Embracer Group has spent the last few years trying to make sense of its massive portfolio after high-profile layoffs, studio closures, and the collapse of a $2 billion Savvy Games Group investment deal, and today the company laid out its biggest restructuring step yet. The Swedish holding company has announced plans to spin off Fellowship Entertainment as its own publicly listed company on Nasdaq Stockholm in 2027, splitting the group into two distinct businesses with separate strategies and leadership.
The Lord of the Rings, Tomb Raider, Kingdom Come: Deliverance, Dead Island, Darksiders, Metro, Remnant, and The Hobbit are the major IPs heading to Fellowship Entertainment, alongside studios including 4A Games, Crystal Dynamics, Dambuster Studios, Dark Horse Media, Eidos-Montréal, Fishlabs, Flying Wild Hog Studios, Gunfire Games, Middle-earth Enterprises, Redoctane Games, and Warhorse Studios. Current Embracer Group CEO Phil Rogers and COO Lee Guinchard will transition into the same roles at Fellowship after the separation, along with CFO Müge Bouillon.
Killing Floor, Gothic, Titan Quest, MX vs. ATV, Wreckfest, Biomutant, Destroy All Humans!, and Kingdom of Amalur are among the IPs staying with the remaining Embracer business, alongside licenses like Hot Wheels Unleashed and SpongeBob SquarePants. Studios staying include Aspyr, Beamdog, Limited Run Games, Milestone, Tripwire, Vertigo Games, and THQ Nordic with all 35 of its subsidiaries. The pitch from leadership is that splitting into two more focused businesses will let each entity execute more sharply than the current sprawling structure, with the remaining Embracer entity recruiting a new CEO and CFO ahead of the spin-off.
This isn’t Embracer’s first spin-off, with the company having previously separated Asmodee and Coffee Stain into their own entities, but it’s by far the most significant given what’s at stake. Fellowship Entertainment will start life with some of the most valuable IPs in the industry, especially with The Lord of the Rings rights becoming increasingly active across games, film, and television. Warhorse Studios, one of the studios heading to Fellowship, also announced today that it’s working on an open world Middle-earth RPG, which suddenly makes a lot more sense in the context of this restructuring.
Whether splitting up actually solves Embracer’s long-standing issues with management focus and shareholder communication remains to be seen, but for the studios involved, the path to 2027 should at least bring more clarity about which corporate parent they’re answering to. The leadership transition and a planned SEK 750 million ($80 million) share buyback program suggest Embracer is serious about resetting how it operates.
