Embracer sales drop 24% to $754m due to tough comparisons with Dead Island 2

Embracer Group has released its financial results for the first quarter of its fiscal year, with net sales dropping 24% year-on-year to SEK 7.9 billion ($754 million).

There were also sales declines across its mobile, tabletop and entertainment divisions, but the company said these were in line with expectations due to a quieter release slate compared to the same quarter last year.

Most notably, PC and console games suffered a 34% decline due to comparisons with calendar Q2 2023, when Plaion released the best-selling Dead Island 2.

The numbers

For the three months ended June 30, 2024

• Net Sales: SEK 7.9 billion ($754 million, down 24% year-on-year)
  
• Net Loss: SEK 2.2 billion ($210 million, compared to loss of SEK 2.3 billion / $219.4 million for the same period last year)
  
• Net Debt: SEK 14.3 billion ($1.37 billion, compared to SEK 16.8 billion / $1.6 billion as of June 30, 2023)

The highlights

Breaking up net sales by segment, Embracer Group's tabletop games were the biggest revenue generator at SEK 3.04 billion ($290 million) down 5% year-on-year.

PC/console was the second biggest segment at SEK 2.7 billion ($253.5 million), with new releases accounting for SEK 146 million ($14 million) – a year-on-year decrease of 91%.

This was because, while Dead Island 2 launched in April 2023 and sold one million copies in its first three days, the biggest new releases for Q2 2024 were Homeworld 3, MotoGP 24, Gigantic: Rampage Edition and Oddsparks: An Automation Adventure, for which Embracer did not share sales figures.

When discussing its upcoming releases, Embracer Group announced Kingdom Come Deliverance 2 will launch on February 11, 2025. The game is expected to be the biggest release of Embracer's financial year, but was originally slated for a 2024 launch.

Mobile games brought in SEK 1,389 million ($132.6 million), down 3% year-on-year. However, Embracer did not that profitability for both mobile and tabletop games has improved year-on-year.

Finally, the company's entertainment and services division took the biggest hit down 54% to SEK 848 million ($80.9 million). Again, this was due to fewer new releases.

Elsewhere in the report, CEO Lars Wingefors said the company's plan to split into three publicly listed entities is "progressing according to plan."

Tabletop publisher Asmodee will be the first to break away, with plans to list on Nasdaq Stockholm before the end of the year and more information to be disclosed during a capital markets day during the third quarter (October to December 2024).

The listing and distribution for the entity tentatively titled 'Coffee Stain & Friends' is planned for calendar year 2025, which will leave the remains of Embracer under the tentative name of 'Middle-earth Enterprises & Friends.'