Continuing the trend of absolutely depressing gaming news spilling forth from a rotten industry, Swedish video game holding company Embracer Group has cancelled the development of a new Deus Ex game at Eidos-Montreal, resulting in a number of layoffs within the studio.
Embracer Group’s trajectory in the past few years has been marked by aggressive expansion through acquisitions, making it Europe’s most valuable video game publisher by 2021 – mirroring an explosive growth seen across the industry during the pandemic.
However, the company’s rapid growth and subsequent failure to secure a major partnership contributed to a series of setbacks. These include the closure of Square Enix Montréal and Saints Row studio Volition, both under Embracer’s umbrella.
— Eidos-Montréal (@EidosMontreal) January 29, 2024
While there were earlier rumors circulating about a Deus Ex project, no official announcement had been made prior to its cancellation. Sadly, the cancellation coincides with the announcement of layoffs of 97 people working at Eidos-Montreal on their official X account.
The project, which had been in progress for approximately two years following Embracer’s acquisition of Eidos-Montreal in 2022, was abruptly terminated as part of Embracer Group’s broader restructuring and cost-cutting initiatives. The now-scrapped Deus Ex game was rumored to be poised to enter full production later this year.
This is a disappointing turn of events for fans eagerly anticipating the next installment in the beloved cyberpunk video game franchise, which has been dormant since Mankind Divided. Embracer Group’s decision to halt the Deus Ex game’s development is apparently a part of a series of strategic moves aimed at streamlining operations and managing costs.
The Embracer Group conglomerate faced serious challenges after failing to secure a $2 billion deal, leading to layoffs across various subsidiaries. This includes the recent layoff announcement by Microsoft, letting go of nearly 2,000 Activision Blizzard employees, following a broader trend of workforce reductions in the gaming industry in recent months.
The restructuring efforts undertaken by the Embracer Group since November 2023 have resulted in the cancellation of multiple projects and the layoff of approximately 5% of its workforce. The repercussions of these decisions continue to reverberate through its subsidiaries, with Eidos-Montreal now facing a significant workforce reduction.
The 97 employees at Eidos Montreal that were laid off are from various departments, including development teams, administration, and support services. Eidos-Montreal, known for its work on titles such as Deus Ex: Mankind Divided and Marvel’s Guardians of the Galaxy, cited the “global economic context” and the challenges within the gaming industry, emphasizing the impact of Embracer’s comprehensive restructuring on their operations.
Embracer’s acquisition of Eidos Montreal in 2022, as part of a $300 million deal, granted the conglomerate rights to iconic franchises like Tomb Raider, Thief, and Deus Ex. However, the cancellation of the latest Deus Ex project raises concerns about the future direction of these acclaimed franchises under Embracer’s stewardship.
The gaming industry, as highlighted in the Game Developers Conference’s 2024 State of the Game Industry report, has witnessed a concerning trend of layoffs. Approximately 35% of game developers reported being impacted by layoffs in the past 12 months, with half expressing concerns about potential future job cuts. Embracer Group’s recent actions contribute to the industry-wide challenges, adding to the more than 10,000 layoffs recorded in 2022 and 2023.
The ramifications of Embracer Group’s decisions extend beyond a single project cancellation, raising questions about the long-term sustainability and strategy of one of the gaming industry’s prominent conglomerates.
