You won't find many video game industry executives defending Embracer Group or its CEO Lars Wingefors. After a massive business deal (allegedly with Saudi-owned Savvy Game Group) fell through in 2023, the company executed a brutal string of cuts and studio closures that resulted in 4,500 cut jobs and 80 cancelled projects.Whatever you think of Embracer's business moves, there's no denying the amount of pain it's inflicted on former employees, and the economic impact on the game industry as a whole. But while even many friends of Embracer keep quiet, one former chief operating officer and board member hasn't: Saber Interactive chief executive officer Matthew Karch.In April, Karch jumped on LinkedIn to defend Lars from the spree of critical comments that dominated the professional social media platform. In an interview with Game Developer about the past and future of Saber, Karch stood by that stance, and said criticism of Wingefors and leadership has not been fair."I know Lars better than most people do. He's not a terribly extroverted person—he's quiet, he's unassuming, and he means well. He's taken a tremendous amount of abuse," Karch argued. Seeing a slew of critical—and what were undoubtedly sometimes hostile—comments made him reach for the keyboard and proclaim that he still believed in the beleaguered Swedish conglomerate.Related:What’s made Saber Interactive such a long-lasting studio?He said he stands by those comments—and in our conversation, shared his thinking not just about the attacks on his friend, but why Embracer's drastic action will ultimately be good for the company.
Karch says his former Embracer colleagues are "like family"
It was surprising how in so many ways Karch's defense of Wingefors and Embracer felt—relatable. Not relatable in a "everybody makes mistakes" kind of way, but relatable in a "I logged onto social media and had to yell about someone being wrong on the internet," kind of way.Karch described logging onto LinkedIn and being bombarded by posts and opinions about the state of Embracer. He hadn't even jumped on to do any particular business, he logged in for the same reason most of us do to any social media platform: he was just idly scrolling. After seeing so many comments—some harsh, some "untrue"—and he felt "compelled" to post a response."Not saying something is worse than being negative about him or going out and saying something outwardly bad," he said (it seemed he was referring to himself and his position as a former Embracer board member).The fact that so many of the comments bothering Karch came from game industry professionals made it "really hurt." ("It probably hurt me more than it hurt him, because he's so used to hearing it," he admitted).Some of the comments he saw were incorrect—some professionals lambasted Wingefors for buying Gearbox for over $1 billion and selling it for $460 million. Embracer merged with Gearbox in 2023 for a day-one purchase of $363 million—the deal was just reported to eventually cost a total of $1.6 billion.But he also took issue with comments saying Embracer's board was full of "terrible people" for laying off so many developers. As interim COO and a former board member, Karch had a firsthand look at the company's financials and felt closer to the situation.He did say it was "irresponsible" to grow as fast as the company did, because such a strategy relied on either never-ending growth or at least access to never-ending capital. He also said Wingefors pursued that strategy in part to ensure he could "keep his promises" to everybody. "That slowed down his ability to make necessary changes earlier in the process."Through it all Karch emphasized that Wingefors had the best intentions—that hindsight is 20/20 and that no one could have seen such a major market shift coming.But that left us asking—if it's not fair to harshly criticize Wingefors' leadership, who is accountable for the destruction of so many jobs?
"Layoffs are inevitable"
There are two sides to Karch's perspective on Embracer's implosion. First, in the early days of Saber Interactive, he says he didn't take a salary for the company for "ten years.""I didn't even know how I was gonna survive," he recalled. He's been through the feast and famine of game development, and worked hard to build a studio that can survive hard times.But flip the coin over, and you'll find the former interim COO of Embracer, who took on the role of "the bad guy" when evaluating whether to shut down studios and cancel games. He said he reviewed many of the games in development at Embracer subsidiaries and identified a number that would have been "not good." "At that point you either put the team on something else, or you close down, or you reduce the team size," he said. "When money is tight, you have no choice."He said he departed Embracer because he was "insistent" the company needed to do more of that. Certain studios, he said, should never have been started in the first place. He called out one subsidiary with a team of what he said were inexperienced developers that had never shipped a game before, pouring millions of dollars into a game licensed from a major franchise."After a long period of time, there was nothing really to show for it," he said. "Their goal was basically to start anew." He said it didn't give him any pleasure to argue that the studio had to be shut down.(It's only the description that this studio was new and founded with people who "hadn't shipped a game before" that keeps it from sounding like Aspyr's ill-fated work on the remake of Star Wars: Knights of the Old Republic. In a follow-up email a Saber spokesperson declined to state which studio Karch was referring to.)There is a tangible thread to Karch's perspective. At a nuts-and-bolts level, a studio making a game whose costs will wildly exceed potential revenue isn't sustainable. If it can't pay people, it will shut down, and someone has to make the call when that time has come.But the anger at Embracer—and by proxy, Wingefors—is rooted in the fact that he and his colleagues who greenlit these projects won't lose their income, their health insurance, or their career prospects as a result of these failures. The accountability for its financial mistakes was placed on the people with zero input on how they were made in the first place.It's understandable why so many in game development feel that status quo—and not criticism of Wingefors—is what's actually unfair.
