Mediocre developer bought, the Swedish are taking over

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uninspiredcup

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#1 uninspiredcup
Member since 2013 • 58643 Posts

Oh shit, left my USB stick man has new overload. Hopefully he can resist punching them.

Embracer Group acquires Borderlands maker Gearbox Entertainment for $1.3 billion

Borderlands maker Gearbox Entertainment said it is being acquired by the Embracer Group for up to $1.3 billion.

Frisco, Texas-based Gearbox will become a wholly-owned subsidiary of the Karlstad, Sweden-based company. The transaction gives Gearbox access to new capital to help it make more games and become a significant part of the Embracer Group, which has 5,500 employees around the world.

Now it is adding Gearbox’s team of 550 in Frisco, Texas, and Quebec City, Canada, to its roster. Gearbox will become Embracer Group’s seventh operating group. Embracer Group made headlines in November when its buying spree exploded; the company announced it had acquired 12 game studios and a PR firm in a single day. And at the same time that Embracer Group announced the Gearbox deal, it also said it was buying Easybrain, a mobile game maker in Cyprus, for $640 million.

Over the years, Gearbox has worked on the Borderlands and Brothers in Arms franchises and it helped with the development of Half-Life, Counter-Strike, Tony Hawk’s Pro Skater, 007 James Bond, and Halo.

“Lars’s vision of Embracer as an allied partner group committed to fueling and accelerating the ambitions of a series of decentralized, successful entrepreneurial companies while magnifying the collective value and advantages of diversification across the entire group is the most brilliant strategy and design for short, medium, and long-term success in this industry that I have ever encountered in my 30 years in this industry,” said Randy Pitchford, founder of Gearbox, in a statement. “The feeling at Gearbox is that we are just getting started and this transaction is not merely a stimulant for the talent of our employee-owned company, but a propellent for the exciting future we have planned.”

The Gearbox team has developed and engaged a plan for immediate and long-term growth that includes the expansion of talent at both studios, the creation of new Gearbox studios, and expanded partnerships. This merger enables Gearbox to do more with its existing brands, create new brands, and, potentially, undertake the merger and acquisition of other successful industry and industry-adjacent entities and properties.

“Gearbox is arguably one of the most creative and valuable independent developers in the world,” said Lars Wingefors, founder and CEO of Embracer Group, in a statement. “We believe that the resources offered by Embracer will position Gearbox for significant growth in the years to come.”

Gearbox confirmed that Pitchford will continue in his current role as head of Gearbox, which he started in 1999. Juno Capital Partners and Union Square Advisors acted as M&A and financial advisors to Gearbox on this transaction and Fenwick & West acted as legal counsel.

Embracer Group is the parent company of game businesses with a catalog of over 200 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, Insurgency, and World War Z, amongst many others.

Embracer Group’s other groups include THQ Nordic GmbH, Koch Media GmbH/Deep Silver, Coffee Stain AB, Amplifier Game Invest, Saber Interactive, and Deca Games. Embracer Group has 57 internal game development studios in 40 countries.

Embracer said that Gearbox generated $123 million in sales for the nine months ended September 30. For the full calendar year of 2019, Gearbox generated sales of $125.2 million and operational earnings before interest and taxes of $37.7 million.

Under the deal, Embracer will pay $188 million in cash and $175 million in newly issued Embracer B shares. If Gearbox hits targets for operations in the next six years, it will also get a maximum of $1.01 billion. Of that amount, $360 million will be issued in Embracer B shares and the remaining $655 million will be in cash.

Gearbox’s portfolio includes Borderlands, Brothers in Arms, Homeworld, and Duke Nukem. The Borderlands franchise currently has three blockbuster installments and the franchise has sold more than 60 million copies to date. The Brother in Arms series has sold more than 10 million copies to date. Gearbox Software, the game development unit, has developed more than 20 game titles over almost two decades with hundreds of millions units sold combined.

Gearbox Publishing, the publishing unit, has published indie titles such as Hello Neighbor (2017), We Happy Few (2018), Risk of Rain 2 (2019) and Godfall (2020).

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hardwenzen

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#2 hardwenzen  Online
Member since 2005 • 38123 Posts

Nothing lost. GB were making shitty games, and that will continue.

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#3  Edited By madrocketeer
Member since 2005 • 10560 Posts

Ahem, might I interest you in a thread I wrote two months ago?

Today, Swedish video game company Embracer Group have acquired 11 new studios, including Shadow Warrior devs Flying Wild Hog and Phoenix Point devs Snapshot Games.

You should be paying attention.

Established as Nordic Games back in 2008, Embracer have been on an acquisition spree since they acquired THQ assets to form THQNordic. They are also owners of Koch Media and Saber Interactive.

Together, their portfolio is vast and varied. They own Coffee Stain Studios (Satisfactory, Deep Rock Galactic), Volition (Saints Row), 4A Games (Metro series), New World Interactive (Insurgency: Sandstorm), Black Forest Games (Destroy All Humans! remake), Piranha Bytes (Gothic & Risen games), and Gunfire Games (Darksiders III, Remnant: From the Ashes), just to name a few. If you've partaken in some well-known and solid mid-budget games in the last 10 years, chances are you've given money to the Embracer Group.

