Embracer Group acquires rights to The Lord of the Rings, The Hobbit: Full Details

Embracer Group AB, one of Europe’s biggest games companies, has increased its acquisition pace after closing deals for six companies, including the intellectual property rights to The Lord of the Rings trilogy and The Hobbit. “Gaming is the best way to monetize IP over the long term, but not necessarily the most efficient way to create new IP,” Embracer Chief Executive Lars Wingefors said in an interview following the group’s Q2 report.

The CEO says the Middle-earth Enterprises acquisition “allows many companies within the group to work on IPs that we control for the long term” and will now join Embracer’s existing catalog of more than 800 owned and controlled IPs.

Game companies like Embracer are increasingly focusing on IP as a way to generate sales from the mass appeal of characters and stories that have already attracted large audiences. The Embracer IP of JRR Tolkien’s famous trilogy also contains the film rights, giving them a financial interest in future projects such as the Amazon series The Lord of the Rings: Rings of Power.

Karlstad-based Embracer, which is seen as one of the so-called serial acquirers due to an aggressive growth strategy, also announced the creation of its 11th operating group, Freemode, where several of the new acquisitions will be housed. Freemode’s business “is more niche” and will include a focus on retro games, Wingefors said, pointing to recently acquired Limited Run Games – the “leading publisher of nerdy retro games” in the market.

Embracer shares were down as much as 7% in early trading after the report was released, but were quoted down 1.8% at 2.30pm Stockholm time/6pm IST. Wingefors attributes the slow quarter to the company not having “significant new launches” compared to the same period a year ago. However, the CEO says he has high expectations for the rest of 2022 with “a good number of titles coming”.

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