New Lord Of The Rings Movies In Huge Trouble After Company Layoff?

The Lord of the Rings IP owner is cutting costs, but the reboot movies doesn't appear to be affected.

By Phillip Moyer | Updated

lord of the rings

Embracer Group, the entertainment company that has been buying up gaming and media properties over the past few years, famously acquired Middle-Earth Enterprises in 2022. This acquisition, which was part of a larger $573 million purchasegave the company the rights to both The Lord of the Rings and The Hobbit. However, the nearly-endless acquisitions seem to have taken their toll on the Swedish company, which has released an open letter announcing a “restructuring program” that will result in layoffs and possibly the selling off of some of its acquisitions.

This news comes just a few months after Embracer Group announced that it was partnering with New Line Cinema, the film company responsible for Peter Jackson’s Lord of the Rings and The Hobbit trilogies. In the announcement, Embracer stated that they would “further explore the cinematic universe” alongside New Line Cinema, starting with the upcoming anime Lord of the Rings: The War of Rohirrim.” In an investor call, they hinted at the creation of more films set in Middle Earth, though no specific films have been announced yet.

However, Embracer Group’s period of acquisitions and rapid growth is at an end. Now, the Lord of the Rings rights holder says that they’re cutting down on their investments in order to focus on cash flow. They stated that they wanted to lower their net debt and increase profitability. 

The current troubles for Embracer Group might spell trouble for the as-yet-unannounced Lord of the Rings films, but the open letter did not hint at any of its cost-cutting measures affecting films. Rather, the changes seem to be focused on the company’s many games studios, some of which may be closed down or sold off in order to save money. The company also announced that some games will be canceled, and some of its 17,000 employees will find themselves out of the job at the end of the year.

Since Embracer Group has no direct involvement in the creation of films, these layoffs and studio closures are unlikely to affect New Line Cinema’s plans to create new movies based on Lord of the Rings. Since New Line Cinema has already signed a multi-year agreement with Embracer Group, it’s hard to see how the shake-up inside the entertainment group would stop New Line Cinema from moving forward. The only possible exception is if Embracer Group chooses to sell Middle-Earth Enterprises — however, considering how lucrative the Lord of the Rings franchise has been in the past, it’s unlikely that Embracer Group would choose to take this route.

However, the same can’t be said for any Lord of the Rings games that Embracer Group has planned. With the failure of Daedalic Entertainment’s The Lord of the Rings: Gollum, the company might be reconsidering how much draw the franchise has among gamers. However, since much of the game’s failure can be explained by its poor review scores, Embracer probably realizes that focusing on a quality gaming experience will help regain the trust of Lord of the Rings fans.