Swedish rollup firm Embracer wrote down the value of its mobile business by ~$192.4m in its latest financial report and said it has “prudent” expectations ahead for the segment overall.
The Q1 and full-year results showed a dramatic drop in mobile game net sales following the $1.2bn sale of Easybrain to Miniclip.
The top mobile earners at the owner of CrazyLabs, A Thinking Ape and Deca are Sled Surfers, Glow: Fashion Idol, Lamar Idle Vlogger, Flop House and Party in My Dorm, the company said.
They contributed to Q1 net sales of SEK 682m, or ~$72.5m. That’s down 28% yer-on-year, mostly thanks to the Easybrain divestiture. Remove Easybrain from the picture and organic growth across the mobile portfolio in Q1 was 2%, Embracer said.
Mobile segment profitability in Q1, as measured by adjusted EBIT, was up YoY by 4% at SEK 95m, or ~$10.1m.
For the full year, Embracer’s mobile games pulled in net sales of SEK 2.3bn, or ~$244.9m. That’s down 57% YoY, again because Easybrain is no longer contributing revenue. Not accounting for the Easybrain sale, organic growth was down 3% for the full year, the company said.
Full year mobile segment profitability, as measured by adjusted EBIT, was down dramatically by 79% YoY to SEK 292m, or ~$31.1m.
The company wrote down the value of its mobile arm to the tune of SEK 1.81bn, or ~$192.4m. “The impairment in Mobile is related to prudent future expectations on growth in the mobile market,” the company explained.
On a product level, CrazyLabs’ Sled Surfers “continued to scale strongly, materially outperforming internal expectations”, Embracer said. Glow Fashion Idol has also become “a strong contributor” to the portfolio. CrazyLabs’ Lamar Idle Vlogger and Flop House and Party in My Dorm (A Thinking Ape) were the other top earners.
Elsewhere in the report, Embracer said mobile user acquisition costs for Q1 were SEK 353m, or ~$37.5m, or 52% of net sales. Mobile games are now 17% of group sales, down YoY from 18%, and internal headcount in mobile is now 663, down YoY from 743.
Embracer also announced it is spinning out its Lord of the Rings-based business, Fellowship Entertainment, to be an independent business in 2027.
