Embracer Group Forms a Fellowship

Embracer Group has acquired the rights to J.R. R. Tolkien’s Middle-earth IP, including the prize jewels of The Lord of the Rings and The Hobbit. This purchase from the ever-growing European conglomerate is the latest move in Embracer’s long-term trans-media strategy.

Rights to Rule Them All?
It’s a bit more complicated as to what exactly Embracer purchased, besides future video game titles.

  • It didn’t purchase games already in development or full-length movie rights.
  • Given the author’s family still owns publishing rights, it’s unclear to what extent Embracer will be able to leverage crossovers like comic book tie-ins

Appetite for Expansion
It’s no Microsoft purchasing Activision-Blizzard or Sony buying Bungie, but Embracer has been spending billions in a ravenous pursuit of IP and talent.

  • A trio of AAA developers in May (Crystal Dynamics, Eidos-Montreal, Square Enix Montreal)
  • Dark Horse Media in December 2021
  • Board game maker Asmodee in December 2021
  • AAA-developer Gearbox Software in February 2021

If there is a difference in Embracer’s buying spree compared to the ongoing consolidation in gaming, it’s that its goals are more long term. It’s not buying studios that turn out a big hit every year (Activision-Blizzard’s Call of Duty) or close to releasing a live service game (Bungie). Rather, it’s securing its share of a limited pool of game developers and the IPs that increasingly fuel entertainment.

A Cooling Market
Believe it or not, Embracer appears to have purchased these rights at a bargain. At most, it paid $788 million, and likely closer to half a billion. Compare this to the original asking price in February of at least $2 billion. Maybe romps through Middle Earth aren’t worth what they used to be, but it’s more likely that spending is decreasing as the gaming boom fades.

Featured Image: Courtesy of Embracer