It's a day ending in 'y' so you know what that means: Embracer Group is doing more restructuring

Embracer Group is undergoing yet another restructuring of its gigantic operations, this time announcing plans to spin-off the Coffee Stain part of the business as well as renaming the Lord of the Rings portion.

In 2024, Embracer announced it would split into three distinct companies across games. Asmodee handled tabletop and physical games; Coffee Stain managed indies and free-to-play titles; Middle-Earth & Friends took charge of the Lord of the Rings and other major licenses.

Now, Coffee Stain will become "a standalone group of community-driven game developers and publishers by the end of calendar year 2025." It's slightly unclear how this differs from last year's restructuring, but Coffee Stain manages somewhere in the region of 250 game developers and publishers worldwide, including the likes of Ghost Ship Games (Deep Rock Galactic) and Tuxedo Labs (Teardown).

"We're really proud of everything we've built as part of Embracer," says Coffee Stain CEO Anton Westbergh. "The games industry is more competitive than ever, but also more rewarding if you do things right, and we believe this move gives us the clarity and control to navigate the landscape better on our own terms."

"Coffee Stain Group has incredible talent, IPs and communities," says Group CEO of Embracer Lars Wingefors. "To date, it has been a true recipe for success. I am confident in Anton's strategy and leadership and see a clear long-term opportunity in attracting and enabling partnerships with like-minded independent game developers and talents."

As for the Middle-Earth & Friends side, not much is changing apart from the name. It'll now be known as Fellowship Entertainment, which I have to admit is a lot better, and "the strategy is to transform into one powerhouse group with game development and publishing at its core."

The press release also gives an idea of the dizzying scale Embracer is operating at. Fellowship Entertainment will have "approximately 6,000 employees across more than 30 countries" and will manage the commercial rights to J.R.R. Tolkien’s The Hobbit and The Lord of the Rings.

Fellowship Entertainment consists of more than 40 studios like 4A Games, Aspyr Media, Crystal Dynamics, Dark Horse, Eidos-Montréal, Limited Run Games, Middle-earth Enterprises, Milestone, PLAION, Tarsier Studios, and THQ Nordic. It also controls more than 300 other properties including the likes of Kingdom Come Deliverance, Metro, Dead Island, Killing Floor, Darksiders, Remnant and Tomb Raider.

Whatever else is going on in the name of restructuring, however, one figure remains at the core of all these companies. A note at the bottom of the press release says "the largest shareholder, Lars Wingefors AB, will, in connection with the name change to Fellowship Entertainment, establish a privately held holding company" named Embracer AB. It will have shares in Asmodee Group, Coffee Stain Group and Fellowship Entertainment, as well as "potentially other companies."

Embracer's role within the industry over recent years was described in a GDC survey in 2024 as "buying up large swaths of an industry" and "creating redundancies and placing innovative, more 'exploratory' studios in a position where they’ll never be seen as profitable enough for shareholders." In an industry where layoffs and studio closures are sadly commonplace, Embracer has been responsible for a significant chunk.

"As a leader and an owner, sometimes you need to take the blame and you need to be humble about if you've made mistakes and if you could have done something differently," said Wingefors in 2024, adding he's "sure I deserve a lot of criticism." But you know what really matters?

"I still feel I have the trust from many or all of my key entrepreneurs and CEOs that have joined the group," said Wingefors. "It's been difficult, but I think they all believed in the mission of Embracer."