Embracer attempts to recalibrate after mass layoffs and multiple studio shutdowns.

Embracer’s cycle of acquisitions and divestments continued today as the Swedish conglomerate announced it will sell Arc Games and Cryptic Studios, in a deal expected to generate net cash proceeds of $30 million.

Arc Games is known for the Remnant franchise, while Cryptic Studios is the developer behind Neverwinter and Star Trek Online.

Both studios are being acquired by Project Golden Arc, Inc., a company owned and led by members of Arc Games’ management team, with financing provided by XD Inc., a global developer and publisher listed on the Hong Kong Stock Exchange.

Embracer will retain publishing rights to the Remnant franchise, which will be transferred to THQ Nordic, the existing owner of both the IP and the development studio, Gunfire Games. The company will also keep the rights to the online fantasy game Fellowship, published by Arc Games earlier this year. These assets will be included in the planned Coffee Stain Group spin-off, first announced in May as part of Embracer’s strategy to split into three standalone, publicly traded companies.

Stockholm-based studio Chief Rebel, with a team of around 35, will continue development of Fellowship (currently in early access).

“This transaction supports our key priorities by strengthening our focus on strategic assets and core IPs while improving profitability and free cash flow,” said Embracer CEO Phil Rogers.

Last year, Embracer concluded a period of studio closures, divestments, and layoffs by announcing its plan to split the business into standalone entities: Asmodee, Middle-earth Enterprises & Friends, and Coffee Stain & Friends. At the time, the company said the reorganization would “unleash the full potential of each team and provide them with their own leadership and strategic direction.”

Earlier this year, after spinning out Asmodee and saddling it with debt, Embracer confirmed plans to spin off Coffee Stain Group and rename the remaining business Fellowship Entertainment (formerly Middle Earth & Friends).

The company has continued its restructuring across subsidiaries. Last week, Crystal Dynamics, the developer of Tomb Raider, confirmed its third round of layoffs this year. In August, Demiurge Studios, a co-development studio under Embracer that worked on 2XKO and Marvel Snap, reportedly let go of at least six staff members.

These moves follow the company’s 2025 annual report, which revealed a reduction of 1,857 employees over the past year, on top of approximately 1,400 layoffs in 2023, marking an ongoing period of downsizing and divestments.

Looking ahead, Embracer told investors it will focus on “targeted cost initiatives” and the use of AI to unlock additional value.

“This year is a transition period as we lay the foundations of Fellowship Entertainment and build a business centered on key IP and empowered teams, within a structure that supports focus and operational discipline,” Rogers said in August. “Our priority remains delivering high-quality releases with long-term value, rather than chasing short-term gains.”