Image via Gearbox.

Gearbox is reportedly ready to part ways with Embracer

Another one.

Gearbox Entertainment was one of the companies Embracer purchased during its massive buying spree that was followed by widespread layoffs and studio closures. As reported by Kotaku, the Borderlands maker is poised to be sold out, and more information will be shared next month.

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Embracer had purchased Gearbox for $1.3 billion in 2021. However, after purchasing studios from around the world, the Swedish company released an open letter explaining that it is aiming to become a “heavy-investment-mode to a highly cash-flow generative business,” and this will require “closing or divestments of some studios and the termination or pausing of some ongoing game development projects.”

This news doesn’t come out of the blue, as in 2023, a report from Reuters previously stated that Gearbox is working with Goldman Sachs and Aream & Co to explore a possible sale and that there is interest from third parties. Not long after, a Bloomberg report emerged that Gearbox is planning to either go independent or transfer.

It appears that we’ll find out more soon, as in a town hall with staff earlier this week, Gearbox CEO Randy Pitchford revealed that a decision had been made about the studio’s future, according to two of Kotaku’s sources. The studio’s employees haven’t escaped the barrage of layoffs across Embracer’s studios, and despite Pitchford assuring employees that they wouldn’t experience the same fate, dozens were let go, and those who were subjected to freezes on pay raises and hiring. One of Kotaku’s sources claims that they have been seeking employment elsewhere “not just due to the Embracer layoff fears, but due to pay.”

There appears to have been friction in the relationship between Embracer and Gearbox, as due to Embracer budget shortfalls, “the studio shelved work on some exciting new projects and IPs to focus primarily on the next Borderlands games which are published by 2K,” according to two of Kotaku’s sources. There are still projects in the works, including a Tiny Tina’s Wonderlands sequel, but the studio “lost senior people” due to feelings of uncertainty.

Gearbox won’t be the only studio squirming away from Embracer. According to Bloomberg, Saber Interactive is being sold to a private investment group. This comes during a year that has seen massive layoffs and studio closures, creating an uncertain environment for the entire industry.


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Smangaliso Simelane
Staff Writer - Smangaliso Simelane is a writer with a passion for all things related to video games. He has been writing about video games since 2020.