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‘Tomb Raider’ games group Embracer to slash spending

CNA – Swedish games group Embracer announced yesterday a restructuring programme to slash costs and investments, including in the development of new products, boosting the company’s shares.

Embracer has been hit by development delays, weaker demand, bad reception for some new games and, last month, the fall-through of a large planned strategic partnership.

Shares in the developer, which last year bought several development studios and the intellectual property rights to a new Tomb Raider edition and other games, yesterday rose four per cent by 0705GMT.

In a statement the company said it aimed to lower capital expenditure by at least SEK2.9 billion (USD269 million) and cut annual overhead costs by at least 10 per cent or SEK800 million.

“The figures include capex related to internal and external game development projects and other intangible assets, as well as tangible assets,” it said in a statement.

It repeated an outlook given in May of a full-year operating profit before items affecting comparability of between SEK7 billion and SEK9 billion.

The group’s earnings could be hit by one-offs such as potential severance payments and writedowns related to game development projects as part of the restructuring, it said.