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How a Small Video Game Retailer Became a Global Publishing Powerhouse

From humble retail to 81 studios and more than 8,500 employees

The video game industry has traditionally been dominated by big publishers like Square Enix, Capcom, EA, and Ubisoft, alongside the three big platform holders: Nintendo, PlayStation, and Xbox.

But in recent years, a new face has emerged. While not quite in the same discussion as the aforementioned powerhouses, this company from the smiling sun city of Karlstad, Sweden, has risen through the ranks. One studio at a time.

This is the story of Embracer Group, and how it went from a small video game retail chain to a European juggernaut with 81 studios, over 240 franchises, and more than 8,500 employees underneath 8 publishing subsidiaries.

Screenshot taken by the author. Source: embracer.com.

Boyhood Days

Swedish billionaire Lars Wingefors started early. At the age of 9, he began selling seeds and newspapers. Four years later, he was selling second-hand comic books, through the ingenious plan of using a mailing list from a mail-order company that had shut its doors. Success arrived fast, and within two years, young Lars was running the country’s largest mail-order business.

Lars Wingefors. Source: gamesindustry.biz

But he wouldn't stop there. 1993 saw him start a new enterprise, this time to sell second-hand video games. The company was an even bigger success than his past outings, and four years later, Lars dropped out of high school. His video game retailer was selling $10 million every year.

By the tail end of the 1990s, the company was suffering from poor management and structure. In early 2000, the retail chain was sold to pan-European retailer Gameplay. A failed rejuvenation under new ownership led to financial troubles for the company, which was eventually sold back to Lars in 2001.

But a reunion with its founder wasn't enough to salvage the sinking ship. The company filed for bankruptcy in 2004 and shut down. The original Nordic Games was no more.

Coming of Age

In popular sitcom ‘The Office’, Michael Scott says in regards to his newly founded paper company, “if tomorrow my company goes under, I will just start another paper company and then another and then another and then another.” “I have no shortage of company names.”

And this is precisely what Lars did.

With his remaining funds, Wingefors started a new venture, reeling in potential customers as investors. The new company, called Game Outlet Europe, bought unsold stock from larger game publishers and then resold them on the market.

In 2008, the new Nordic Games was formed, this time as a subsidiary specialising in video game publishing under the previously formed Game Outlet Europe. Their first game was Dance Party Club Hits, a dancing game with came bundled with a dancing mat. 2009 saw the company publish We Sing, a karaoke singing game for the Wii. It was developed as a Nintendo-platform alternative to PlayStation’s exclusive Sing Star series.

The game sold well and Nordic Games was already in the fast lane. In 2011, Nordic Games Holding was created, and the two aforementioned companies were drafted underneath it.

Spreading Its Wings

In 2011, an Austrian video game publisher by the name of JoWooD Entertainment filed for bankruptcy. Nordic Games swept in and acquired all the companies assets, IPs, and licenses. It was their first major purchase, but there was more to come.

8,500 kilometres away and 21 years prior to this buyout, a small company was forming in Agoura Hills, California. Taking its first steps with toys, and then moving on to video games, THQ would go on to become the renowned publisher behind beloved franchises such as Darksiders, Destroy All Humans!, and Saints Row.

But a troubled start to the 2010s was plagued by financial woes from failed releases. On 19th December 2012, THQ filed for bankruptcy. Auctioning off the now-shuttered company’s IP and licenses began in early 2013. Some notables sales include the Homefront franchise to Crytek, rights to make Warhammer 40,000 video games to SEGA, and the Metro franchise to Koch Media.

Most notably, the bulk of THQ’s IP was sold to Lars’ Nordic Games. In 2014, they would go on to acquire the trademark to the ‘THQ’ name, and in 2016, the company was rebranded to what we have come to know it as today: THQ Nordic.

Source: linkedin.com/company/thqn.

This was a significant acquisition for the growing Swedish company as it began to put its name on the market. With a vast slate of IP under its belt, the potential was infinite.

In the same year as their rebranding, the company went public on the stock market, with founder Lars Wingefors retaining 50% ownership.

Embracing Growth

From 2018 to the present, the company underwent a massive expansion and restructuring. In early 2018, THQ Nordic acquired Austrian company Koch Media Holding, the parent company of Koch Media, for €121 million. This included Koch Media’s internal video game publishing label called Deep Silver.

Later that same year, they would go on to acquire Coffee Stain Holding, the Swedish parent company of Coffee Stain Studios, for 317 million Swedish Krona. Both these publishers would act as second and third arms of the larger group, and act independently to THQ Nordic’s own publishing arm.

Source: Embracer Group.

To avoid confusion between THQ Nordic the parent company, and its similarly titled publishing arm, a rebranding took place. In 2019, THQ Nordic was renamed to Embracer Group, while its publishing arm kept the THQ Nordic name.

In that same year but prior to the rebranding, the company had acquired video game investment company Goodbye Kansas Game Invest (GKGI) for 42.4 million Swedish Krona. In January 2020, GKGI was renamed Amplifier Game Invest.

Smaller random studio acquisitions continued until in February 2020, Embracer Group announced the purchase of American video game publisher Saber Interactive and its various internal studios for a whopping $525 million (US).

The chequebook came out again in August, as the rapidly growing company bought even more studios. These studios were dispersed amongst Embracer’s various subsidiaries, with Saber Interactive arguably getting the pick of the crop with Metro developer 4A Games. This set of acquisitions included a brand new publishing subsidiary in the form of DECA Games.

By the end of 2020, the Embracer Group held 6 video game publishing subsidiaries: THQ Nordic, Koch Media, Coffee Stain, Amplifier, Saber Interactive, and DECA.

A pretty good year for Embracer, global pandemic considered.

More of the Same

If you thought a new year might slow down the transactions over at Embracer HQ in Karlstad, Sweden, then oh boy were you wrong.

February 2021 saw 3 more massive deals take place. Embracer caught their biggest fish yet, by acquiring the Gearbox Entertainment Company for 1.3 billion US Dollars. This deal sees Borderlands developer Gearbox Software join the Embracer ranks.

Source: PlayStation.

Embracer also scooped up mobile game publisher EasyBrain for 640 million US Dollars and developer Aspyr Media for 450 million US Dollars. While Gearbox and EasyBrain will form Embracer’s 7th and 8th publishing subsidiaries, Aspyr will be integrated under Saber Interactive.

Embracer would go on to buy 15 more studios by September 2021.

A Bright Future

Source: Embracer Group Annual Report 2020/21

The future looks bright for Embracer Group.

During the 2021 financial year, the group made net sales of around 9,000 million Swedish Krona. Their annual report states that this is down to ‘numerous successful launches of high-quality games’, but also a ‘solid back catalogue’.

These standout commercial performances include ‘more than 6.8 million copies of Valhiem’, ‘close to 2 million copies of SnowRunner’, ‘more than 2 million copies of Sponge-bob Squarepants: Battle for Bikini Bottom Re-Hydrated’, and ‘more than 1 million copies of Destroy All Humans!’ remake sold.

Moreover, Embracer Group also saw an all-time high of 160 ongoing development projects at the end of the financial year.

They’ve quietly and confidently amassed a huge catalogue of IP and studios, that dwarf the likes of everyone else. With a focus on AA games, Embracer is able to conquer its own slice of the video game market, while still dipping its toes into the AAA pool alongside other industry titans.

And it doesn't look like they are letting up any time soon, with acquisition after acquisition sending tremors throughout the industry. There is a new formidable force in town, and it shouldn't be taken lightly.

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Nandan Patil

Nandan Patil

Writing about videogames at platyview.com. Contributor to SUPERJUMP Magazine.

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