Embracer sells off Arc Games and Cryptic Studios

Embracer has divested another two studios from its sprawling portfolio. Arc Games and Cryptic Studios have been purchased by a new entity, Project Golden Arc, which is lead by members of the Arc Games management team and funded by Hong Kong firm XD Inc.

Arc Games is the publisher of live service games Star Trek Online, Neverwinter, and the Remnant series, along with Torchlight and Hyper Light Breaker. Cryptic Studios was the developer behind Neverwinter and Star Trek Online. The proceeds of the sale amount to $30 million (SEK 287 million), the company said.

As part of the deal, Embracer retains publishing rights to the Remnant franchise, developed by Gunfire Games, and rights for MMO Fellowship, developed by Chief Rebel and currently in Early Access. The latter will be assigned to Coffee Stain, which is planned to be spun out of Embracer in December.

“This transaction supports our key priorities by strengthening our focus on strategic assets and core IPs in Embracer while improving profitability and free cash flow,” said Phil Rogers, CEO of Embracer. “The deal also allows online multiplayer game Fellowship, developed by a talented external team in Stockholm, to find a great home within Coffee Stain Group. I would like to thank the teams at Arc and Cryptic for their hard work over the past four years and wish them all the best as we are confident they will thrive and develop in the years ahead.”

The studios were previously owned by Perfect World, which Embracer acquired in 2021 and rebranded as Gearbox Publishing San Francisco. Embracer sold off Gearbox in 2024.

The divestment is the latest in the protracted unwinding of Embracer’s previous rapid expansion under founder and former CEO Lars Wingefors, which was abruptly halted after a planned $2 billion partnership – reportedly with Saudi Arabia’s Savvy Games Group – did not proceed. The company posted a net loss of SEK -23 million for the most recent quarter, and a total income of SEK -203 million for the period.