Embracer Breaks Into Two Firms, Creates Fellowship Entertainment for Tomb Raider, ToLR, and More

Embracer Group has announced a major corporate restructuring plan that will see it split into two separate publicly traded companies, with its biggest and most valuable IPs, including Tomb Raider and The Lord of the Rings, being spun off into a new entity called Fellowship Entertainment.

The new company is expected to be established in 2027 and will operate as an “IP-led” business focused on game development, publishing, and licensing across some of the industry’s most recognisable franchises.

Fellowship Entertainment will manage Embracer’s biggest franchises

Under the planned split, Fellowship Entertainment will take control of several major intellectual properties and studios. This includes not only Tomb Raider and The Lord of the Rings, but also franchises such as Metro Exodus, Dead Island 2, Kingdom Come: Deliverance, Darksiders, and Remnant II.

The new structure is designed to centralise the management of these high-profile franchises under a single operational strategy, allowing for more focused development and licensing decisions.

Studios joining Fellowship Entertainment will include major names such as Crystal Dynamics, Eidos-Montréal, 4A Games, Warhorse Studios, Dambuster Studios, and Gunfire Games, among others.

Embracer to remain a decentralised holding structure

The remaining portion of Embracer Group will continue operating as a decentralised parent company overseeing a broader portfolio of smaller or mid-tier IPs and studios.

This includes franchises such as Gothic, Titan Quest, Kingdoms of Amalur, Wreckfest, and various licensed properties like SpongeBob SquarePants and Hot Wheels Unleashed.

Studios remaining under Embracer’s control include THQ Nordic’s extensive internal network, Aspyr, Limited Run Games, Saber Interactive spin-offs, and several mobile and publishing-focused divisions.

A response to years of restructuring and acquisitions

The announcement comes after a turbulent period for Embracer Group, which previously expanded rapidly through aggressive acquisitions across the global games industry. That expansion was followed by a major restructuring phase, including layoffs and studio closures as the company adjusted its financial strategy.

The group confirmed earlier in the same quarter that around 900 employees had been let go as part of its ongoing cost-cutting and organisational realignment.

According to Embracer leadership, the split is intended to increase operational focus and unlock the long-term value of its strongest IPs by separating high-value franchises from its broader portfolio.

Leadership changes and long-term strategy

Current Embracer executives, including CEO Phil Rogers and COO Lee Guinchard, will transition into leadership roles at Fellowship Entertainment once the spin-off is completed. A search is currently underway for new leadership roles within the remaining Embracer structure.

Chairman Lars Wingefors stated that the decision is aimed at improving strategic clarity and allowing each company to better capitalise on its respective strengths.

He emphasised that Fellowship Entertainment’s portfolio contains some of the most valuable and underutilised IPs in the industry, with the potential for strong long-term growth once operating independently.

What this means for major gaming franchises

The split effectively separates Embracer’s most globally recognisable franchises from its wider business operations. This includes flagship properties like Tomb Raider and The Lord of the Rings, which will now sit alongside other major RPG and action franchises under Fellowship Entertainment’s umbrella.

For studios such as Warhorse Studios and Crystal Dynamics, the restructuring could mean more focused publishing support and clearer franchise direction, though it also places higher expectations on the performance of these key IPs.

A new phase for Embracer Group

Once completed, the split will mark one of the most significant structural changes in modern games industry publishing. Embracer Group will continue as a diversified holding company, while Fellowship Entertainment positions itself as a high-profile IP powerhouse built around some of gaming’s most valuable franchises.

While the full impact of the restructuring will only become clear over time, the move signals a decisive shift away from Embracer’s previous acquisition-heavy strategy toward a more focused, franchise-driven model for both companies.