Matthew Karch of Saber: Don't Count Out Embracer Just Yet

The Embracer Group has become a cautionary tale in the gaming industry, a prime example of what happens when a business expands too rapidly. 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, the company that purchased Saber and several other studios from Embracer for $247 million, thinks that Embracer did a commendable job of minimizing layoffs over the past year. He attributes the negative perception of Embracer to the fact that the company has become a target for criticism, with many people taking pleasure in its misfortunes. Karch praises Embracer's CEO, Lars Wingefors, for his sense of fairness and reasonableness, particularly in the process of terminating studios. He acknowledges that the company's rapid growth led to the need for swift staff reductions, but argues that the layoffs were not disproportionately severe compared to other similar situations in the industry. Karch also emphasizes that Embracer has assembled an impressive collection of assets, including Tomb Raider, Lord of the Rings, and Dead Island, which are worth significantly more than the company's current market cap. He expresses sympathy for the challenges Embracer has faced, including the collapse of a major deal with an external investor, which triggered the company's restructuring process. Karch suggests that Embracer's decentralized structure and the pressure to continually grow and expand contributed to its difficulties. He believes that the company has been a victim of stock shorting, which has driven down the share price and increased pressure from external parties, ultimately leading to layoffs. Despite these challenges, Karch remains confident in Embracer's potential for recovery, citing the company's talented team and promising unannounced projects. He advises against betting against Wingefors, who he believes is now more in control of the company's destiny than ever before.