Saber Interactive Founder Matthew Karch Offers Support for Embracer

The Embracer Group has become a cautionary tale in the gaming industry, exemplifying the consequences of rapid expansion. However, Matthew Karch, the founder of Saber Interactive and former member of Embracer's leadership team, believes that criticism of the company has been overly harsh. Karch, who now heads Beacon Interactive, which recently acquired Saber and several other studios from Embracer for $247 million, argues that Embracer has done a commendable job of minimizing job losses over the past year. He praises Embracer CEO Lars Wingefors, describing him as a humble and reasonable leader who has been unfairly maligned. Karch attributes Embracer's struggles to the sudden shift in market sentiment, which made it challenging for the company to raise capital. He also cites the collapse of a significant deal with an external investor, which would have provided Embracer with substantial cash flows. The acquisition of Asmodee, a French tabletop specialist, for €2.75 billion, further exacerbated Embracer's financial difficulties. Karch suggests that Embracer's decentralized structure hindered its ability to respond quickly to the changing market conditions. Despite these challenges, Karch remains optimistic about Embracer's future, citing the company's impressive portfolio of assets, including Tomb Raider, Lord of the Rings, and Dead Island. He believes that Embracer's assets are undervalued and that the company has the potential to recover. Karch also criticizes the practice of stock shorting, which he believes has contributed to Embracer's depressed share price and increased pressure on the company. Ultimately, Karch expresses confidence in Lars Wingefors' leadership and is bullish about Embracer's prospects, stating that he would not bet against the company's ability to recover and thrive in the future.