Report: Embracer's doomed $2B deal was with Saudi-backed Savvy Games

According to a new report from Axios, the Savvy Games Group was the other party in Embracer's much-touted $2 billion deal that fell apart. 

Back in May, Embracer CEO Lars Wingefors said the company was preparing for a "groundbreaking strategic partnership" with a then-unknown business partner. At the last minute, the deal was ended, which in turn saw Embracer cancel games,  lay off staff, and close down developer Campfire Cabal. 

Savvy Games has money from the Saudi Arabia Public Investment Fund (PIF) and the Crown Prince Mohammad bin Salman. As noted by Axios, the deal would've further established Savvy as a major games label, which has been making minor investments into companies such as EA and Nintendo over the past year.

Sources speaking to the outlet were unable to detail why Savvy backed out from the deal reportedly after a verbal agreement was struck and paperwork was drawn up. In May, the $2 billion deal was said to be "in contracted development revenue over a period of six years."

"We asked for the execution of the agreement before our Q4 announcement," Embracer added at the time. "However late last night, we received a negative outcome from the counterparty."

What happened after Savvy and Embracer's deal died

Outside of this would-be partnership, PIF had previously invested an 8.1 percent stake (or $1 billion) into Embracer in 2022. That would seem like a foundation for a larger alliance to happen, but plans apparently changed. Savvy's most recent major investment was purchasing free-to-play publisher Scopely in April. 

While Embracer has been on a cost-cutting spree following the botched Savvy deal, it's pivoted to maintain what deals it currently has. The company's biggest ongoing partnership is presently with Amazon Games, as the two are teaming on an MMO for the Lord of the Rings, whose rights Embracer purchased in full last year. 

Additionally, Amazon will handle publishing duties for the next Tomb Raider game. Embracer acquired the rights to that series (and its developer, Crystal Dynamics) following a deal with Square Enix that also saw it gain Marvel's Guardians of the Galaxydeveloper Eidos Montreal and the now defunct Onoma (formerly Square Enix Montreal).