Is Embracer Group profitable in 2026?

Embracer posted adjusted EBIT of SEK 905 million for FY2025/26 (year ended March 31, 2026), but reported profit was hit by a SEK 7.2 billion non-cash goodwill impairment and net sales fell 25% year over year to SEK 15,906 million, as of May 22, 2026.

Who owns Embracer Group?

Embracer Group is publicly listed on Nasdaq Stockholm as EMBRAC B. Founder Lars Wingefors, through his holding vehicle Lars Wingefors AB, remains the largest shareholder with roughly 20.4% of capital as of March 2026.

Could AI replace Embracer Group's game studios?

No. CEO Phil Rogers stated on September 24, 2025 that human authorship is final and AI is a co-pilot, not the pilot. Embracer's moat is legally locked IP like Tolkien's Middle-earth and Tomb Raider, which AI tools cannot substitute.

Is Embracer Group laying off staff in 2026?

Embracer cut roughly 8,000 jobs and closed or divested 44 studios during 2023 to 2024 restructuring. Divestitures continued into 2026, including 34BigThings in April 2026, following Lost Boys Interactive in December 2025 and Cryptic Studios in November 2025.

What is Embracer Group's biggest competitor?

Ubisoft is the closest structural peer, having spun off its own IP-focused publisher, Vantage Games, shortly before Embracer announced the Fellowship Entertainment spin-off on May 20, 2026. Take-Two Interactive is also frequently cited as a rival publisher.

Why is Embracer Group splitting into pieces?

After a $2 billion Saudi PIF investment deal collapsed in 2023, Embracer restructured heavily and spun off Asmodee in February 2025 and Coffee Stain Group in December 2025. It announced a further Fellowship Entertainment spin-off on May 20, 2026, targeting a 2027 listing.

Gaming companies · Sweden

Embracer Group

embracer.com ↗

Swedish holding company breaking itself into pieces, owns Tomb Raider, Metro, Lord of the Rings games.

Losing its protection

Assessed 23 July 2026 · Evidence as of 23 July 2026

The structural protection is eroding.

On the recordSince 23 July 2026 · Checkable from 2027 · Every call on the record Checkpoint: Fellowship Entertainment shareholder vote and targeted Nasdaq Stockholm listing

The call

The IP is strong, the holding company is not: Embracer is splitting into Fellowship Entertainment and a leftover entity with no CEO yet named.

Embracer Group owns famous game franchises like Lord of the Rings, Tomb Raider, and Metro, which are hard for rivals like Microsoft or Sony to simply buy or copy because the rights are legally locked down. However, the company itself is being forced to split into pieces after losing a 2 billion dollar investment deal, laying off 8,000 people, and losing its top three leaders to one of the new companies being created. The biggest question is whether the leftover Embracer company (with the weaker games and no management) can survive on its own, and what the stock split actually looks like when it finally happens in 2027.

Why

AI pressure: None apparent. AI tools help studios like Crystal Dynamics build games faster, but the bigger threat here is the demerger itself, not AI. Could AI do the core job? Unlikely.

Bigger players: None apparent. No single big tech rival is circling. The danger is self-inflicted: a forced three-way corporate split after a Saudi PIF deal collapsed. Could a giant copy it? No, they are blocked.

What protects it. Legally locked IP like Lord of the Rings and Tomb Raider stays valuable no matter which entity ends up holding it.

What would change this call

Embracer names a new CEO/CFO for residual Embracer by end of 2026. Shows leadership stability outside the Fellowship spin-off.
Fellowship Entertainment shareholder vote and Nasdaq Stockholm listing occur within calendar 2027. Confirms the split executes on schedule as planned.
Additional studio divestments beyond 34BigThings, Lost Boys, and Cryptic Studios are announced. Indicates continued shrinkage of residual Embracer's asset quality.

