Swedish games giant Embracer Group has officially confirmed that its failed $2 billion deal was with Savvy Games Group.
Speaking to GamesIndustry.biz, Saber founder Matthew Karch – previously a board member at Embracer Group – said that the deal was with Saudi Arabia's games arm. This news had previously been reported by Axios, but this is the first official confirmation.
Embracer recently sold Saber to Beacon Interactive, a company set up by Karch, for $247 million.
"When we lost that transformational deal back in May of last year – I don't know if it was ever officially disclosed as Savvy or not – it was very clear to me as somebody who was on the board of Embracer that we were going to need to make significant changes," Karch said.
"There were a few factors that were at play. I would say the biggest factor was probably that the market had shifted. There was a period of time when there was such enthusiasm about the game sector that raising capital was easy with a strong share price and Embracer had a strong share price. But as interest rates started to rise and people started to pull their money out of the markets, and as cash became more important, there was a lack of confidence or a lack of patience for companies that had investments that were long term into video games."
Karch continued, saying that while Embracer didn't necessarily need to make this deal with Savvy Games Group, it would have been a net positive for the company.
"There was a lot of certainty that [the deal] was going to happen," Karch says. "It was basically placing too big of a bet on something that ultimately ended up not materializing for one reason or another. But had that not been the case, a lot of those games would have ended up being signed with other partners and the situation would have been significantly improved over where it was.
"It is true that when you gather so many assets so quickly, you have to take a deep breath and take stock of what you have. And I also think that when the markets are supporting this manic kind of growth and you're in a situation where you could take advantage of that, it's hard not to leverage that. It's hard not to leverage a strong share price to go out and buy assets."
