Sweden's Embracer sells two game studios, but keeps key rights

(Reuters) -Swedish video game group Embracer has divested Arc Games and Cryptic Studios, but kept several of their key rights, it said on Wednesday.

The game studios were sold to Project Golden Arc, which is financed by China's XD, Embracer said. It will keep the publishing rights for the Remnant franchise, while the rights for multiplayer online game Fellowship will be a part of Coffee Stain Group. Both these rights were previously held by Arc Games.

CONTEXT

Embracer is nearing the end of its sweeping restructuring plan it embarked on last year when it announced it would split into three listed companies. It spun off board game firm Asmodee in February and is set to spin off its independent studios under Coffee Stain Group on December 11.

WHY IT'S IMPORTANT

The gaming market, which got a boost during the COVID-19 pandemic, is facing slower growth as consumers rein in spending, which pressures companies to come up with new ways to exploit their existing intellectual properties.

KEY QUOTE

"This transaction supports our key priorities by strengthening our focus on strategic assets and core IPs in Embracer while improving profitability and free cash flow," CEO Phil Rogers said in a press release.

BY THE NUMBERS

Embracer expects to book net cash proceeds of 287 million Swedish crowns ($30 million) from the sale.

($1 = 9.5245 Swedish crowns)

(Reporting by Vera Dvorakova in Gdansk; editing by Milla Nissi-Prussak)

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