Asmodee writes down more than $620m of asset value despite posting strong annual sales

Tabletop gaming giant Asmodee has written down the value of its assets by more than $620m, with owner Embracer Group blaming macroeconomic headwinds, rising interest rates and “prudent future expectations”.

The write-down represents about 20% of Asmodee’s €2.75bn acquisition price when it was bought by Embracer in 2021, and comes amid plans to spin off the board gaming business as a separate entity before the end of March next year.

Asmodee has been loaded up with about €900m of debt as part of that process – the vast majority of its parent company’s hefty debt pile – as Embracer believes it is the part of the business most likely to successfully carry the lending load given its history of stable cash flows.

That belief was underscored by strong annual results for Asmodee for the 2023/24 financial year, released this morning, which saw the tabletop business’ sales increase 13% to about $1.38bn.

Asmodee’s adjusted EBIT – a measure of profitability which removes some one-off expenditures – was largely flat year-on-year, but grew by more than 50% in the last quarter of the financial year to about $35.5m compared to the same period in 2023 – despite FYQ4 sales rising just 1% year-on-year.

Organic growth within Asmodee was up 7% for the 2023/24 financial year, but fell by 3% in the final quarter, January to March 2024.

Embracer CEO Lars Wingefors said, “Asmodee is still expected to generate mid-single digit organic growth in addition to any acquisitive growth, with an expanding Adjusted EBIT margin in the coming years.”

Asmodee said growth was supported by the successful launch of the Star Wars: Unlimited trading card game, but offset by other TCGs due to release timings – although it did not reveal what those timing issues were.

Star Wars: Unlimited’s success was highlighted in the annual results, with Embracer acknowledging that demand “notably outpaced supply” on release of the TCG’s first set in March.

Publisher Fantasy Flight Games revealed on Twitter just a week after Star Wars: Unlimited went on sale that it had “already far exceeded the sales of any game we have ever released”.

The company was forced to put into place a plan to slow down release of the game to retailers, to ensure a “steady flow” of new cards to prevent speculators hoarding and flipping them.

The game’s second set, Shadows of the Galaxy, is due to be released on July 12, and set 3, Twilight of the Republic, in the last quarter of 2024.

Wingefors said, “Asmodee, together with the renowned internal studio Fantasy Flight Games, has a clear multi-year roadmap with product development for several future sets already finished and remains focused on creating a strong ecosystem for players and retailers to install Star Wars: Unlimited as a long-term success.

“Further ahead, we also look forward to the release of the Altered trading card game in September this year.”

Altered raised more than €6m through a Kickstarter campaign in February, and Embracer said the pledge amounts had since reached €10m.

Asmodee is the part-owner of Altered publisher Equinox and is the distributor for the game.

Embracer’s annual results comes almost exactly a year after a $2bn partnership deal Saudi Arabian government-backed Savvy Games Group collapsed, bringing to an end a years-long acquisition spree fuelled by cheap borrowing costs prior to the Covid-19 pandemic.

Embracer was left with debt of more than $2bn, causing it to launch a huge restructuring program which saw it lay off almost 1,600 people, shutter a string of video game studios and sell off big-name assets including Borderlands publisher Gearbox Interactive.

Asmodee has remained something of a jewel in the crown of its troubled owner throughout the restructuring, having overtaking its PC and Console Games segment for net sales last year.

The tabletop arm avoided large-scale job losses during the now completed process, with numbers released in February showing its internal headcount fallen by just 82, to 2,500 people, since Embracer began the restructuring last summer.