Piranha Bytes reportedly faces either closure or sale from Embracer Group

Update (January 22)

Piranha Bytes has posted a statement on the company's official Twitter account. While not offering specifics about timings or other details, the studio confirms they are 'in a difficult situation'.

The statement can be found in full below, followed by the original version of this article.

Dear fans, 

Yes, it's true. We, Piranha Bytes, are in a difficult situation. There are a lot of news about us circulating right now and this is our answer: Don't write us off yet! 

We do everything to continue creating worlds in which you can lose yourself. This is what our hearts have always beaten for. 

We are convinced that we will succeed. We are creative minds and there's no lack of ideas! We stick together, no matter what. 

Now, we are focussing on this goal with all our strength and do whatever it takes to find a partner for this project. As soon as there are any news, we will share them with you. Thank you very much for your continuous support! 

Your Piranhas 

Original (January 18)

Piranha Bytes, the German studio behind the Gothic, Risen, & Elex series, reportedly faces either closure or sale from Embracer Group.

While the health of the longstanding developer was already beginning to be questioned, due to inactivity on the studio's YouTube channel and a non-functional website, new information comes from a newly uploaded special episode of German podcast "The Pod" (gamespodcast.de), ran by André Peschke (former video editor-in-chief at GameStar) and Jochen Gebauer (former print editor-in-chief at GameStar). GameStar is the biggest German-speaking games magazine and website.

In the podcast, Peschke and Gebauer discuss what they have learned about the current status of Piranha Bytes. The podcast is only available in German, but a German-speaking acquaintance of RPG Site provided a summary of the discussion, which we've shared below, edited for clarity.

• Embracer mandated the closure of Pirahna Bytes in November 2023.
• THQ Nordic - the Embracer operating group that houses Piranha Bytes - tried to fight off the closure and managed to strike a deal that was supposed to at least give the studio's management more time to find a new publisher or buyer.
• However, this only delayed employees receiving their termination notices by a month. Employees received termination notices in December 2023 instead of November. 
• Piranha Bytes is still looking for a new publisher/buyer, but there's little up-to-date information about the current state of things.
• Björn Pankratz (a creative lead at Piranha Bytes) left the studio in November amidst lingering creative differences with the team. The team wished for a more collaborative creative environment, but Björn was supposedly not very receptive to ideas other than his own. There seems to have been the general sentiment that the team would rather work on a new Gothic or Gothic-like instead of Elex 3. But Björn wasn't interested in returning to Gothic, and considers Elex his baby.
• THQ Nordic says that, if Piranha Byte's management finds a way to continue (via new buyer or publisher), they can keep both the Piranha Bytes name as well as the rights to Elex. According to the hosts, it's in Embracer's interest that Piranha Bytes finds a new partner, since layoffs take a long time in Germany and often end up in court.
• It's very unlikely that Piranha Bytes would be able to keep the Gothic IP.
• Elex II underperformed, but from what the hosts understand, that wasn't the primary factor as to why Piranha Bytes is on the chopping block. Embracer's mandate is that all teams that work on projects that are still far off should be a candidates for layoffs/closure. They want to focus on projects that will generate revenue in the near term, since they are lacking the funds to continue funding long development cycles. Elex 2 underperforming didn't help, but the company is aware that it had an unfortunate release date.

Gamestar.de has also posted an update, confirming via sources that the studio is on the verge of closure and that work on new titles has stopped. Gamestar notes that, due to German law, employee dismissal is a much longer process compared to other countries in the world, so Piranha Bytes may technically still exist in the meantime, if only on paper. Gamestar also notes that THQ Nordic declined to provide comment.

Here's a very short summary of the situation regarding Embracer Group, which you may have seen over the last few months if you've been paying attention to Embracer-related headlines in the industry. In May 2023, Embracer announced that a two billion USD investment deal unexpectedly fell through. In June 2023, Embracer announced a restructuring program that would result in layoffs and studio closures. In August 2023, Axios reported that the partner of the now-canceled investment was the Saudi-backed Savvy Games Group. In the time since, we've seen Embracer close Volition, Free Radical, & Campfire Cabal entirely, alongside reported layoffs at 3D Realms / Slipgate Ironworks, Fishlabs, Asmodee, Beamdog, Gearbox Publishing, Rainbow Studios, Cryptic Studios, New World Interactive, and possibly more.

Embracer Group acquired Piranha Bytes in 2019, back when the holdings company was named THQ Nordic AB. The holdings company changed its name to Embracer Group later that year to avoid confusion with THQ Nordic GmbH, one of Embracer's subsidiary companies.

Piranha Byte's most recent title is Elex II, released in March 2022. While 2017's original Elex received some positive word-of-mouth from fans of European-style roleplaying games, its sequel seemed to struggle to find a similar reception, which our own review found mostly disappointing. Embracer stated after launch that the RPG failed to meet expectations.

It's also worth noting that the upcoming Gothic Remake is unaffected by this situation, as it is in development at Barcelona-based Alkimia Interactive, also under THQ Nordic.

If more information about the potential closure surfaces in the coming days, we'll update this post.