AN AUDIENCE WITH…

Embracer’s CEO explains the story behind the company’s explosive expansion

BY ALEX SPENCER

Only a year or two ago, Embracer wasn’t a name familiar to many videogame followers – most likely because the company’s only gone by that name since 2019, when it rebranded from THQ Nordic – but it’s long been one of the biggest, if quietest, players in the industry. At latest count, it has 222 games in development across 127 internal studios, and a headcount of 14,800 employees.

But if once we could have characterised Embracer as a hidden leviathan, the past year has put an end to that, thanks to a series of high-profile acquisitions. In that time, it’s bought up the western operations of Square Enix, along with the rights to Tomb Raider, Deus Ex and Thief, alongside a host of smaller developers, from Killing Floor creator Tripwire to Teardown micro-dev Tuxedo Labs. That’s been bolstered with a number of acquisitions outside of videogames, beginning with boardgaming giant Asmodee for a sum of €2.75bn, and the following week Dark Horse, publisher of Hellboy, Sin City, Umbrella Academy and many other wellknown comics. But perhaps the biggest surprise of all was saved for this August, as it scooped up Middle-Earth Enterprises, the rights holder for Lord Of The Rings and The Hobbit, as part of a £500m bundle of acquisitions announced all at once.

While this all-you-can-eat approach to M&A has been discussed at length in the usual industry hangouts, Embracer itself remains somewhat enigmatic. Here, CEO Lars Wingefors digs into some of the thinking behind those acquisitions, as well as the 50,000-strong videogame archive the company has been building at its headquarters in Karlstad, Sweden. It’s a perhaps appropriately off-the-beaten-track location for the business, and Wingefors’ home since he moved there as a young businessman in the early ’90s. By which point, as he explains here, he was already a good few years into his life as an entrepreneur.

You founded your first videogame company as a teenager, but that wasn’t your first business, right? Where did everything actually begin?

Well, I printed my first mail-order catalogue at age 13, so I guess that’s when I started doing business.

I started out collecting comics. I went to flea markets, I went to auctions, with a neighbour where I grew up, an older man, and he just got me into this idea that you can find things cheap and there is value in them. So I got my hands on one of those catalogues where you can see details of the most valuable comic books, and that’s kind of how it all started.

Growing up in the countryside, my mother and father had been divorced for many years, so we didn’t really have a lot of money. So money meant freedom – freedom to buy clothes, to do the things you’d like to do.

And are we essentially talking about pocket money, or something more significant? How much did it change over time?

I contacted one of the main mail-order companies and was able to acquire 2,000 names of customers, so I got quite a good customer base early. I got a business partner after a year, because I was visiting comic book shops every weekend, and after a year, he asked me: ‘Who are you? Why are you buying all these comics?’ He proposed to me: why don’t we do this together? And by doing that, I could expand my inventory. This was 30 years ago – ’91, ’92, ’93. I think we were quite well recognised by year three, and our turnover was perhaps 30, 40, 50,000 dollars.

And then I started experimenting with things other than comic books: movie posters, vinyl records, products for school classes – and videogames. I started to advertise in newly printed comic books that were on sale, and the publisher of those comics started a videogame magazine called Super Power in the summer of ’93. They contacted me: ‘OK, do you want to put some adverts in here?’ And, rather than comic books, I took my business partner’s inventory of used NES games and advertised that. I was just amazed by the feedback – we had thousands of orders coming in, and I just thought, wow, this is a great market.

I decided that videogames was a much better industry, so I sold my whole inventory of comic books. It was a truck full of… I can’t remember exactly but perhaps 50,000 comic books. You know, I was just turning 16, and I was supposed to move from my mother’s house to Karlstad, where I’m living now, to start high school. I decided to quit school, because the business just took too much time. I was thinking that I might come back in a year if it didn’t work out. Obviously, it worked out. And since then, I’ve been working in games.