Embracer Group, owners of the Dead Island and Tomb Raider franchises, see stock prices plummet as a transformative partnership deal falls through.
Swedish gaming company Embracer Group reported (via Reuters) that a “large planned strategic partnership” fell through last night, thus lowering its profit outlook and tanking share prices. As of this morning, the company’s share price is currently down 40%. While the partnership deal and the company in question has stayed mostly anonymous so far, it’s clear that this is a massive blow to the organization in a video games industry where other developers have been laying off staff.
According to the report Embracer states:
The deal would have enabled a catch-up payment at closing for already capitalized costs for a range of large-budget games, but also notably improved medium-to-long-term profit and cash flow predictability for the duration of the game development projects.
This comes off the heels of the recent release of Dead Island 2, one of the company’s key franchises, which received average reviews from critics and players alike while still selling over 1 million copies during its release weekend.
Embracer Group owns a wide variety of gaming studios, including Deep Silver, Saber Interactive, THQ Nordic, and many other pillars in the game publishing industry.
As a result of projected profits not being as high as estimates, the company has also postponed planned releases for various games under development, though no specific titles were cited.
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