And they are still growing. It seems they are intent on becoming the dominant AA giant. And considering development costs of the AAA sector continue to spiral upwards, the AA sector could be a more sustainable model in the long run. Their portfolio are certainly attractive additions to some kind of a subscription service, such as Game Pass.

Well, this is most definitely their most eye-catching acquisition yet, pretty much moving up from AA to AAA game development. That said, Gearbox had a reputation for releasing a game on time and on budget, so this in some ways do fit.

Also, this is a reunion of sorts; Homeworld was one of the IPs sold off when THQ went under. THQ's trademark itself went to Embracer, who formed THQNordic, and who now owns Homeworld through Gearbox.

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deactivated-642321fb121ca

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#4 deactivated-642321fb121ca
Member since 2013 • 7142 Posts

Bought Aspyr too.

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PC_Rocks

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#5 PC_Rocks
Member since 2018 • 8461 Posts

Can they fire that a$$hole CEO then?

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#6  Edited By madrocketeer
Member since 2005 • 10560 Posts
@Random_Matt said:

Bought Aspyr too.

Yup, though Aspyr is more a of a porting house than a developer. They'll probably be put to support Embracer's other studios.

They're likely to be very, very busy in the coming years.

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freedomfreak

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#7 freedomfreak
Member since 2004 • 52420 Posts

This dude keeps falling into piles of money.

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deactivated-642321fb121ca

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#8 deactivated-642321fb121ca
Member since 2013 • 7142 Posts

@madrocketeer said:
@Random_Matt said:

Bought Aspyr too.

Yup, though Aspyr is more a of a porting house than a developer. They'll probably be put to support Embracer's other studios.

They're likely to be very, very busy in the coming years.

They are making a new game with a 70 million budget. Perhaps the unguessable studio Jason Schreier that is making KOTOR 3.

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madrocketeer

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#9  Edited By madrocketeer
Member since 2005 • 10560 Posts
@Random_Matt said:

They are making a new game with a 70 million budget. Perhaps the unguessable studio Jason Schreier that is making KOTOR 3.

Hmm. I've just checked Embracer's official announcement. Seems you're right. looks like Aspyr have been looking to step up and diversify even before the acquisition. Good luck to them.

That would be very tantalising. As I said, it always interests me when a game studio does something completely different to their previous works, because I consider it a true test of their capabilities. This would certainly fit the bill. Rumour not confirmed, but at this point, I kind of hope it's true.

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Litchie

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#10 Litchie
Member since 2003 • 34469 Posts

First time I've heard about this. Bit odd as I'm swedish.

Meh, don't really care though. Can only hope this means more and better games.

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#11 BassMan
Member since 2002 • 17763 Posts

Embracer is like the euro Tencent. They buying up all kinds of shiznit.

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deactivated-60bf765068a74

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#12 deactivated-60bf765068a74
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@Litchie said:

First time I've heard about this. Bit odd as I'm swedish.

Meh, don't really care though. Can only hope this means more and better games.

You remember what happened to Rare when Microsoft bought them right? We didn't get better games remember?

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#13 Sancho_Panzer
Member since 2015 • 2522 Posts

Where are all these studios going? EGS? Sony? MS? Rubbish heap? It's a big portfolio they've acquired now.

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#14  Edited By AcidTango
Member since 2013 • 3211 Posts

@BassMan said:

Embracer is like the euro Tencent. They buying up all kinds of shiznit.

And the same as Microsoft as well. They are all buying so many game companies.

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#15 lamprey263
Member since 2006 • 44503 Posts

And Randy Pitchford retains his position?! Barf. What were they thinking? That the company just needed new capital? What it needs is new leadership.

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with_teeth26

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#16 with_teeth26
Member since 2007 • 11511 Posts

better Embracer than Tencent. They are putting together a solid collection of mid-tier studios.

i'm one of the people who has liked most of Gearbox's work (other than Aliens Colonial Marines obviously)

Borderlands is great, enjoyed Brothers in Arms in its day as well.

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#18 ThatDBFan
Member since 2019 • 939 Posts

Was never a big fan of them. Only really liked Borderlands 3 tbh.

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#19 lamprey263
Member since 2006 • 44503 Posts

They should pump money into that Swedish developer that made Generation Zero, because that game was awesome. Love to see what that could be with a well funded sequel.

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#20 nintendoboy16  Online
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@BassMan said:

Embracer is like the euro Tencent. They buying up all kinds of shiznit.

Minus the connections to more... "totalitarian" friends.

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#21 mrbojangles25
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“Lars’s vision of Embracer as an allied partner group committed to fueling and accelerating the ambitions of a series of decentralized, successful entrepreneurial companies while magnifying the collective value and advantages of diversification across the entire group is the most brilliant strategy and design for short, medium, and long-term success in this industry that I have ever encountered in my 30 years in this industry,” said Randy Pitchford, founder of Gearbox, in a statement. “The feeling at Gearbox is that we are just getting started and this transaction is not merely a stimulant for the talent of our employee-owned company, but a propellent for the exciting future we have planned.”