Swedish gaming conglomerate and Lord of the Rings owner Embracer Group has announced its intention to split into three separate public companies: Middle-earth Enterprises & Friends, Coffee Stain & Friends and Asmodee Group. 

Embracer board chair Kicki Wallje-Lund says the restructure was proposed by executive management and the board as a mechanism for focusing on core strategies more effectively and unlocking more value from the business. Shares in Coffee Stain and Asmodee will be distributed as dividends to the company’s existing shareholders, and Embracer Group will be rebranded as Middle-earth Enterprises & Friends at a later date.  

Once that happens, Middle-earth Enterprises will focus on AAA-budget game development (a category that starts at US$50 million), as well as overseeing The Lord of the Rings and Tomb Raider franchises. And Coffee Stain will be tasked with developing new free-to-play and low-budget video games for PC, home consoles and mobile platforms. 

Meanwhile, global board game publisher Asmodee has entered into a financing agreement with JP Morgan, BNP Paribas, SEB, Societe General and Swedbank that’s valued at US$963 million. Secured against Asmodee’s assets, this will de-leverage Embracer’s existing US$733-million loan and free up cash flow. 

This restructure comes a month after Embracer sold off two of its games studios. Take-Two Interactive acquired Gearbox Entertainment (Borderlands game franchise) for US$460 million, and Saber Interactive’s co-founder Matthew Karch bought it back for US$247 million under his new Beacon Interactive umbrella. Embracer originally acquired Saber in 2020 for US$525 million and later purchased Gearbox in 2021 for US$1.3 billion. 

Photo of The Lord of the Rings: Tales of Middle-earth courtesy of Wizards of the Coast