Sales from Embracer Group’s games business rose by more than 30% in the last fiscal year, driving a slight increase in revenue for the company overall.
In the year ended March 31, 2020, the Swedish firm earned SEK 5.25 billion ($545 million) in revenue, up 3% over the prior year. Net profit for the period was SEK 283 million ($29.4 million), down 10% year-on-year.
The decline in profit was largely due to Embracer Group’s “Partner Publishing/Film” division, which helped with physical distribution for companies including Sega, Square Enix, and Bethesda. Revenue for the division declined 23% to SEK 2.05 billion ($213 million), due in part to the impact of the COVID-19 lockdown on retail.
However, Embracer Group’s first-party games business improved, with revenues rising 31% to SEK 3.2 billion ($332 million). In the fourth quarter, the company reported 78% of unit sales were digital, due to the COVID-19 lockdown, “which has resulted in an overall increased consumption of games.”
The company noted that, “the Group did not have any major or notable releases during March that most likely would have driven further sales increases. After the end of the quarter, we have seen this boost in consumer activity more clearly, driven by notable releases in the April and May period.”
Embracer Group has more than 118 games in development across its large network of studios, 69 of which have not been announced. The company expects further growth this fiscal year, with a slate that includes Biomutant, Destroy All Humans!, MotoGP 20 and Ride 4.
Looking ahead to the year ending March 31, 2022, Embracer Group expects to grow through the “first AAA games releases since Metro Exodus.” It expects to release at least one AAA game every year from that point on.
The other pillar of its growth strategy is acquisitions, which continued with a $525 million deal for Saber Interactive in February this year.
In April, it raised $164 million for the same purpose, with advanced discussions already taking place with “a handful groups of sizable companies that could form new operative groups.”