Embracer Group, which is under duress due to poor game sales and reception, is now planning to split into three separate companies, the company has announced.

The three companies will be split into the following new and separate companies:

• Asmodee – a global leading tabletop games publisher and distributor with an extensive studio network and IP catalogue.
• Coffee Stain & Friends – a diverse gaming entity with a dual focus on indie and A/AA premium and free-to-play games for PC/console and mobile, with a high degree of recurring revenues.
• Middle-earth Enterprises & Friends – a creative powerhouse in AAA game development and publishing for PC and console, as well as the stewards of The Lord of the Rings and Tomb Raider intellectual properties, among many others.

“The three entities will be separate, publicly listed companies, enabling each entity to better focus on their respective core strategies and offer more differentiated and distinct equity stories for existing and new shareholders,” Embracer Group said in a statement.

Asmodee Group will operate as a tabletop game publisher and distributor. CEO Stephane Carville and COO and founder Marc Nunes will sit into the Asmodee Group’s board of directors, with Carville stepping down for deputy COO Thomas Koegler who will take the reins of Asmodee Group.

Coffee Stain & Friends will handle Embracer Group’s lower tier videogame branch, with focus on A/AA and indie games for PC, console, and mobile. It will operate under two segments, on handling freemium games, and the other free-to-play games.

The remaining and largest part of the Embracer Group will become Middle-earth Enterprises & Friends. The new group will handle the higher-tier AAA game development and will handle the game franchises like the Tomb Raider and Lord of the Rings games. PLAION Pictures, Eidos Montreal, and the remnants of Square-Enix Montreal, which were formerly acquired by Embracer Group in 2022, along with Dark Horse Media which was acquired in 2021, will also be under the aegis of Middle-earth Enterprises & Friends.

Embracer Group’s governing and corporate structure has also been changed. Lars Wingefors AB has the largest share and control of the companies, and currently has 20 percent of the capital and 40 percent of votes, and promises that it “will remain a long-term, active, committed and supportive owner of all three entities.”