Fees paid to platform owners are more than twice the cost of game development
Embracer had another strong quarter, with an 80% increase in net sales, a 137% increase in EBITDA (earnings before interest, taxes, depreciation and amortization) and a 217% increase in operating EBIT (profit before interest and taxes). The group too released the annual report today, which is equally encouraging with year-over-year increases of 72% in net sales, 119% in EBITDA and 170% in operating EBIT. Embracer is currently working on 160 game projects across its many divisions and has confirmed they are in “ late stage talks ” with more than 20 companies about the possibility of joining the group.
Perhaps the most interesting news today is a statement shared by Embracer CEO Lars Wingefors in which the executive mentioned the intention to challenge existing paradigms regarding the high fees currently applied. by most platform owners (Nintendo, Sony, Microsoft on Xbox and Valve).
During the past fiscal year, the actual fees paid to platform owners (console and Steam) for digital sales alone are estimated to be at least twice the actual costs spent on game development over the course of the year. past year. We will continue to challenge these paradigms and seek opportunities to reduce costs and increase the relative investment in content creation.
Indeed, it is a period of great upheavals in this sector. Epic continues its fight for lower platform fees and recently even Microsoft announced that it will reduce, from August 1, its fees for PC games distributed through the Microsoft Store to 12%. Shortly after, a document unearthed as part of the Epic v Apple trial revealed that Microsoft was also considering lowering its fees on the Xbox platform, but that plan appears to have been halted for now.
In the news of the Embracer Group, the Deep Silver subsidiary has announced that it has resuscitated the historic studio Free Radical Design. Based in Nottingham, UK, he will be responsible for the development of a new TimeSplitters game; the project is led by Steve Ellis and David Doak, who worked on the original title.