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Embracer’s acquisition spree takes it to top of European games business

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By Supantha Mukherjee

KARLSTAD, Sweden (Reuters) – In a quiet corner of the town of Karlstad, 300 kilometres from Stockholm, a Swedish entrepreneur has built Europe’s largest gaming company by market value – although most gamers have never likely heard of it.

Working out of an unassuming apartment building, Lars Wingefors’ Embracer Group, with a team of fewer than 20, has grown by acquisition. Its catalogue already includes games as diverse as survival game Valheim, racing game MX vs ATV, and Goat Simulator.

And Embracer, which has bought more than a dozen companies during the coronavirus pandemic alone, is not done yet, Wingefors told Reuters in a recent interview.

Many gaming companies prospered during the pandemic as people locked in their homes turned to their screens. Embracer did even better than most, with its market capitalization more than doubling in the last 12 months to over $11 billion, compared with $10 billion for France’s Ubisoft and $5 billion for Poland’s CD Projekt.

Since going public in 2016 at 20 krona per share, Embracer’s shares have climbed, reaching 260 krona by this week.

Wingefors attributes Embracer’s success to a unique model under which he allows founders to run their companies as independent businesses, or “verticals,” after they are acquired by Embracer, with full creative and operational freedom.

It’s an approach that could have broad appeal in the fast-changing, hit-driven gaming business – which, ironically, analysts cite as a risk for Embracer because too many imitators could push up the cost of acquisitions. Deep-pocketed companies such as Microsoft could be willing to pay a premium for gaming firms.

The decentralized structure can also make it difficult for the company to take on the biggest gaming projects and compete with the likes of Electronic Arts and Activision, according to analysts and gaming industry executives.

Still, Wingefors has done a good job incentivising the many studios to pull in the same direction, said Benjamin May, an analyst with Berenberg.

Embracer currently has eight verticals, and is looking to add at least two new ones every year.

“We are working on more deals than ever across all our verticals, and I still have billions left,” he said in an interview in his office, where the walls are adorned by large paintings, framed stock certificates of old Swedish companies and covers of comic book first editions.

“Right now we are busy trying to consolidate Europe, Russia, and starting to put our foot on the ground in Canada and North America.” COMICS TO GAMES

Wingefors started his first business at 13, buying and selling comic books. He learned the value and year of release of about 50,000 comic books printed in Sweden.

“It gave me a big advantage when buying comic books as I immediately could understand the value of each potential deal,” Wingefors said.

Soon he started selling used video games by mail order, eventually selling the business to British dotcom startup Gameplay for 8 million pounds in a stock deal in March 2000, at the height of the dotcom bubble.

He became part of the company’s European management, before moving on to found Nordic Games in 2008. The company listed on the secondary market in Stockholm in 2016 and rebranded itself as Embracer in 2019.

This year’s acquisitions included Gearbox, known for first person shooter Borderlands, in a deal valued at up to $1.36 billion.

“Lars has a very rare balance of intelligence, ambition and humility,” said Gearbox CEO Randy Pitchford, who said he was initially not interested in Embracer but changed his view after meeting Wingefors.

Embracer now has 193 game projects under development.

“We are expecting to complete 70 games projects in the next financial year and there are games costing at least $50 million in the pipeline,” Wingefors said.

Embracer’s deals usually include upfront cash, a stake in the company and milestone payments based on game releases. The company has raised money through share sales to fund the deals, including nearly $1 billion last month.

That model likely “decreases the risk of bad acquisitions compared to other M&A-intense gaming companies,” said Pareto Securities analyst Marlon Värnik.

Currently listed on Nasdaq First, Embracer hopes to list on the main bourses in the next few years.

“In the next five years to 10 years I want to build something substantially bigger than what we are today,” Wingefors said.

 

(Reporting by Supantha Mukherjee in Stockholm. Editing by Jonathan Weber and Rosalba O’Brien)

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French league’s legal board orders PSG to pay Kylian Mbappé 55 million euros of unpaid wages

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The French league’s legal commission has ordered Paris Saint-Germain to pay Kylian Mbappé the 55 million euros ($61 million) in unpaid wages that he claims he’s entitled to, the league said Thursday.

The league confirmed the decision to The Associated Press without more details, a day after the France superstar rejected a mediation offer by the commission in his dispute with his former club.

PSG officials and Mbappé’s representatives met in Paris on Wednesday after Mbappé asked the commission to get involved. Mbappé joined Real Madrid this summer on a free transfer.

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Reggie Bush was at his LA-area home when 3 male suspects attempted to break in

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LOS ANGELES (AP) — Former football star Reggie Bush was at his Encino home Tuesday night when three male suspects attempted to break in, the Los Angeles Times reported Wednesday.

“Everyone is safe,” Bush said in a text message to the newspaper.

