Embracer Group is considering selling Gearbox, report claims

UPDATE: Gearbox says many options are under consideration, including taking the studio independent

Embracer Group is considering selling off Gearbox Software, according to a new report.

Reuters (via MarketScreener) says the Swedish company is looking at options for the the Borderlands studio, and that a sale is one of those options.

The publication cites “three people familiar with the matter”, speaking under anynonymity, who also reiterated that a sale is only being considered at this stage and may not happen.

Update11th Sep 2023 / 5:19 pm

In an email viewed by Bloomberg, Gearbox chief communications officer Dan Hewitt told staff there were many possible outcomes after the studio was put up for sale.

“The base case is that Gearbox remains a part of Embracer,” he wrote. “However, there are many options under consideration, including Gearbox’s transfer, taking Gearbox independent, and others. Ultimately, we’ll move ahead with whichever path is best for both Gearbox and Embracer.”

Two of the sources claim that Embracer has received interest from third parties keen on buying the studio, and is weighing up the possibility of selling it.

Potential buyers, who reportedly mainly consist of “international gaming groups”, already have access to Gearbox marketing materials, it’s claimed.

Embracer is in the process of restructuring after announcing in May that a major deal had fallen through unexpectedly at the last minute, causing it to slash its earnings forecast and resulting in a nosedive in shares by over 40%.

It was later reported by Axios that the deal in question was a $2 billion partnership with the Saudi government-funded Savvy Games Group, which lasted for seven months of negotiations before Savvy pulled out of the deal.

This led to Embracer announcing in June that it was implementing a new “restructuring program” which will see some game studios closed and some projects cancelled.

Embracer acquired Gearbox in 2021 for up to $1.4 billion (although the upfront fee was far lower), and since then has made numerous other high-profile purchases, including the rights to The Hobbit and The Lord of the Rings.

Last year the Swedish company acquired a large part of Square Enix’s western development arm for $300 million. The deal saw Embracer becoming the owner of Crystal Dynamics, Eidos Montreal, Square Enix Montreal, and a catalogue of IPs including Tomb Raider and Deus Ex.