How Embracer's cuts killed a potential Red Faction sequel and gutted a promising studio

A phoenix is a mythological firebird that is periodically reborn from its own ashes, a symbol of cyclical renewal. It's also, according to several former employees of Chorus developers Fishlabs in Hamburg, an internal title for the massive cost-cutting project begun by Swedish conglomerate Embracer Group in June 2023.

The current incarnation of a bewildering series of mergers, renamings and acquisitions that date back to the founding of Nordic Games in 2004, Embracer have spent much of the past decade buying up video game studios and licenses, from Deus Ex developers Eidos Montreal to the adaptation rights for The Lords Of The Rings. According to a February 2023 earnings report, by the end of December 2022 the conglomerate had 134 internal studios on the books (including table-top developers) and owned or controlled over 850 IPs, with 224 games in development. Our Graham warned of the perils of such consolidation in 2019, and his misgivings have been borne out. Following the reported collapse of a billion dollar Savvy Games investment deal, Embracer set out to recover their debts by cancelling projects, laying off staff and closing whole studios. Fishlabs - acquired by Embracer in 2018 alongside their parent company Koch Media, nowadays Plaion - were among those burned by "Project Phoenix", first losing a dozen people in September 2023, and then around half their remaining workforce in November. In the process of these reductions, Embracer also binned off two video game projects – a sumptuous sci-fi metroidvania that was in full development, and a "visual prototype" for a brand new Red Faction game.

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