LogInWhile speculating on a connection between the two may be entertaining, the arrival of Warhorse's sequel most likely has nothing to do with it.
Over the past few hours, Swedish video game giant Embracer Group – owner of such studios as Crystal Dynamics, Eidos-Montréal, Ghost Ship Games, Flying Wild Hog, and Warhorse Studios – has entered the spotlight after a sharp and, for many, unexpected stock decline. Following the opening of Nasdaq Stockholm on Tuesday, the company's shares fell by approximately 44%, dropping to SEK 128.00 after closing at SEK 230.00 on Monday.
First spotted by Twitter user MarcoCorrosion, the plunge comes after 10 months of slow but steady growth, occurring just hours before the release of what is arguably one of Embracer's most anticipated 2025 titles, Kingdom Come: Deliverance II by Warhorse Studios. Adding to the intrigue is the fact that a similar 40% drop took place in May 2023, when Embracer revealed that talks for a potential $2 billion partnership with an undisclosed company had fallen through, ultimately leading to a company-wide restructuring campaign that saw numerous studio closures and over a thousand layoffs.
While speculating about possible connections between the new drop, the old drop, and the arrival of the KCD sequel may be entertaining, the most likely explanation appears to be the simplest one – the separation of Embracer into three distinct entities, announced in April 2024.
As part of this separation, Lars Wingefors, the current CEO of Embracer, will continue to oversee the three new companies: Asmodee Group, which will focus on tabletop games; Coffee Stain & Friends, which will develop games for PC, consoles, and mobile platforms; and Middle-earth Enterprises & Friends, which will concentrate on AAA games and include studios like Crystal Dynamics, Eidos-Montréal, and Warhorse Studios.
According to the company's official statement, Monday, February 3, was the last day of trading that included the right to shares in Asmodee, and a day later, Embracer began trading without the right to Asmodee shares under a 1:1 structure, meaning one Embracer share grants one Asmodee share. The nearly 40% difference in value, MarketScreener notes, can be explained by the value of Asmodee, which will become clear when the share begins trading on Friday, February 7.
On the other hand, as noted by MarcoCorrosion, the stock price flatlining after the initial drop, despite the impending release of Kingdom Come: Deliverance II, may suggest that the company is uncertain about the upcoming game, but it's up to people much more knowledgeable in economics than myself to determine who is right in this situation.
Warhorse Studios
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