11 Mar — 17 Mar / 2024

Weekly News Digest #11


# of announced deals
announced deals’ size
# of closed deals

Embracer Group sells Saber Interactive for $247m


Embracer Group To Sell Saber Interactive

Embracer Group sells Saber Interactive for $247m

Sweden-based gaming holding Embracer Group (STO: EMBRAC B) has sold PC & console games developer Saber Interactive, for $247m to Beacon Interactive, a company owned by Saber’s original co-founder Matthew Karch.

Transaction Key Details: 

The transaction allows Embracer to cease all of its operations in Russia — a strategic move announced along with the sale. The consideration for the transaction is $247m, comprising of:

— $203m paid with promissory notes to be repaid in cash by the end of 2024;
— $44m of absorbed earn-out debt obligations set during Saber’s acquisition by Embracer.

If Beacon Interactive resells some of the acquired assets for a higher price during the undisclosed time frame, Embracer might get an additional payment of up to $94m.

Beacon Interactive will also take all the earn-out obligations before Saber and guarantee their payment if the targeted goals from the original deal are met.

Prior to the analysis, a brief overview of the acquired assets and terms is required. Four years as Embracer’s operative group turned Saber Interactive into a large business with over 20 subsidiaries, but not all of them will separate from Embracer as a result of the transaction. Beacon Interactive will acquire the following subsidiaries along with Saber: Nimble GiantNew World Interactive3D RealmsSandbox StrategiesMad Head GamesSlipgateFractured ByteDigic — all these studios were acquired during the period from Nov’20 to Dec’21. Overall, Beacon Interactive will acquire 38 ongoing gaming projects and additional proprietary gaming engines and tools related to the divested studios.

Embracer retained assets
Source: Embracer Group’s Presentation

Post-transaction, Embracer will retain control under the following studios previously being operated by Saber: AspyrBeamdogTripwireTuxedo Labs4A Games34 Big ThingsDemiurgeZen StudiosSnapshot, and Shiver. Retained gaming projects include 4 AAA titles, 2 AA titles, Killing Floor 3, and Teardown, as well as the back catalog from Zen Studios, Aspyr, and Tripwire, for a total book value of ~$48.1m.

As a part of the deal, Beacon signed an option, allowing the company to purchase 4A Games and Zen Studios within a set time for a fixed undisclosed price, which will be higher than their current book value of $81m. The deal’s full details are private, but if the Beacon goes ahead, it will also be liable to sign $31m of extra earn-out consideration. The rights to the Metro game series, however, will still stay with Embracer.

Embracer: A Big Step For Optimisation

The sale is a strategic step towards Embracer’s larger goal of optimizing its operations as a part of the restructuring process launched in Jun’23. The specific reasons for the restructuring have been discussed in one of our previous digests.

As a result of this transaction, Embracer’s Capex will be reduced by $115m (SEK 1.2B), which represents a significant step towards the company’s targeted reduction of $278m (SEK 2.9B). With this transaction alone, Embracer has achieved 41% of its Capex reduction goal. Another strong expense cut would be made with 21% (2950 employees) of Embracer’s headcount separating after the acquisition.

Embracer financials
Source: Embracer Group

More financial details on the optimization can be found in the table above. One of the key achievements is the reduction of the holding’s debt by $201m after passing earn-out liabilities and getting proceeds from the transaction.

Reducing the complexity of such a huge holding requires big moves and significant cuts, even if they imply a great decline in the assets evaluation. Back in 2020, Embracer set a $525m Saber valuation with the acquisition. However, only a $150m part was paid as an initial consideration, with $375m being set as a potential earn-out to be paid in the following 6 years, provided that agreed milestones are fulfilled. Considering the period of the earn-outs, not all of them were paid and some might be paid to Saber’s management later by Beacon Interactive, as mentioned earlier.

Nevertheless, the $247m valuation is still much lower than the company saw 4 years ago. Especially considering all the additional studios that were put under the wing of Saber during Embracer’s M&A activity and are now leaving the holding together with Saber. Such growth allowed Saber to expand its staff from 600 employees in 2020 to a team of over 2950, which are being divested from Embracer now.

Most importantly, by selling Saber Interactive, a key developer of PC & console games known for its AAA projects, Embracer Group has made a pivotal shift in its business focus. This move, coupled with rumors around the potential sale of Gearbox, signals a transition from the AAA segment towards AA and indie.

Embracer stock
Source: Yahoo Finance

Saber: Challenges and Opportunities of Independence 

In many senses, the deal is about the preservation of Saber’s legacy, including IPs, portfolio, teams, and projects that are currently under development. The company gets back to its co-founder, who left Embracer to make the deal possible. This opens a lot of prospects for the once again independent company, be it attracting new investors or even selling the company to someone else. Now, there is no investors’ pressure Embracer inevitably faces being a public company, which gives more freedom in the decision-making.

Freedom, on the other hand, might come with greater risks. Now the company needs to sustain itself and work independently. Most importantly, if the company intends to execute the options for 4A Games and Zen Studios, it might either perform especially well or initiate fundraising as soon as possible. If everything goes well, more stability under new ownership will allow more investments in the company’s growth, development, and continuation of its projects without the constraints Embracer’s current financial or strategic priorities might impose.

