Asmodee remains jewel in Embracer’s crown despite suffering quarterly sales drop

Board game giant Asmodee continues to outperform for troubled parent company Embracer Group, despite its latest quarterly sales numbers falling compared to the same period last year.

Asmodee posted net sales of more than SEK3bn ($288.5m) in Q1 of the 2024/25 financial year, a 5% year-on-year drop, with Embracer blaming the lower performance of distributed games in Central Europe and the UK.

Embracer Group as a whole saw its quarterly net sales slump 24% year-on-year, with its PC and console games section falling 34% to about SEK2.6bn ($252m).

It said Asmodee’s revenue was driven by the continued success of trading card game Star Wars: Unlimited alongside “a strong slate of new board game releases”, with Asmodee deputy COO Thomas Koegler specifically highlighting Harmonies as having had a strong launch when speaking in a Q&A about the results.

Koegler said he could not comment on the specifics of the lower performance of distributed games, especially where it related to partner IPs. Asmodee distributes trading card games such as Pokemon, Magic and Yu-Gi-Oh!, as well as publishing board games under 22 subsidiaries including Catan Studio, Days of Wonder, Fantasy Flight Games, Lookout Games and Z-Man Games.

Koegler said, “It’s more related to the fact that we have a very deep portfolio of products, and sometimes in certain areas you have products that go up and down, but the chance we have is we have 100s of products, we’re present in 22 countries, so if there’s a slowdown somewhere it usually picks up somewhere else.

“And it’s the case, with Star Wars: Unlimited it’s performing great, other very strong launches like Harmonies or others, its just the nature of the business and the nature of consumer consumption in various countries.”

Koegler, who is set to take over as CEO of the company in the coming months, was also specifically asked about whether Asmodee’s €900m debt pile would prevent it from going out and acquiring new companies – something it became synonymous with during the 2010s, when it picked up publishers including Days of Wonder, Fantasy Flight Games and Catan Studios.

Embracer loaded Asmodee up with the debt pile in April ahead of a planned spin-off of the board games business, in order to pay down borrowing across the rest of its operations.

Koegler said, “The only answer I can make is, we’ve been operating under private equity before joining Embracer, with higher leverages, and it has never prevented us from being successful.”

He was also asked about the potential long term growth of the board games market, responding, “It’s a very good question, and unfortunately in our industry we do not have the likes of (PC and console game data platform) NewZoo, so your job is quite difficult in trying to find relevant information on the market dynamics.

“What we see, and with the help of external consulting firms, is that our expectation for the long term is to have somewhere around a mid-single digit growth of the market.”

Embracer co-founder and CEO Lars Wingefors said Asmodee had a “solid earnings growth outlook” thanks to its strong game portfolio and sales channel presence, bolstered by the successful release of Star Wars: Unlimited, which he said “remains in high demand”.

Asmodee’s adjusted EBIT – a measure of its profitability which removes some one-off costs – grew 20% year-on-year in Q1 to about SEK250m ($23.7m).

Wingefors said Asmodee’s planned spin-off and stock market listing as an independent entity remained on track to take place this financial year, adding that Asmodee would hold a capital markets day in the last quarter of 2024 “to improve awareness” of the move.

In May Asmodee wrote down the value of its assets by more than $620m, with Embracer blaming macroeconomic headwinds, rising interest rates and “prudent future expectations”.

The write-down represented about 20% of Asmodee’s €2.75bn acquisition price when it was bought by Embracer in 2021.

Embracer began a severe restructuring process last summer in an attempt to tackle its $1.45bn debt pile, which saw it lay off about 1,400 people.

Asmodee, which avoided large-scale job losses during the process, became Embracer’s biggest earner last year after overtaking its PC and Console Games segment for net sales, and has since cemented its position as Embracer’s top-performing segment.

Embracer was primarily a video games-focused business before buying Asmodee, as part of a years-long acquisition which also included the buyouts of Middle Earth Enterprises, Dark Horse Comics and a string of other video game studios.

Earlier this week BoardGameWire reported that Asmodee’s 2021 buyout of online board gaming platform BoardGameArena had reaped rewards, with the service passing 10 million accounts – up from one million in 2018.

The company also recently announced a partnership deal with LEGO to launch Dotted Games, a dedicated design studio focused on creating new LEGO board games.