'Lord of the Rings' and 'Tomb Raider' brands move to new Fellowship Entertainment company in Sweden
Fellowship Entertainment will have net sales of SEK4.39 billion and a headcount of 2,169 employees across its studios
The Lord of the Rings, The Hobbit, and Tomb Raider brands are set to become the centrepiece of a new Stockholm-listed entertainment company, following a major corporate split at Embracer Group.
The split
Embracer Group — which owns the underlying intellectual property rights to The Lord of the Rings, The Hobbit, and Tomb Raider, among other major brands — will divide into two publicly listed businesses, both trading out of Sweden: Fellowship Entertainment and a restructured new-look Embracer.
Embracer chair and key shareholder Lars Wingefors described the Fellowship assets as "among the most undervalued in the industry" in a letter to shareholders explaining the rationale.
"The main rationale to spin-off Fellowship is to increase management focus to capture the full joint potential of the IPs, their respective communities and some of the best game developers in the world," he said.
What Fellowship Entertainment will include
Fellowship will oversee the Lord of the Rings IP and a range of games franchises, with a focus on game development, publishing, and licensing — the latter encompassing IP management across games, film, consumer products, and related areas. It will begin trading in the first quarter of the 2026-2027 financial year.
The company will bring together 4A Games, Crystal Dynamics, Dambuster Studios, Dark Horse Media, Eidos-Montréal, Fishlabs, Flying Wild Hog Studios, Gunfire Games, Middle-earth Enterprises, Redoctane Games, and Warhorse Studios.
It will also launch a publishing arm consolidating assets from Plaion and other parts of the current Embracer Group. Current net sales stand at SEK4.39 billion ($467 million), with a headcount of 2,169.
The new-look Embracer
The restructured Embracer will focus on supporting more entrepreneurial companies, including Vertigo Games, IPs such as Destroy All Humans! and Titan Quest, and licences for brands including Hot Wheels Unleashed and SpongeBob SquarePants. It will have net sales of SEK11.54 billion ($1.23 billion) and a headcount of 3,518.
Leadership changes
Embracer CEO Phil Rogers and COO Lee Guinchard will move to become the chief executive and chief operating officer of Fellowship, respectively, alongside CFO Müge Bouillon, who also becomes deputy of the current Embracer with immediate effect. A recruitment process for a new CEO and CFO for Embracer has commenced.
Rogers said: "Our direction is clear: to build a more disciplined group with two distinct businesses, each with a mandate and a structure that supports transparency and execution. I am confident that this is the right path forward to deliver long-term value for our fans, our businesses and IPs, our people, and our shareholders."
Financial context
The announcement came alongside Embracer's Q4 results, which showed net sales fall 24% year-on-year to SEK3.91 billion, even as its entertainment services unit — which houses Lord of the Rings and other major brands — grew 23% to SEK1.7 billion. Adjusted EBIT fell 64% to SEK360 million.
Wingefors acknowledged the challenges of recent years but expressed confidence in the path ahead. "I'm convinced that Fellowship Entertainment could reach industry-leading profitability and show healthy long-term organic growth above the industry average," he said.
