Embracer Group has released its financial results for the first quarter of its fiscal year, with net sales down 24% year-on-year to SEK 7.9 billion ($754 million).
There were also sales declines in its mobile, tabletop and entertainment divisions, but the company said these were in line with expectations due to a quieter release schedule compared with the same quarter last year.
In particular, PC and console gaming suffered a 34% drop due to comparisons with the second quarter of calendar year 2023, when Plaion released the successful Dead Island 2.
The numbers
For the three months ended June 30, 2024
- Net sales: SEK 7.9 billion ($754 million, 24% less than the same period last year)
- Net loss: SEK 2.2 billion ($210 million, compared to a loss of SEK 2.3 billion / $219.4 million in the same period last year)
- Net debt: SEK 14.3 billion ($1.37 billion, compared to SEK 16.8 billion/$1.6 billion as of June 30, 2023)
Highlights
Breaking down net sales by segment, Embracer Group's table games were the largest revenue generator at SEK 3.04 billion ($290 million), down 5% from the previous year.
The PC/console segment was the second largest at SEK 2.7 billion ($253.5 million), with new releases accounting for SEK 146 million ($14 million), a year-over-year decrease of 91%.
This was because while Dead Island 2 launched in April 2023 and sold one million copies in its first three days, the biggest releases for Q2 2024 were Homeworld 3, MotoGP 24, Gigantic: Rampage Edition, and Oddsparks: An Automation Adventure, for which Embracer did not share sales figures.
Speaking about its upcoming releases, Embracer Group announced that Kingdom Come Deliverance 2 will be released on February 11, 2025. The game is expected to be Embracer’s biggest release of the financial year, but was originally scheduled for a 2024 release.
Mobile games generated 1.389 billion Swedish krona ($132.6 million), down 3% from the same period last year. However, Embracer failed to notice that the profitability of mobile and tabletop games has improved year-on-year.
Finally, the company's entertainment and services division suffered the biggest hit, falling 54% to SEK 848 million ($80.9 million). Once again, this was due to a lower number of new releases.
Elsewhere in the report, Chief Executive Lars Wingefors said the company's plan to split into three publicly traded entities “is progressing as planned.”
Board game publisher Asmodee will be the first to be spun off, with plans to list on Nasdaq Stockholm before the end of the year and more information to be revealed during a capital markets day during the third quarter (October to December 2024).
The listing and distribution of the entity provisionally titled 'Coffee Stain & Friends' is planned for calendar year 2025, which will leave the remains of Embracer under the provisional name of 'Middle-earth Enterprises & Friends'.