"It was more that they would like to do something in the future, but not now, which became a 'no' for us."
Embracer CEO Lars Wingefors has described the collapse of a "groundbreaking" partnership deal worth $2 billion as "painful" during a recent investor Q&A.
Back in May, Wingefors confirmed Embracer had spent months working on a strategic partnership that would have "set a new benchmark for the gaming industry," only for the deal to fall through at the last minute.
He claimed Embracer had a "verbal commitment" with its unnamed partner and said the deal included over $2 billion in contracted development revenue over a period of six years.
A recent report from Axios claims that mystery partner was none other than Savvy Games, the Saudi state-backed investor that owns game and esports companies including Scopely, ESL, and FACEIT.
When asked about that report, Wingefors refused to confirm the identity of the business partner, citing legal reasons and suggesting that, in business, you "don't comment on partnerships unless both partners would like to do that."
He did, however, provide some explanation as to why the deal unraveled, and indicated it was more about timing that anything else.
"As stated, when announcing the news last quarter, the background given to us [as to] why the partnership didn't happen was not because of the terms or the pipeline of games," said Wingefors. "It was more that they would like to do something in the future, but not now, which became a 'no' for us."
When asked for his thoughts on the collapse now he's had more time to digest the situation, Wingefors reiterated his belief that the proposal itself was sound, but admitted the entire ordeal has been "painful."
"I think the idea to partner up with someone to finance and to share business risks, and that both partners are in the same boat, is still valid," he said. "Obviously we do that with industry partners today, but this was on a greater scale. Embracer, again, being the only company with such a broad pipeline, including a significant variety of well-known IPs and licensed IPs, I think is a very interesting proposal for players.
"Now that's history. Now we're taking control in our own hands. We're adapting and adjusting, and we've left this behind us. Personally I've done a lot of learnings, and it's been painful, but as an entrepreneur you learn as you go."
During the same earnings call, Wingefors confirmed Embracer is pushing ahead with its restructuring program, which will see the Swedish conglomerate shutter internal studios and layoff an unknown number of staff.
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