Embracer’s net sales down as mobile profits dive and headcount plummets

• Embracer Group’s net sales were approximately $681.5 million in Q3
• Net sales for the full fiscal year thus far are roughly $1.6 billion

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Embracer Group’s net sales fell by 3% year-over-year in Q3 to SEK 7.4 billion ($681.5 million).

The company’s mobile catalogue generated SEK 1.7bn ($156.5m) in the quarter, a rise of 2% Y/Y. Mobile EBIT, meanwhile, declined by 34.5% Y/Y to SEK 400m ($36.7m).

Mobile’s organic 3% growth this Q3 marked a turnaround from its 7% Y/Y fall in Q2. The recent rise was partly attributed to subsidiary CrazyLabs’ “improved performance”, having taken over publishing rights for hybridcasual game Bus Frenzy – Traffic Jam.

Embracer expects investments into this title and others to drive higher user acquisition-to-sales with a positive ROI, foreseeing mobile being in “growth mode” through the first half of its next fiscal year.

Currently, Embracer’s mobile DAU and MAU are both down Y/Y with 26 million daily players on mobile and 210 million playing monthly in Q3. Compared to Q3 of FY2023/24, Embracer had 30 million daily active users and 236 million monthly. In Q3 of FY 2022/23, it had 34m DAUs and 283m MAUs.

At the same time, user acquisition costs have increased this year to 50% of net sales in Q3, versus 39% last Q3. This came to a total cost of SEK 840m ($77.9m) in the current Q3, compared to SEK 646m ($59.9m) in the same period last year.

It’s worth noting that Embracer sold mobile developer Easybrain to Miniclip for $1.2 billion in 2024.

As for this fiscal year so far, three-quarters complete, overall mobile sales are down 3% Y/Y.

Platform sales

Revenue for Embracer’s PC and console games fell 23% Y/Y to SEK 2.6bn ($239.6m).

The publisher’s entertainment and services category increased its sales, meanwhile, up 19% Y/Y to SEK 3.1bn ($285.8m) in Q3. The division ranked as Embracer’s most lucrative category of Q3 this fiscal year. Last Q3, PC and console games were on top at approximately SEK 3.4bn ($313.3m).

Net sales across all categories were almost SEK 17bn ($1.6bn) over the first nine months of the year. This marked a 22% decline from SEK 21.7bn ($2bn) in the first three quarters of FY2023/24.

Adjusted EBIT also fell from SEK 3.9bn ($360.3m) to SEK 2.3bn ($212.5m).

Fewer devs but plenty of games

Notably, Embracer’s number of development staff has also fallen considerably, having almost halved in the past year from 9,896 devs in December 2023 to just 5,757 as of December 31st, 2024. Total headcount has fallen from 12,695 to 7,873 over the same period.

This Q3, Embracer span-off the Asmodee Group as a separate public entity, taking the tabletop publishing and distribution business, and the bulk of Embracer’s $1.5bn debt.

“The spin-off of Asmodee has been successfully completed and the separately listed company is now trading on Nasdaq Stockholm,” said Embracer Group CEO Lars Wingefors.

“We are excited about our future and our current games pipeline which we believe is one of the most well invested in the industry. We currently have more than 5,000 game developers working on our pipeline of upcoming games.”

Wingefors confirmed that 10 ‘triple-A’ games are currently in development for launch over the next three financial years, not including any titles still due in the current year’s Q4. Eight titles are being developed internally and two externally.