Embracer Relies on Older Games Amid Rising Delays and Industry Profit Pressure
Embracer Group, the Swedish gaming conglomerate behind franchises like Tomb Raider, is increasingly depending on its back catalogue to sustain cash flow as delays and costs balloon across the gaming industry, CEO Lars Wingefors said on Thursday.
The shift, however, is not a permanent strategy, Wingefors emphasized, as the industry grapples with longer development cycles, soaring production budgets, and tempered consumer spending. Major releases — known as AAA titles — are now riskier than ever, and studios must deliver polished, high-quality games to avoid reputation and revenue damage.
“It’s very hard to repair a buggy or unfinished product,” Wingefors told Reuters.
Key Developments:
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Embracer will lean on legacy titles to support operations in the near term.
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It expects slight revenue growth and flat earnings for the fiscal year 2025/26.
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The group plans to split into three separate listed companies.
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Of nine planned AAA releases for FY2026–2028, at least one will be delayed, though no titles were specified.
Broader Industry Trend: Delay and Divide
The slowdown reflects a broader crisis in the games sector:
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Ubisoft, Embracer’s French peer, has twice delayed its new Assassin’s Creed title — which launched to praise after a polished rollout.
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The company has acknowledged it will now be more selective with new intellectual properties and focus on creating “evergreen” franchises that yield revenue over extended periods.
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Like Embracer, Ubisoft is shifting toward games that offer longer monetization windows rather than one-time launches.
Why Back Catalogues Matter Now
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Studios like Embracer are monetizing proven titles, which carry lower marketing risk, established fan bases, and predictable cash flows.
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During and post-COVID, demand for games surged, but current economic conditions and weaker consumer confidence are squeezing the profitability of newer, costlier ventures.
Looking Ahead: AI and Efficiency
Wingefors added that AI tools may boost efficiency for mid- and lower-tier titles, helping developers reduce costs and development times. Although still in early use, automation and generative design tools could help studios remain agile while tackling delays and budget constraints.
