment AND Interactive sabre. It also led to mass layoffsproject cancellations and studio closures.
As noted in his tax report In the quarter ended June 30, 2024, Embracer saw net sales in its PC/Console business decline 34 percent year-over-year to SEK 2.65 billion ($253.2 million).
The Swedish company attributed the decline to “lower release activity” and a “difficult comparison” year-on-year due to the release of Dead Island 2 in the corresponding quarter.
“The release of which is excluded Dead Island 2 in the comparison quarter, organic growth was 15 percent in Q1,” Wingefors added. “The adjusted EBIT margin of 5 percent is impacted by the amortization of low ROI releases over the last 24 months. New content released for Deep Rock Galactic, Residue II AND Dead Island 2 It worked well, in line with management's expectations.”
To elaborate a little, Wingefors said that Embracer's broader PC/Console pipeline “looks solid” and noted that the company still plans to “release SEK 3.9 billion worth of full games for the financial year.”