Embracer announces split into two companies next year

Embracer Group plans to divide into two separate public companies, with Fellowship Entertainment taking major franchises including Lord of the Rings and Tomb Raider.

Embracer Group announced on May 20 that it will split into two legally distinct public companies next year. Fellowship Entertainment will control key intellectual properties such as The Lord of the Rings, Tomb Raider, Deus Ex, and Metro, along with studios including Eidos Montreal and Warhorse Studios. The new entity will also handle IP licensing to external partners.

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Illustration of Bobby Kotick alleging a lawsuit benefited Embracer over Activision acquisition by Microsoft.
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Bobby Kotick claims lawsuit aided Embracer over Activision

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Former Activision Blizzard CEO Bobby Kotick has alleged that a 2022 lawsuit against Microsoft's $67.8 billion acquisition of the company was filed to benefit competitor Embracer Group.

Microsoft cut 3200 jobs at Xbox on July 6 as part of the largest restructuring in the division's history. Half the reductions took effect immediately, with the rest scheduled through June 2027. Four studios are leaving the company through spin-offs or sales.

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Warhorse Studios has confirmed development of an open-world RPG set in Middle-earth. The studio also revealed work on a new Kingdom Come adventure. The announcements were made on X on May 20.

IO Interactive announced staffing cuts on June 30 after an external partner withdrew from its new IP Project Fantasy. The studio remains committed to releasing the game despite the change.

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Warhorse Studios, developers of Kingdom Come: Deliverance 2, remained coy about rumors of a Lord of the Rings RPG during a Reddit AMA on May 1. The session was overshadowed by fan questions about AI replacing a translator. The team confirmed work on a new huge immersive RPG but revealed no further details.

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