Embracer Sees Significant Decline in PC and Console Sales During Q2

Embracer Group has released its Q2 financial results, revealing a decline in sales across all segments, particularly in its PC and console games division. For the three months ending September 30, 2024, net sales were SEK 8.55 billion ($774 million), representing a 21% year-over-year decrease. This includes a 46% decline in PC and console game sales, which reached SEK 2.12 billion ($192 million), and an 8% decrease in mobile game sales, totaling SEK 1.35 billion ($122 million). The company reported a net loss of SEK 390 million ($35 million), compared to a net loss of SEK 562 million ($51 million) during the same period last year. Over the six months ending September 30, 2024, net sales were SEK 14.4 billion ($1.30 billion), down 23% year-over-year, with PC and console game sales at SEK 4.77 billion ($432 million), a 40% decline, and mobile game sales at SEK 2.74 billion ($248 million), a 6% decrease. The net loss for this period was SEK 2.58 billion ($233 million), compared to a net profit of SEK 1.69 billion ($153 million) during the same period last year. The decline in PC and console game sales was largely due to a lack of new releases and mixed reception of existing titles. The company's back catalog sales also struggled, impacted by the divestment of Gearbox and parts of Saber Interactive, with sales down 21% year-over-year. In contrast, Asmodee saw solid earnings growth and remains on track to spin off this financial year. The number of game developers at Embracer Group decreased significantly, from 10,654 to 6,250, and the total headcount dropped from 15,701 to 10,450. The company currently has 128 game development projects in the works, down from 201 in Q2 FY24. Embracer expects lower earnings year-over-year due to the delay of notable games in the second half of the year, with Kingdom Come: Deliverance 2 being a key release for this financial year. The company has also announced the divestment of Easybrain to Miniclip in a $1.2 billion deal. CEO Lars Wingefors commented on the company's efforts to create a stronger foundation for long-term value creation, despite acknowledging underperformance in certain segments.