Embracer announces plan to split into 2 companies, as Tomb Raider and LoTR spun off

Embracer Group has announced its intention to split into two public companies, with a new spin-off taking over its biggest game IPs, including Tomb Raider.

Fellowship Entertainment is planned to be established in 2027 and will be an “IP-led” entertainment company built around the development, publishing, and licensing of games.

The new company will take over stewardship of The Lord of the Rings IP, and game franchises such as Tomb Raider, Darksiders, Dead Island, Kingdom Come Deliverance, Metro, and Remnant.

Studios joining the new company will include 4A Games, Crystal Dynamics, Dambuster Studios, Dark Horse Media, Eidos-Montréal, Fishlabs, Flying Wild Hog Studios, Gunfire Games, Middle-earth Enterprises, Redoctane Games, and Warhorse Studios.

Embracer will operate as “a natural home for proven entrepreneurs and creative talents, supported by a more efficient structure,” according to an announcement, and oversee IPs including Destroy All Humans!, Desperados, Gothic, Killing Floor, Kingdom of Amalur, MX vs. ATV, REANIMAL, Ride, Screamer, Titan Quest, and Wreckfest, as well as licenses such as Hot Wheels Unleashed and SpongeBob SquarePants.

Companies remaining with Emrbacer include Aspyr, Beamdog, CrazyLabs, Deca, Demiurge, DPI Merchandising, Limited Run Games, Milestone, PLAION Partners, PLAION Pictures, THQ Nordic (including 35 studios and subsidiaries), Tripwire and Vertigo Games.

According to an announcement, the split will allow Embracer more flexibility to pursue mergers and acquisitions, while Fellowship focuses on its studios and publishing efforts.

Embracer Group’s current CEO Phil Rogers and COO Lee Guinchard will transition to become the CEO and COO of Fellowship Entertainment, along with CFO Müge Bouillon. A recruitment process for a new CEO and CFO for Embracer has been initiated, the company said.

“This separation is about sharper management focus and clearer accountability, giving each business the structure and leadership to realize more of its full potential,” said Lars Wingefors, chair of the board of Embracer Group.

“I am truly excited about Fellowship Entertainment’s prospects to organically grow substantially over the coming years. I am equally optimistic about the potential of the deep portfolio and selective M&A opportunities for a more focused Embracer.”

Phil Rogers, CEO of Embracer Group, added: “Our direction is clear: to build a more disciplined group with two distinct businesses, each with a mandate and a structure that supports transparency and execution. I am confident that this is the right path forward to deliver long-term value for our fans, our businesses and IPs, our people, and our shareholders.”