The Group pays more fees to platforms than it spends on game development.
During a Q&A session at Embracer Group's Annual General Meeting, the company's CEO Lars Wingefors said that more studios will be shut down in the future. The organization is "making decisions to either restructure or downsize some teams and there will be a few cases of closures."
Embracer is also apparently looking for outside investment to avoid some layoffs.
"There is a strong vibrant market with many, many active players – both financial sponsors and big industry players – but it’s easier to run proper processes for, I would say, more high-value assets than smaller assets."
The Embracer CEO was also asked about Epic First Run – a program for games that have not been released on Steam, Microsoft Store, and other platforms that allows developers to increase their share of revenue in the first six months. He said it's "good for competition with Steam because it puts them on their toes to deliver the best experience."
Wingefors also claimed that platform shares take more money from Embracer than it spends on developing games.
“Obviously, we would like to pay less fees to platforms. In reality, we are paying more fees to platforms than we spend on game development every year, and if you just think about that number, it’s crazy."
Image credit: Gearbox Software | Borderlands 3
Naturally, he wants to decrease these costs, so Epic's initiative sounds like a great idea to him, although he admits that players might look at this differently. "They want to be able to pick their platform, so there are many different perspectives to that, and I don't want to go too deeply into that, but I think competition in general is great."
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