Embracer today without Coffee Stain for sale at the same valuation levels as in the early days after THQ’s bankruptcy.
The company has evolved since those days.
- Lower risk profile
- Stronger balance sheet
- IP reserve multiplied
- Cash flow sources
- Broader Aaa/aa development pipeline
- Management team has bought a significant amount of its shares.
But we don’t yet know the exact final form of the Fellowship, or upcoming AAA games. One can only throw out some guesses (Dead Island 3, Remnant, Warhorse’s new IP, some Lotr project).
But Embracer/Fellowship still has to prove to the market that it is a competitive company offering an interesting selection. So there are also red flags…
- Many games have been postponed this year, which makes achieving the 3.1 ROI targets difficult
- We still don’t know the final form of the Fellowship
- The AA segment has been weak. KCD2 (Kingdom Come: Deliverance 2) gets a lot of attention and nominations this year, but the weak sales of AA games eat up a lot.
- Many ambiguities regarding the activities of different studios. Eidos seems to be falling apart…
- 4A Games, which makes Metro, the game seems to have been delayed until 2027.
Investor confidence requires concrete evidence, and I will watch the next Game Awards with interest…