Embracer Group Buys Perfect World American Branch

Embracer Group, a conglomerate of entertainment companies has acquired Perfect World Entertainment, the American subsidiary of Chinese company Perfect World.

The deal is expected to close in February, and will see Embracer Group, who owns game publishers such as THQ Nordic and Gearbox Entertainment, acquiring Perfect World Entertainment for a total of USD 125 Million.

The acquisition will also include Cryptic Studios and Runic Games, as well as Perfect World Entertainment’s publishing arm, which will all be operating under Gearbox Entertainment.

“Through the acquisition of PWE, Gearbox Entertainment will onboard PWE Publishing and Cryptic Studios, which will both remain independent within Gearbox Entertainment. This acquisition will strengthen Gearbox Entertainment’s Publishing division”, they said in a statement regarding the acquisition.

“It’s an honor for us to welcome this talented group of individuals into the Gearbox Entertainment family. Gearbox will invest into the future of Cryptic as an independent, dynamic studio that is passionate about MMOs. That commitment is paired with an exciting new partnership that will emerge as the talented Perfect World publishing team and their promising line up of future games will become supported and bolstered by the capability and strength of the Gearbox Publishing team,” said Randy Pitchford, founder of Gearbox Entertainment Company.

The Embracer Group takeover of Perfect World Entertainment comes at an interesting time. Many large Chinese companies have begun hedging their bets by having studios outside of China, effectively free of regulatory oversight of the local government. In the face of this however, Perfect World has sold off its overseas assets.

“Perfect World’s overseas subsidiaries have struggled this year, to the point the parent company reported a one off RMB 270 million loss earlier in the year due to the cancellation of Magic: Legends and other overseas projects. It’s clear the company is cutting its losses”, says senior analyst Daniel Ahmad in a tweet.

“This is a notable deal because it comes at a time when other Chinese gaming companies such as Tencent, NetEase and miHoYo are staffing up studios overseas and investing in overseas studios. Perfect World is selling its NA business. Embracer will look to turn it around”.

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