PWE and Cryptic have been bought out by Gearbox’s Embracer Group

Star Trek Online, Neverwinter, Champions Online, and the Torchlight franchise are along for the ride


We keep joking that the week before Christmas is basically the Friday night of burying last-minute news, and it keeps on proving us right. This time, we’ve got the news that Perfect World Entertainment – and by extension, Cryptic Studios and all of the MMORPGs they share between them – has been wholly acquired by Embracer Group AB, or will be once the deal closes in February. This is basically the North American and publishing branches of Perfect World, which apparently retains its other branches. Embracer is setting them up under the Gearbox Entertainment subsidiary and paid a cool $125M US in cash and shares.

Before you go panicking, know that Gearbox’s Randy Pitchford says the company will “invest into the future of Cryptic as an independent, dynamic studio that is passionate about MMOs,” while the press release talks up the success and profitability of Neverwinter and Star Trek Online in particular. Interestingly, it seems to home in on the failure of Magic Legends, which PWE sunsetted this past fall before it had even fully launched (leading to widespread layoffs) as the chief impetus for the sale.

“Upon completion of the transaction, PWE will operate within the Embracer group as a subsidiary of Gearbox Entertainment Company, with a continued focus on publishing and creating games. PWE comprises a team of 237 full time employees, including the team behind the publishing unit. Through the acquisition of PWE, Gearbox Entertainment will onboard PWE Publishing and Cryptic Studios, which will both remain independent within Gearbox Entertainment. This acquisition will strengthen Gearbox Entertainment’s Publishing division.

“Founded in 2000 and headquartered in Los Gatos, California, Cryptic Studios is one of the rare handful of studios with experience launching and operating multiple MMOs (Massively Multiplayer Online Games) at scale. The studio has a track record of success with three of the last four launches achieving meaningful commercial success. Neverwinter and Star Trek Online continue to be top performing MMOs with highly engaged user bases. Cryptic comprises a team of 136 employees.

“Founded in 2008 and headquartered in Redwood City, California, PWE Publishing is known for publishing leading PC and console titles based on well-known global entertainment franchises such as the Star Trek and Dungeons & Dragons games by Cryptic Studios. PWE Publishing’s product portfolio also includes the popular Torchlight series, as well as Remnant: From the Ashes, in partnership with Embracer owned development studio Gunfire Games. PWE Publishing comprises at team of 101 employees.

“During 2021, PWE had operating losses stemming from the cancellation of Cryptic’s newest MMO (Magic: Legends) and a gap in PWE Publishing’s release schedule. Embracer is highly confident that under its leadership, both Cryptic and PWE Publishing will be strong financial contributors in addition to their strategic value with new IP and an MMO capability that has been missing from Embracer’s portfolio.

“Cryptic Studios currently operates three longstanding MMOs (Neverwinter, Star Trek Online and Champions Online) with a shared life span of 25+ years. These titles generate significant profits, and Embracer expects the live Cryptic titles will continue to be strong and steady for the upcoming years. PWE Publishing has a compelling slate of upcoming games while continuing to evaluate new opportunities. Of the existing slate, PWE’s next launch is planned in 2022 with five additional releases by 2024. In calendar year 2021 the companies are estimated to generate net sales of approximately SEK 700 million. This includes some revenues from discontinued products at Cryptic.

Embracer Group forecasts that the transaction will contribute a breakeven operational EBIT during FY 22/23 and SEK 200-300 million during FY 23/24. These forecasts exclude any notable commercial or cost synergies.”

We’ll draw your attention here to this line: “PWE’s next launch is planned in 2022 with five additional releases by 2024.” It’s likely that the 2022 launch is the Torchlight mobile title, Torchlight Infinite, which opened beta signups yesterday. We don’t know what the five other games are yet.

It doesn’t sound as if there will be dramatic changes to the existing games, in any case; the STO team addressed the sell-off to the players this morning, with the Neverwinter and Champs teams posting a similar missive.:

“[I]n terms of the day to day operations of STO, very little will change, if anything at all. The team is not changing, the leadership of both STO and Cryptic Studios is not changing, and the team who was previously at PWE, now Gearbox, is unchanging as well. Basically, you should see very little difference once this deal goes through in how our game runs. […] There are no plans to sunset Star Trek Online right now.”

Source: Press release. Cheers, Victor!
Interestingly, Embracer announced a second acquisition today: Dark Horse, as in Dark Horse comics.
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