Games group Embracer beats profit expectations driven by back catalog (updated)
12/02/2026 09:19
Adds share move in paragraph 4, CEO comment on capex in paragraph 6 Feb 12 (Reuters) - Swedish video games group Embracer EMBRACb.ST, which recently split into three listed companies, reported a quarterly operating profit above analysts' estimates on Thursday, as it relies on back-catalog titles to drive earnings. CONTEXT The Tomb Raider owner recently finished its split into three companies after a failed acquisition spree. Its board game business began trading as Asmodee ASMDEEb.ST at the start of 2025, while its independent game studios became Coffee Stain Group COFFEEb.ST in December 2025. WHY IT'S IMPORTANT European video game groups are restructuring their operating models and game development processes. Embracer's French peer Ubisoft UBIP.PA is also splitting into five creative divisions based on specific game genres, it said in January, flagging several game cancellations and studio closures. SHARE REACTION Shares of Embracer rose 12% in early Stockholm trading, on track for their biggest one-day rise since March 2024 if the gains hold. KEY QUOTES "Our performance in the quarter was driven by strong execution across core IPs including Kingdom Come: Deliverance, Dead Island and Tomb Raider," CEO Phil Rogers said in the earnings statement. "We're really trying to focus more of our capex into ... what we call core IPs," Rogers told Reuters, saying the allocation of capital spending into key intellectual properties had already shifted from 20% to 40%, and Embracer expected to raise this share to up to 80% in the future. BY THE NUMBERS The gaming group reported an adjusted operating profit of 528 million Swedish crowns ($59.4 million) for its fiscal third quarter, well ahead of the 336 million crowns expected by analysts it had polled ahead of the release. WHAT'S NEXT Embracer expects to report an adjusted operating profit of at least 750 million crowns for the full year, compared to the previous guidance of at least 1 billion crowns, which had included now spun-off Coffee Stain. The group said the release date of "Gothic 1 Remake" would be moved to June 5. It was previously expected in the fourth quarter of the financial year that ends in March. ($1 = 8.8912 Swedish crowns) (Reporting by Vera Dvorakova in Gdansk; Editing by Milla Nissi-Prussak) ((vera.dvorakova@thomsonreuters.com))