Gearbox, Creator of Borderlands, Sold by Embracer for Less than Half Its Purchase Price [Updated]

• Take-Two Interactive acquires Borderlands developer, Gearbox Software from Embracer Group.
• Embracer sells Gearbox for $460 million, despite purchasing for $1.3 billion in 2021.
• Embracer retains rights to certain Gearbox assets and other studios.
• Payment for the deal will be in newly issued Take-Two shares.
• Gearbox is developing new games under Take-Two's ownership.

Borderlands Developer Gearbox Software Acquired by Take-Two Interactive

A character decorated with roses and guns raises three fingers.

Once again, a company has managed to avoid the acquisition attempts of the voracious publisher, Embracer Group. This time, it's the Borderlands developer, Gearbox Software, which has been snapped up by Take-Two Interactive.

Details of the Deal

Earlier reports suggested that Gearbox was on the brink of a sale. Now, it's confirmed that Embracer has sold the company at a substantial loss, having originally purchased Gearbox for $1.3 billion in 2021. The Texas-based company joins Take-Two Interactive's portfolio for a significantly lower sum of $460 million.

What Remains with Embracer

Despite the sale, Embracer retains rights to certain aspects of Gearbox's business, including Gearbox's San Francisco Publishing branch, the publishing rights to the Remnant franchise, and the upcoming Hyper Light Breaker from Heart Machine. Embracer will also continue to publish some "unannounced" games from Gearbox's portfolio, with no further information disclosed in the official announcement.

Other Retained Assets

Embracer is also holding onto Cryptic Studios, which develops Neverwinter Online and Star Trek Online, Lost Boys Interactive, which recently worked on Tiny Tina’s Wonderlands, and 3D modeling company Captured Dimensions. These companies are anticipated to provide a positive cash flow in the future.

Payment and Completion

The entire deal will be paid in newly issued Take-Two shares, with the deal expected to close by the end of Embracer’s fiscal first quarter, ending in June 2024.

What's Next for Gearbox?

Under the helm of Take-Two, Gearbox is currently developing a new game in the Borderlands series, as well as the next game in the real-time strategy franchise Homeworld.

Recent Moves by Embracer

This acquisition follows closely on the heels of Embracer's sale of Saber Interactive. This came after the cancellation of nearly 30 games in Embracer’s portfolio and the loss of over 1,300 jobs. Embracer's acquisition spree over the years has affected thousands of workers in the video game industry, resulting in job losses, canceled games, and sales of companies for less than half of their acquisition cost.

Update on the Sale

Following the sale announcement, a Gearbox spokesperson confirmed that Embracer has laid off employees not involved in the development of its games. This has impacted workers in PR, marketing, user research, and other sectors.

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