The Los Angeles Police Dept. told the Times that a resident of the house reported hearing a window break and broken glass was found outside. Police said nothing was stolen and that three male suspects dressed in black were seen leaving the scene.

Bush starred at Southern California and in the NFL. The former running back was reinstated as the 2005 Heisman Trophy winner this year. He forfeited it in 2010 after USC was hit with sanctions partly related to Bush’s dealings with two aspiring sports marketers.

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B.C. Lions lean on versatile offence to continue win streak against Toronto Argonauts

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VANCOUVER – A fresh face has been gracing the B.C. Lions‘ highlight reels in recent weeks.

Midway through his second CFL campaign, wide receiver Ayden Eberhardt has contributed touchdowns in two consecutive games.

The 26-year-old wide receiver from Loveland, Colo., was the lone B.C. player to reel in a passing major in his team’s 37-23 victory over the league-leading Montreal Alouettes last Friday. The week before, he notched his first CFL touchdown in the Lions’ win over the Ottawa Redblacks.

“It’s been awesome. It’s been really good,” Eberhardt said of his recent play. “At the end of the day, the biggest stat to me is if we win. But who doesn’t love scoring?”

He’ll look to add to the tally Friday when the Leos (7-6) host the Toronto Argonauts.

Eberhardt signed with B.C. as a free agent in January 2023 and spent much of last season on the practice squad before cementing a role on the roster this year.

The six-foot-two, 195-pound University of Wyoming product has earned more opportunities in his second season, said Lions’ head coach and co-general manager Rick Campbell.

“He’s a super hard worker and very smart. He understands, has high football IQ, as we call it,” Campbell said.

The fact that Eberhardt can play virtually every receiving position helps.

“He could literally go into a game and we could throw him into a spot and he’d know exactly what he’s doing,” the coach said. “That allows him to play fast and earn the quarterback’s trust. And you see him making plays.”

Eberhardt credited his teammates, coaches and the rest of the Lions’ staff with helping him prepare for any situation he might face. They’ve all spent time teaching him the ins and outs of the Canadian game, or go over the playbook and run routes after practice, he said.

“I’ve played every single position on our offence in a game in the last two years, which is kind of crazy. But I love playing football,” he said. “I want to play any position that the team needs me to play.”

While B.C.’s lineup is studded with stars like running back William Stanback — who has a CFL-high 938 rushing yards — and wide receiver Justin McInnis — who leads the league in both receiving yards (1,074) and receiving TDs (seven) — versatility has been a critical part of the team’s back-to-back wins.

“I think we’ve got a lot of talented guys who deserve to get the ball and make big plays when they have the ball in their hands. So it’s really my job to get them the ball as much as possible,” said quarterback Nathan Rourke.

“I think that makes it easy when you can lean on those guys and, really, we’re in a situation where anyone can have a big game. And I think that’s a good place to be.”

Even with a talented lineup, the Lions face a tough test against an eager Argos side.

Toronto lost its second straight game Saturday when it dropped a 41-27 decision to Ottawa.

“We’ll have our hands full,” Rourke said. “We’ll have to adjust on the fly to whatever their game plan is. And no doubt, they’ll be ready to go so we’ll have to be as well.”

The two sides have already met once this season when the Argos handed the Lions a 35-27 loss in Toronto back on June 9.

A win on Friday would vault B.C. to the top of the West Division standings, over the 7-6 Winnipeg Blue Bombers who are on a bye week.

Collecting that victory isn’t assured, though, even with Toronto coming in on a two-game skid, Campbell said.

“They’ve hit a little bit of a rut, but they’re a really good team,” he said. “They’re very athletic. And you can really see (quarterback Chad Kelly’s) got zip on the ball. When you see him in there, he can make all the throws. So we’re expecting their best shot.”

TORONTO ARGONAUTS (6-6) AT B.C. LIONS (7-6)

Friday, B.C. Place

HOME FIELD ADVANTAGE: The Lions boast a 4-1 home record this season, including a 38-12 victory over the Redblacks at Royal Athletic Park in Victoria, B.C., on Aug. 31. The Argos have struggled outside of BMO Field and hold a 1-5 away record. Trips to the West Coast haven’t been easy for Toronto in recent years — since 2003, the club is 4-14 in road games against B.C.

CENTURION: B.C. defensive back Garry Peters is set to appear in his 100th consecutive game. The 32-year-old from Conyers, Ga., is a two-time CFL all-star who has amassed 381 defensive tackles, 19 special teams tackles and 16 interceptions over seven seasons. “Just being on the field with the guys every day, running around, talking trash back and forth, it keeps me young,” Peters said. “It makes me feel good, and my body doesn’t really feel it. I’ve been blessed to be able to play 100 straight.”

This report by The Canadian Press was first published Sept. 12, 2024.

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