Key numbers

Net sales down 25% to SEK 15.9bn (FY2025/26 (Mar 2026))
SEK 7.2bn non-cash impairment booked (May 2026)
Stock fell from SEK 128 to SEK 66 (2026)

Named risks

Residual Embracer entity has no confirmed CEO or CFO after leadership moves to Fellowship. Severity: high
Fellowship Entertainment spin-off requires shareholder approval and could delay beyond 2027 target. Severity: high
Recurring non-cash impairments, SEK 7.2 billion booked in FY2025/26 alone. Severity: medium
Continued studio divestitures signal ongoing portfolio shrinkage, e.g. 34BigThings April 2026. Severity: medium
Negative Cash EBIT guided for Q1 FY2026/27 during split transition. Severity: medium

Rivals, as read in July 2026

Rival	Direction	Evidence
Ubisoft	contesting	Ubisoft spun off IP publisher Vantage Games shortly before Embracer's Fellowship announcement, May 2026
Take-Two Interactive	contesting	Cited as top rival publisher amid Embracer's shrinking revenue base, 2026
Asmodee Group	losing to	Former Embracer unit now independently listed and outside its portfolio since February 2025
Coffee Stain Group	losing to	Former Embracer unit spun off with $616m market cap, December 2025, no longer contributing revenue

Questions people ask

Is Embracer Group profitable in 2026?: Embracer posted adjusted EBIT of SEK 905 million for FY2025/26 (year ended March 31, 2026), but reported profit was hit by a SEK 7.2 billion non-cash goodwill impairment and net sales fell 25% year over year to SEK 15,906 million, as of May 22, 2026.
Who owns Embracer Group?: Embracer Group is publicly listed on Nasdaq Stockholm as EMBRAC B. Founder Lars Wingefors, through his holding vehicle Lars Wingefors AB, remains the largest shareholder with roughly 20.4% of capital as of March 2026.
Could AI replace Embracer Group's game studios?: No. CEO Phil Rogers stated on September 24, 2025 that human authorship is final and AI is a co-pilot, not the pilot. Embracer's moat is legally locked IP like Tolkien's Middle-earth and Tomb Raider, which AI tools cannot substitute.
Is Embracer Group laying off staff in 2026?: Embracer cut roughly 8,000 jobs and closed or divested 44 studios during 2023 to 2024 restructuring. Divestitures continued into 2026, including 34BigThings in April 2026, following Lost Boys Interactive in December 2025 and Cryptic Studios in November 2025.
What is Embracer Group's biggest competitor?: Ubisoft is the closest structural peer, having spun off its own IP-focused publisher, Vantage Games, shortly before Embracer announced the Fellowship Entertainment spin-off on May 20, 2026. Take-Two Interactive is also frequently cited as a rival publisher.
Why is Embracer Group splitting into pieces?: After a $2 billion Saudi PIF investment deal collapsed in 2023, Embracer restructured heavily and spun off Asmodee in February 2025 and Coffee Stain Group in December 2025. It announced a further Fellowship Entertainment spin-off on May 20, 2026, targeting a 2027 listing.

Timeline

2026-05-22FY2025/26 results: net sales SEK 15,906m, down 25% YoY, SEK 7.2bn impairment booked
2026-05-20Embracer announces Fellowship Entertainment spin-off carrying Tomb Raider, Lord of the Rings, Metro IP
2025-12-11Coffee Stain Group begins trading on Nasdaq First North, IPO market cap ~$616m
2025-09-24CEO Phil Rogers states human authorship is final, AI is a co-pilot not the pilot
2025-08-01Phil Rogers becomes CEO, replacing Lars Wingefors
2025-02-07Asmodee begins independent trading on Nasdaq Stockholm, taking on ~900m euros new debt
2024-04-23Embracer announces intention to split into three standalone listed entities
2023-01Roughly $2 billion Savvy Games Group Saudi PIF investment deal collapses

Revision history

23 July 2026

First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.

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