The Power of Evergreen IP: ‘Lord of the Rings’ Boosts Embracer Group

In August 2022, Embracer Group, through its subsidiary Freemode, entered into an agreement to acquire Middle-earth Enterprises, a division of The Saul Zaentz Company, which owns an intellectual property catalog and worldwide rights to motion pictures, video games, board games, merchandising, theme parks and stage productions relating to the fantasy literary works, “The Lord of the Rings” trilogy and “The Hobbit” by J.R.R. Tolkien, as well as matching rights in other Middle-earth-related literary works authorized by the Tolkien Estate and HarperCollins, which are yet to be explored.

One year after the announcement, Embracer Group reported its net sales had increased by 47%.

“The high margin is primarily explained by a strong contribution from Middle-earth Enterprises, driven by strong licensing revenue for ‘The Lord of the Rings,’” the report said. “The performance of Middle-earth Enterprises is well ahead of the business plan developed at the time of acquisition a year ago. It is encouraging to see many exciting external projects based on this incredible IP, including the recently successfully released Magic the Gathering trading card game The Lord of the Rings: Tales of Middle-earth, the upcoming PC/Console survival-crafting game “The Lord of the Rings: Return to Moria” as well as many other exciting new products that will grow the IP further.”

Embracer’s operative group, Asmodee Group, was one of the most successful licensees of “The Lord of the Rings” and “The Hobbit” through board games and card games, having published more than a dozen games with more than 100 expansions since the release of “The Lord of the Rings” board game more than 20 years ago, including “The Lord of the Rings”: The Card Game and “The Lord of the Rings”: Journeys in Middle-earth, a fully-cooperative, app-supported board game set in J.R.R. Tolkien’s land of Middle-earth.

Middle-earth Enterprises also has financial interests in the Amazon series, “The Lord of the Rings: Rings of Power,” which is set for a second season; the animated movie, “The Lord of the Rings: The War of the Rohirrim” (Warner Bros.), set for release in 2024 and the mobile game “The Lord of the Rings: Heroes of Middle-earth” (Electronic Arts), which released in May. Other opportunities include exploring new movies based on characters, such as Gandalf, Aragorn, Gollum, Galadriel, Eowyn and others from the literary works of J.R.R. Tolkien.

This evergreen IP has proved fruitful for Embracer Group. However, the company is facing a restructure, so it’s unclear what will happen next for Middle-earth Enterprises. License Global will offer updates as news breaks.