Embracer Group sees 24% drop in Q1 2024 sales

Embracer Group has released its financial results for the first quarter of its 2024 fiscal year, reporting a significant 24% year-over-year decline in net sales to SEK 7.9 billion ($754 million). The company attributed this drop to tougher comparisons with the previous year, when it experienced tremendous success with the launch of Dead Island 2.

The company’s net loss for the quarter came in at SEK 2.2 billion ($210 million), an improvement from the SEK 2.3 billion ($219.4 million) loss recorded in the same period last year. On the balance sheet, Embracer’s net debt decreased to SEK 14.3 billion ($1.37 billion), down from SEK 16.8 billion ($1.6 billion) as of June 30, 2023.

Embracer’s various business segments all saw sales declines, with the PC/console games division suffering the largest drop of 34% due to the challenging comparison to Dead Island 2’s success in the prior year. The company’s tabletop games remained the biggest revenue generator at SEK 3.04 billion ($290 million), though this still represented a 5% year-over-year decrease.

While new game releases, such as Homeworld 3, MotoGP 24, Gigantic: Rampage Edition and Oddsparks: An Automation Adventure, contributed SEK 146 million ($14 million) in the quarter, this marked a 91% decline from the previous year when Dead Island 2 launched.

Looking ahead, Embracer announced that Kingdom Come Deliverance 2 is now expected to launch on February 11, 2025, making it the company’s biggest release in the upcoming fiscal year. The game was originally planned for a 2024 debut.

Embracer’s CEO, Lars Wingefors, also provided an update on the company’s previously announced plans to split into three publicly-listed entities. The first of these, tabletop publisher Asmodee, is on track to list on Nasdaq Stockholm before the end of 2024, with more details to be shared during a capital markets day in Q3 2024. The subsequent listing and distribution for the “Coffee Stain & Friends” division is planned for 2025, leaving the remaining “Middle-earth Enterprises & Friends” as the core Embracer Group.