‘Lord of the Rings’ Owner Embracer Reports 10% Drop in Entertainment Sales, Blames Tolkien IP for ‘Lower Activity’

variety.com:

K.J. Yossman Embracer has reported disappointing results for the second quarter of 2024, reporting a large drop in net sales of 21% across the gaming group to SEK 8.6 billion ($782 million), with net sales of its entertainment and services also dropping by 10%.

Adjusted operating profit fell by 33% to $109 million between July and September 2024, missing projected forecasts. In its entertainment and services division, which also includes comic book publisher Dark Horse Media, Embracer reported a 14% drop in organic growth, which it put down to “lower activity and tough comparison figures year on year” within subsidiary Middle-earth Enterprises, the holding company for “Lord of the Rings.” While Middle-earth Enterprises had a “slow quarter” year-on-year due to a lack of new games releases, it did provide “higher film revenue than expected,” the company reported.

Embracer snapped up the Tolkien IP in 2022 for $395 million. By far the biggest drop across Embracer’s stable was in its PC/console games division, which saw a net sales decrease of 46%.

Mobile games sales also dropped by 8% and tabletop games by 6%. The results were attributed to release delays and increases in production costs as well as “a tough comparison from the releases of ‘Remnant II’ and ‘Payday 3’ last year,” said CEO Lars Wingefors.