Embracer Group to sell Saber for $500m in latest cost cutting exercise

Swedish company Embracer Group AB is set to sell Saber Interactive to a group of private investors for $500 million.

Saber is one of the gaming publishing and development arms of parent company Embracer. The company is made up of 20 individual gaming studios with 2,500 employees worldwide and has titles such as Warhammer 40,000: Space Marine 2, Jurassic Park: Survival, World War Z, and a possible reboot of Star Wars: Knights of the Old Republic in the works.

Bloomberg’s Jason Schreier broke the story and posted to X about Saber becoming a private company with a possible 3,500 employees, according to his unnamed source:

SCOOP: Saber Interactive, developer of the Star Wars: Knights of the Old Republic remake, will leave Embracer in a $500 million deal to become a privately owned company — the biggest move yet in Embracer's ongoing cost-cutting initiative https://t.co/QzpQ2uQ9r2

— Jason Schreier (@jasonschreier) February 29, 2024

A collapsed deal with an external investor in May last year left the company needing to take “control in our own hands.”

What those hands held was SEK 16.8 billion ($1.5 billion) debt at that time and the company has made strides to reduce this debt to SEK 8 billion ($728.2 million) by the end of this month, March 31.

A translated investor earnings call showed the CEO,  Lars Wingefors stating the collapsed deal and the prospective investor could not be named for legal reasons.

“You don’t comment on business partnerships unless both partners would like to do that,” Wingefors would say. “The background given to us as to why the partnership didn’t happen was not because of the terms or the pipeline of games. It was more, ‘Yes, they would like to do something in the future, but not now,’ which became a ‘no’ for us.”

Now might be the time for Embracer and these investors, but it remains to be seen if this $500 million deal has anything to do with the one that collapsed back in May 2023.

What it does define is the future of certain franchises and games under the Saber banner and helps the Swedish company take a serious amount off the debt they currently have.

Warhammer 40000: Space Marine was all set for a November 2023 launch and was pushed back to August 2024 after impressive gameplay gave fans much to get excited about. The much rumored Star Wars: The Knights of the Old Republic is still in development according to Schreier, but no news has been heard as the title has been in limbo since 2022.

Borderland’s developer Gearbox Interactive, who is also owned by Embracer, has been the source of many rumors with CEO Randy Pitchford supposedly holding an all-staff meeting about developments at the company, according to Kotaku.

Embracer has already seen one of their studios fold as Volition, the creator of the Saint’s Row franchise would post to Linkedin:

The studio’s collapse was one of the first signs of financial strain under Embracer, who had purchased 27 companies during the covid-era, with Saber being one of them.

Earlier this month we reported that Embracer would continue a restructuring process that follows from its inception in June 2023.

“As part of the restructuring program, Embracer still has a few larger structured divestment processes ongoing that could strengthen our balance sheet and further reduce [capital expenditure],” Wingefors said. “Processes are in mature stages.”

It seems the Saber deal has been in the works for some time and the restructuring of the balance sheet will continue for Embracer. A close eye will be kept on the company’s movements ahead of the projected deadline of March 31 to remove the rest of the debt they still carry.

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