Embracer Posts Strong Q1 2023 Results with Impressive Growth Across Segments

Embracer Group, a prominent player in the online gaming industry, has announced its robust financial performance for the first quarter of 2023. The company reported remarkable growth, driven by standout titles and strategic initiatives across various segments.
embracer group tomb raider gamesThe online gaming giant revealed that its Q1 sales surged by an impressive 47 percent, reaching SEK 10.5 billion. The surge was attributed to the resounding success of Dead Island 2 in the PC/Console Games segment and solid growth in the Tabletop Games and Entertainment & Services segments.

Embracer Group CEO Lars Wingefors expressed confidence in the company’s earnings outlook for the year and highlighted the successful execution of their restructuring program. He stated, “We now have increased confidence regarding earnings this year and we are on track to deliver on the restructuring program.”

In the PC/Console Games segment, Embracer saw a significant organic sales growth of 38 percent during Q1, largely attributed to the launch of Dead Island 2. This game, which hit the market on April 21, achieved a remarkable sell-through of over two million units within its first month.

Crystal Dynamics – Eidos, a subsidiary of Embracer Group, demonstrated solid profitability that exceeded expectations. This achievement was driven by cost efficiency enhancements, a robust back catalog business, and increased external funding for ongoing development.

Embracer Group’s commitment to releasing top-quality games was underscored by the success of Remnant II, developed by Gunfire Games. The game achieved remarkable sales of over one million units within the initial four days of its release on July 25.

Looking ahead, the company revealed its exciting pipeline for FY 2023/24, which includes highly anticipated titles such as Payday 3, Warhammer 40,000: Space Marine 2, South Park: Snow Day!, Homeworld 3, Hot Wheels Unleashed 2: Turbocharged, Teardown (console), Alone in the Dark, and Outcast – A New Beginning.

The Tabletop Games segment, represented by Asmodee, achieved 9 percent organic growth with net sales of SEK 3.2 billion. While the product mix in this segment leaned towards trading card games, resulting in a margin impact, the segment still delivered commendable performance.

Embracer Group’s Mobile Games segment showcased solid profitability ahead of expectations, even though net sales displayed a -12 percent organic growth. Nonetheless, market trends improved sequentially, and the organic decline moderated significantly compared to the previous quarter.

The Entertainment & Services segment made a substantial contribution, achieving a 70 percent organic growth with a 15 percent Adjusted EBIT margin. This success was largely driven by Middle-earth Enterprises, which reported strong licensing revenue for The Lord of the Rings. The segment’s performance surpassed initial acquisition expectations.

Embracer Group highlighted its strategic investments into accelerating long-term organic growth in the PC/Console Games segment. The company’s ongoing investments in future game releases have significantly exceeded completed development, leading to the value of ongoing game development surpassing SEK 10 billion by the end of June.

In summary, Embracer Group’s Q1 2023 results underscore its commitment to quality gaming experiences, strategic investments, and impressive growth across multiple segments. With a promising pipeline of upcoming titles, the company is poised to continue its trajectory of success in the dynamic gaming industry.