Embracer Group has reported a stronger first quarter for fiscal year 2026/27, with revenue rising 24% year over year to SEK 3.943 billion and Cash EBIT returning to positive territory. The company is maintaining its full year target of at least SEK 1 billion in Cash EBIT as several major releases remain scheduled for the second half of the financial year.
Embracer recorded SEK 3.943 billion in net sales between April and June 2026, compared with SEK 3.171 billion during the same period last year. Organic growth reached 33%, while Cash EBIT increased 147% year over year to SEK 47 million, compared with negative SEK 99 million in Q1 FY2025/26.
The company expects earnings to be weighted towards the latter part of the financial year, with Warhammer 40,000: Dawn of War IV and Stage Tour planned for the third quarter, followed by Tomb Raider: Legacy of Atlantis and Metro 2039 in February 2027.
Gothic 1 Remake Drives PC And Console Growth
Embracer’s PC and console business benefited significantly from the launch of Gothic 1 Remake on June 5. The game sold 500,000 copies during its first week and is already close to recouping its development and marketing costs.
Revenue from the PC and console business increased 68% year over year to SEK 728 million. Revenue from new releases also rose sharply, reaching SEK 310 million compared with SEK 69 million during the same quarter last year.
Embracer also highlighted Fatekeeper, which performed above management expectations, while REANIMAL continued to contribute to catalogue sales.
Fellowship Entertainment Faces Difficult Comparison
The company’s Fellowship Entertainment segment generated SEK 810 million during the quarter, representing a 23% decline year over year. Embracer attributed the weaker result largely to the release schedule.
Fellowship Entertainment did not have a major new game launch during the quarter, while the previous year’s comparison benefited from Kingdom Come: Deliverance II and its first expansion. Cash EBIT for the segment fell to negative SEK 32 million from positive SEK 152 million a year earlier.
The wider Embracer operating segment, meanwhile, generated SEK 3.134 billion in revenue, up 48% year over year, with organic growth reaching 63%.
Dawn Of War IV And Stage Tour Are Next
Embracer’s next major releases are expected during the third quarter. Warhammer 40,000: Dawn of War IV is scheduled to launch on December 3, 2026, after moving from the previously expected second quarter.
Embracer said early indicators for the game show growing excitement among fans. Stage Tour is also planned for the holiday 2026 period and is being developed for PC, Xbox Series X and S, PlayStation 5 and Nintendo Switch 2.
These releases are expected to help improve Fellowship Entertainment’s performance during the second half of the financial year.
Metro 2039 And Tomb Raider Lead Q4
The company’s biggest upcoming releases are currently scheduled for February 2027. Metro 2039 and Tomb Raider: Legacy of Atlantis are both expected during the fourth quarter of FY2026/27.
Metro 2039, developed by 4A Games, has already generated strong interest. Embracer said the game reached one million wishlists faster than any other title in the company’s history, with wishlist numbers continuing to grow ahead of expectations.
Tomb Raider: Legacy of Atlantis is being developed for PC, Xbox Series X and S, PlayStation 5 and Nintendo Switch 2. Embracer expects both games to have a significant impact on Fellowship Entertainment’s performance during the final quarter.
Embracer’s Longer-Term Pipeline
Embracer is also preparing several projects for fiscal year 2027/28, including the next Kingdom Come game from Warhorse Studios and Darksiders 4 from Gunfire Games.
The company’s longer-term pipeline also includes Tomb Raider: Catalyst, developed externally by Crystal Dynamics alongside Flying Wild Hog and Eidos Montreal. Embracer has additionally confirmed that Warhorse Studios is working on a new Middle-earth game, although no release date has been provided.
Deus Ex Remastered and Thief: The Dark Project Remastered are also listed among the company’s announced future projects, although their release timing remains unconfirmed.
Fellowship Entertainment Spin-Off Progresses
The results arrive as Embracer continues preparations to separate Fellowship Entertainment into an independently listed company during calendar year 2027.
The planned company will contain major properties including The Lord of the Rings, The Hobbit, Tomb Raider, Darksiders, Dead Island, Kingdom Come: Deliverance, Metro and Remnant.
Fellowship Entertainment is being positioned as a focused, IP-led entertainment company. From FY2027/28, it expects to establish a release rhythm of at least two major games with full economics each year.
For now, Embracer is maintaining its full year forecast of SEK 3.6 billion in net sales and at least SEK 1 billion in Cash EBIT. With Dawn of War IV and Stage Tour arriving in Q3 before Metro 2039 and Tomb Raider: Legacy of Atlantis in Q4, the company’s performance during the second half of the financial year will be particularly important to its ongoing recovery.
