Not a surprise. Anything this company touches is sinking. These giant gaming conglomerates don’t make an iota of business sense. The whole point of a conglomerate buying a whole bunch of similar businesses, aka horizontal integration, is so these businesses can share the same knowledge, infrastructure and supply lines and benefit from economies of scale to lower costs. Like an oil conglomerate using their own tankers to transport oil for all their subsidiaries. But in the gaming industry there is barely any overlap between two studios where synergy can happen. Except for the business admin, promotion and advertising side. But that is a tiny fraction of the costs of big budget production. The biggest cost is on the production side and every studio needs their own set of directors, producers, designers, artists, programmers etc. Another goal of horizontal integration is capturing market share, but with games you run the risk of cannibalizing your own sales especially how Embracer is doing it since most studios in their portfolio are from the same region in the world making games for similar markets.
EA and Ubisoft tried this before and failed miserably and they sold or shuttered almost every studio they bought. The only one who does a good job at it is Sony, but even they don’t have as many studios as Embracer and they rely on Chinese digital asset sweatshops.
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Not a surprise. Anything this company touches is sinking. These giant gaming conglomerates don’t make an iota of business sense. The whole point of a conglomerate buying a whole bunch of similar businesses, aka horizontal integration, is so these businesses can share the same knowledge, infrastructure and supply lines and benefit from economies of scale to lower costs. Like an oil conglomerate using their own tankers to transport oil for all their subsidiaries. But in the gaming industry there is barely any overlap between two studios where synergy can happen. Except for the business admin, promotion and advertising side. But that is a tiny fraction of the costs of big budget production. The biggest cost is on the production side and every studio needs their own set of directors, producers, designers, artists, programmers etc. Another goal of horizontal integration is capturing market share, but with games you run the risk of cannibalizing your own sales especially how Embracer is doing it since most studios in their portfolio are from the same region in the world making games for similar markets.
EA and Ubisoft tried this before and failed miserably and they sold or shuttered almost every studio they bought. The only one who does a good job at it is Sony, but even they don’t have as many studios as Embracer and they rely on Chinese digital asset sweatshops.