There is a precise technical answer to your question a finance person can probably give you but it doesn’t really answer the question no matter how many acronyms they throw at you.
The actual answer is that there is no reason any of this has to be rational. Business people believe so strongly that companies like embracer are valuable and have a function in society that they detect zero cognitive dissonance when said companies don’t actually do anything but buy smaller companies, dissect them and destroy value.
You can’t understand business and finance people like they are scientists, they are closer to priests of a religious sect that believe in things because of their belief system not because of some rational framework that actually supports their ideas.
I think for the rich, it is just “good practice” to commit economic violence against smaller companies, it is good hygiene for keeping the power in the hands of the rich like mowing a field once a year or something. This doesn’t fully explain how poorly some of these companies function like embracer however.
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It seems like the only time you hear about Embracer is when they are cancelling games or closing studios.
What even is their purpose?
They’re the holding company that used to be “thq”
Kind of like how Alphabet is to Google, or Meta is to Facebook and Instagram.
They supposedly should have an investment deal with a Saudi backed company. But failed last year https://www.theverge.com/2023/8/14/23831768/embracer-group-saudi-government-lord-of-the-rings-investment-deal-collapse
So they need a lot of cash now
deleted by creator
Canceling games and closing studios.
Not so fast! Sometimes they also announce the return of old franchises, just to be shut down shortly after.
Like Timesplitters 4.
There is a precise technical answer to your question a finance person can probably give you but it doesn’t really answer the question no matter how many acronyms they throw at you.
The actual answer is that there is no reason any of this has to be rational. Business people believe so strongly that companies like embracer are valuable and have a function in society that they detect zero cognitive dissonance when said companies don’t actually do anything but buy smaller companies, dissect them and destroy value.
You can’t understand business and finance people like they are scientists, they are closer to priests of a religious sect that believe in things because of their belief system not because of some rational framework that actually supports their ideas.
I think for the rich, it is just “good practice” to commit economic violence against smaller companies, it is good hygiene for keeping the power in the hands of the rich like mowing a field once a year or something. This doesn’t fully explain how poorly some of these companies function like embracer however.
Step 1. Amalgamate as many smaller studios as possible
Step 2. Probably some BS about tax writeoffs or packaging debt for sale
Step 3. Profit? (but not enough to pay anyone outside the C suite and maybe investors)