Flagging megacorp Embracer Group is now selling off Gearbox Entertainment to Take-Two for $460 million

Borderlands 3
(Image credit: Gearbox Software)

Swedish games behemoth Embracer Group bought Gearbox for $1.3 billion back in 2021. Just over three years later, Embracer Group is divesting Gearbox Entertainment to 2K Games and Rockstar parent company Take-Two Entertainment for $460 million. The acquisition is expected to finalize by the end of June.

Embracer will retain one piece of the Gearbox pie however, in the form of Gearbox Publishing San Francisco, which holds publishing rights to the Remnant series and Hyper Light Breaker, in addition to "other notable unannounced game releases". The remaining arm of the business will be renamed.

Embracer Group has been ruthlessly downsizing to stay afloat, after years of seemingly monthly studio and publisher acquisitions. It sold off Saber Interactive last month to the tune of $247 million, and laid off around 1,400 people in 2023. Last year it shut Saints Row studio Volition and Square Enix Montreal, to name just a small handful of its big contractions. Rumors that Gearbox was on the out started as far back as September last year.

Embracer's recent doom and gloom is in stark contrast to 2021-22: those were the days when the company was making huge acquisitions ranging Lord of the Rings through to some of Square Enix's former tentpole western studios, and receiving big investments from Saudi Arabia. But following the collapse of a $2 billion deal in 2023, which prompted an immediate and "comprehensive" restructuring of the business, most of the studios brought under the Embracer Group umbrella have suffered to one extent or another. Needless to say, a hell of a lot must have rested on that deal.

"Today’s announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow," Embracer CEO Lars Wingefors said in a prepared statement. "Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company."

Gearbox founder and Randy Pitchford had his say as well: "As a significant long-term Embracer Group shareholder, I believe in the strategy for the Embracer Group going forward and am completely convinced that this transaction is the best possible scenario and an obvious net positive arrangement for Embracer Group, for Take-Two and, of course, for Gearbox Entertainment. My primary interest is always Gearbox, especially our talent and our customers. I want to personally assure fans of our games that this arrangement will ensure that the experiences we have in development at Gearbox will be the best they can possibly be.”

Two-Two CEO Strauss Zelnick also indicated in his own prepared statement that these corporate machinations are for the greater good. Gearbox will fall under the 2K umbrella as a studio, presumably with a focus on Borderlands games, which 2K has published since the series started in 2009. For its $460 million, Take-Two also gets other Gearbox IP including Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem.

Shaun Prescott

Shaun Prescott is the Australian editor of PC Gamer. With over ten years experience covering the games industry, his work has appeared on GamesRadar+, TechRadar, The Guardian, PLAY Magazine, the Sydney Morning Herald, and more. Specific interests include indie games, obscure Metroidvanias, speedrunning, experimental games and FPSs. He thinks Lulu by Metallica and Lou Reed is an all-time classic that will receive its due critical reappraisal one day.