Considering all of that, the deal represents how both companies are ready to adapt to keep their businesses afloat. It shows that sometimes the industry is not about huge valuations and rapid growth. It’s about making hard decisions for the sake of keeping something bigger and moving through the hard times.



US-based gaming peripherals company Turtle Beach is set to acquire US-based console controllers creator PDP for $118m. PDP, known for its licensed gaming accessories and peripherals, including the popular Rock Band and Guitar Hero controllers, will join Turtle Beach’s portfolio. This acquisition will diversify Turtle’s Beach product offerings and expand its presence in the gaming peripherals market.

China-based tech giant Tencent (HKG: 0700) has acquired two game studios from Bytedance as part of the latter’s shift away from gaming. This move aligns with Tencent’s broader business strategy of diversification and investment in emerging technologies and industries beyond gaming.

US-based social media and entertainment company Grom Social Enterprises has announced the acquisition of US-based mobile games developer Arctic7 for an undisclosed sum. This acquisition would diversify Grom’s existing entertainment portfolio.

Singapore-based games developer company Virtuos has acquired US-based game tech company Beyond-FX for an undisclosed amount. Virtuos intends to expand its portfolio by integrating Beyond-FX’s VFX in its portfolio, which will increase game development efficiency.


US-based game tech company Kaedim has raised $15m in a Series A funding round led by a16z, with participation from Pioneer Fund, and other investors. The company is focused on 3D gaming generation technologies. The investment will be used for team expansion.

Korean-based mobile web3 games developer Carbonated Inc. has raised $13m in a Series A funding round led by Com2uS. Other participants include a16z, Bitkraft Ventures, Cypher Capital, Blocore, Goal Ventures, and WAGMI Ventures. The funding will fuel the development process of its post-apocalyptic NFT shooter game MadWorld.

Japan-based VR games developer company Thirdverse has raised $11.3m in a Series D from Nissei Capital Co. and VeriServe Corp. This round led Thirdverse’s total funding to $42m. The investment will be used to support the development of VR games, and strengthen the team, and infrastructure.

Singapore-based web3 game developer Metacene has raised $10m in a funding round led by venture capital firm Makers Fund. Metacene is currently developing a web3 mobile MMO title, which is available in alpha. The investment will fuel the studio’s expansion plans and support the development of its gaming projects.

Israel-based tech company UG Labs has raised $7m in a funding round led by Amiti Ventures and MoreVCMediaTek and other investors have participated in this round as well. The company aims to create AI that can develop games and enhance gameplay through conversational AI and voice interactivity.

US-based web3 gaming company Studio 369 has raised $5m in a funding round led by Bitkraft Ventures, Delphi Digital, Sanctor Capital, and SpartanGroup, with participation from other investors. The studio is currently developing its first title, a web3 mecha MMO Metalcore. This investment will be used for further elaboration of the game.

France-based cloud gaming platform Gamestream has raised $4.9m (€4.5m) in a funding round from an undisclosed investor. The company plans to use the funds to expand its cloud gaming business operations.

US-based web3 gaming tech company Blockus has raised $4m in a pre-Seed funding round led by Altos Ventures, with participation from other investors. This round comes after participation in the a16z Crypto Startup Accelerator. The company’s platform helps gaming studios onboard players and build on-chain features for games easily. The investment will help increase growth, expand the team, enhance sales, and boost development.

Singapore-based web3 games developer 9 Lives Interactive has raised $3m in a funding round led by Mechanism Capital, with participation from Sfermion, 3Commas CapitalKosmos VenturesCSP DAO, and other investors. The investment will go towards developing the studio’s debut game, Nyan Heroes, a shooter that combines unique game mechanics with cat-inspired characters and blockchain technology aimed at mass adoption.

US-based games developer Roar Games has raised $1.5m in a funding round from The Games Fund. Founded by developers who have worked on titles like Dota 2 and PUBG, the studio is currently developing its debut third-person action title, Tenet of the Spark. The game features a mechanic that allows the player to jump between modern, Viking, and South American worlds.

Cyprus-based tech company Balancy has raised $0.7m in a funding round. This investment will be used to grow Balancy’s software-as-a-service (SaaS) opportunity and increase support for small and medium-sized studios to host and monetize live-service games. The company aims to help game studios effectively run and monetize live games.

Singapore-based web3 metaverse game developer BitRealms has raised an undisclosed sum in a pre-Seed funding round from Bitvalue CapitalBig Brain HoldingsNegentropy CapitalBsc Station, and Cogitent Ventures. The studio is developing an inscription-driven gaming system within the Bitcoin ecosystem. The investment will drive further development of the studio’s gaming platform.


South Korea-based Shift Up filled out an application for IPO on the Korea Stock Exchange. The company will offer 7.25m shares for sale during the initial public offering, valued at ~$0.15 (₩200) per share. The IPO will be led by Korea Investment & SecuritiesNH Investment & Securities, and Seoul-based JP Morgan Securities. The company is responsible for the release of the mobile game Goddess of Victory, as well as the development of Stellar Blade.

US-based web3 gaming and health tech company has announced a $3.5m private placement priced at the market under Nasdaq rules. The gross proceeds from the offering will be used for research and development, sales and marketing, as well as other general corporate purposes. specializes in artificial intelligence solutions for enhancing gaming experiences and aims to further innovate in this domain with the raised capital.

We want to thank MGVC, Taylor Wessing, and Xsolla for supporting this digest.

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