Embracer has stated its intention to turn The Lord of the Rings into “one of the biggest gaming franchises in the world” as part of a costly restructure that will see in-development projects cancelled, studios closed, and staff layoffs.
Embracer CEO Lars Wingefors explained in an open letter to the company’s 17,000 employees that the company will decrease spending across the board, limit third-party publishing, and “put greater focus on internal IP and increase external funding of large-budget games”.
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During a webcast following the restructuring announcement, Embracer executives made it clear that the company will abandon any games and studios that fail to generate sufficient profit, in favour of projects that are likely to generate significant revenue.
Interim chief operations officer Matthew Karch stated during the webcast that focusing on The Lord of the Rings video games at the expense of other projects is a priority for Embracer.
“We own Lord of the Rings, and we know we need to be exploiting Lord of the Rings in a very significant fashion and turn that into one of the biggest gaming franchises in the world. That’s obviously something we’re going to be doing,” said Karch.
Embracer CEO Wingefors announced that the company will begin a “thorough review process” for investments in new game development projects, emphasizing “increased focus on accountability” and “ensuring performance is in line with or exceeding current targets”.
Embracer has acquired Middle-earth Enterprises and other companies, such as THQ Nordic, Plaion, Saber Interactive, Gearbox, Dark Horse Media, Coffee Stain, Crystal Dynamics, Eidos-Montreal, Asmodee, Amplifier, and Deep Silver, among others.
In August 2022, Embracer acquired the rights to The Lord of the Rings and The Hobbit and announced plans to develop new games, movies, and more based on these intellectual properties. Embracer recently signed a deal with Amazon Games for a new MMO based on The Lord of the Rings, which is currently in its early stages of development and has no official title.
Embracer’s decision to prioritize The Lord of the Rings video games raises questions about the future of other Embracer projects, such as Aspyr’s Knights of the Old Republic remake.
Wesley Yin-Poole is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.