In a rare move absurd enough to make the already arcane licensing ownership of The Lord of the Rings somehow even more arcane, last year Swedish conglomerate Embracer Group, at the apex of a spree of acquisitions that hoovered up everything from game companies to comics publisher Dark Horse, acquired one of the key slices of Tolkien’s creative rights. Now, the group’s future is up in the air.
The Hollywood Reporter has word that Embracer has announced the promotion of a new interim COO, Matthew Karch, as part of a major restructuring that will see costs cut, layoffs, and even the potential closure of several of the gaming studios the group has acquired in its rapid expansion over the past few years.
“This morning we announced a restructuring program across the Embracer Group that will make us a leaner, stronger and a more focused, self-sufficient company,” Embracer CEO Lars Wingefors said in a letter about the restructuring. “During the past years, Embracer invested significantly, both in acquisitions and into a strategy of accelerated organic growth. We have acquired some of the world’s leading entertainment IP, and we have invested into one of the largest pipelines of games across the industry. The program presented today will transform us from our current heavy investment mode to a highly cash-flow generative business this year.”
While a lot of the announced plans revolve around Embracer’s gaming holdings (alongside publishers and back catalogues such as THQ Nordic and studios like Borderlands developer Gearbox, the group acquired the rights to legendary series like Tomb Raider and Deus Ex in its spate of rapid growth) it’s not yet known how these planned initiatives will affect people at Embracer’s other acquisitions. Aside from Middle-earth Enterprises, the vast entity that gives Embracer Lord of the Rings rights for video and board games, stage adaptations and physical experiences, merchandising, and specific kinds of film and TV adaptations using the settings, characters, and events of Tolkien’s work — Embracer also acquired the aforementioned Dark Horse, as well as boardgame developer Asmodee in recent years, among others.
Considering that Embracer is seemingly still full speed ahead on its approach to licensing Lord of the Rings out — aside from deals that continued after its acquisition with prior partners like Warner Bros. and Games Workshop, the company is licensing more LOTR video games, such as the recently revealed survival/crafting game Return to Moria — you’d presume the group is not going to cut away at its proverbial golden goose this soon. But regardless of what is ultimately safe from Embracer’s restructuring, it’s frankly insane to see the response to their own gleeful spree of corporate hoarding is to immediately start winnowing away at the people who made those businesses worth acquiring at the first place.
Not that The Lord of the Rings or The Hobbit have anything to say about the cost of blind avarice or what have you. Maybe someone in Embracer’s board rooms should try reading them at some point?