Swedish video game holding company Embracer Group published its Q2 interim report for 2023 on the 16th of November. It showed that the company has experienced an increase in net sales of mobile titles. The first quarter went well with a 2% rise in net sales. The growth is driven by the well-performed strong IPs such as “Magic: The Gathering” and a trading card game “The Lord of the Rings: Tales of Middle-earth™”. As part of Middle-earth Enterprises’ long-term partnership with Wizards of the Coast, both titles were released in late Q1.
Two operative groups (DECA Games and Easybrain) currently run the mobile games segment for Embracer. The company has titles in vast genres including free-to-play, ad-centric, in-app-purchase-centric, and pay-to-play mobile games. Receiving a global acclamation from the fans, the company planned something big for the future.
Embracer Group CEO confirms the progress is stable, Q2 2023 will shape the future
The Co-founder & Group CEO, Lars Wingefors, said, “In Q2, we delivered a stable quarter. We continue to take important steps for the future and I am confident that we will emerge as a stronger company.” The net sales of the company grew by 13% to $1.2B. However, the mobile segments did not perform as per the expectations though a 2% rise is still visible on the graph. “The H2 outlook for the PC/Console and Mobile segments has however softened somewhat compared to our assessment in Q1. For Mobile, it relates to a slightly more conservative view on monetization and organic growth,” said the report.
The net sales growth is relatively at the lowest point as it is 13% this year while in the previous year, it was 190%. Though the total game developments hit a downfall, the overall net sales increased a lot. It indicates that the company is sticking to the titles that are providing quality and return profits. Instead of creating a mess of games, a few quality titles are sufficient to grab the industry at large, indeed a good initiative by Embracer Group.
The Mobile Games segment performed well in several determining sectors, growing the opportunity for FY 2024
The report from Embracer Group pointed to several key factors that will shape a sustainable and growing business to receive more profit and engage the community. To summarize the key points, here’s a quick look.
- Organic growth improved compared to Q1. This is driven by Crazy Labs as they shifted their genre focus toward hybrid casual games.
- Underlying market trends and monetization were largely stable in the quarter, and user acquisition investment grew compared to Q1.
- The strong IP portfolio played a key part in long-term strategy. 13% organic growth with an Adjusted EBIT margin of 16% became possible because of the strong licensing revenues to Middle-earth Enterprises for Magic: The Gathering and The Lord of the Rings: Tales of Middle-earth™.
Embracer commented on the mobile gaming market, saying that the industry is estimated at USD 92 billion (2022) and represents 50% of the global gaming market. The primary backdrop is privacy regulation and China’s slow approval process. Besides, “More casual mobile users are seemingly more affected by economic pressures than other gaming sectors,” said the Q2 2023 Interim Report of Embracer Group.
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