Board game giant Asmodee’s corporate owner allegedly loses $2bn deal with Saudi Arabian partner

Tabletop publishing behemoth Asmodee, owner of massive franchises such as Catan, Ticket to Ride and Pandemic, clocked some impressive earnings during the first fiscal quarter of 2023, but that performance was overshadowed by news that a $2 billion investment deal with the Saudi-backed Savvy Gaming Group recently crumbled.

The Sweden-based Embracer group, which purchased Asmodee in 2021 for $3.1 billion, announced the loss of a major investment opportunity in May, causing stock prices to plummet and pushing the holding company into “cost-cutting mode”. According to a report from Axios, that deal was very likely a 6-year investment from Savvy Gaming Group, a Public Investment Fund (PIF) tied directly to the kingdom’s sovereign wealth.

Savvy previously invested $1 billion into Embracer in June of 2022, which created friction amongst developers owned by Embracer as well as consumers who suddenly find their art and money fattening the purses of a country with a long and sordid list of human rights violations. Axios further reports that Savvy executives told them the operation is “a genuine effort to get into gaming and address the professional and leisure interests of the kingdom's youthful population” and not just a method of diversifying Saudi Arabia’s oil-dependent economy. Saudi crown prince Mohammed Bin Salman currently holds a chair on Savvy’s corporate board.

The economic fallout of this lost deal will roll out through March of next year interim COO Matthew Karch and interim CSO Phil Rogers initiated a “restructuring program”, which amounts to layoffs amongst the 17,000 employees working for Embracer and its massive portfolio of owned entities. We don’t have any details about who will be affected or whether c-suite paycheck cuts will also be part of the cost-savings move - workforce triage is an unfortunately common move from interim leadership to appease stockholders during periods when the earnings line doesn’t go up enough.

Speaking of lines going up, Asmodee managed to perform well despite all the drama affecting its parent company. Sales in the first quarter (April through June) increased to a converted $292.9 million, compared to 2022’s $245.2 during the same period in 2022. According to the financial report, the tabletop publisher faced increased expenses and shrinking margins during the fiscal quarter but still managed to increase its organic growth by 9%.

Europe reportedly outperformed the US market in terms of this natural growth, which the company defines as anything not derived from acquisitions. Trading card games led the 70% percent increase for Embracer’s Entertainment & Services segment, largely thanks to the runaway success of Magic: The Gathering’s The Lord of the Rings: Tales of Middle-earth premiere set. Embracer owns Middle-earth Enterprises, which owns many of the exclusive rights to Tolkien’s seminal fantasy works.

Exploding Kitten’s Anarchy Pancakes, Fantasy Flight’s Marvel D.A.G.G.E.R and “successful” new miniatures games Star Wars Shatterpoint from Atomic Mass were name dropped as members of the strong pipeline of releases that helped Asmodee achieve its notable fiscal quarters numbers. The report anticipates a strong performance from upcoming board games such as the legacy version of Ticket to Ride and Fantasy Flight’s entry into the contemporary trading card game space - Star Wars: Unlimited.

Embracer also highlighted the three Spiel des Jahres awards garnered by board games published or owned by Asmodee. Mysterium Kids: Captain Echo’s Treasure clinched the Kinderspiel des Jahres, and capture-the-flag inspired card game Challengers! took the Kennerspiel des Jahres - a standalone sequel called Challengers! Beach Cup was recently announced. Unlock! and Unlock! Kids was awarded the judges’ Sonderpries, a special award honouring industry impact or especially clever innovation.

While Asmodee itself has not announced any layoffs, redundancies or studio closures, this spoiled deal highlights the precarious and fraught nature studios must accept as the reality of corporate ownership. They are largely insulated from the boom-or-bust nature of the tabletop game industry but must accept ties to Saudi Arabia and the ever looming threat of being thrown on a sacrificial pyre of fiscal stability.