Embracer Group has announced a major restructuring of its business — which includes game cancellations, layoffs and selling or closing studios — in an attempt to reduce costs and make the business more efficient. The news comes in the wake of the company revealing that a deal that would have been worth $2 billion in revenue over six years fell apart, despite Embracer having a verbal agreement from its unnamed proposed partner.

It will take until March next year to complete the restructuring process. It's "too early to give an exact forecast" on how many of Embracer's nearly 17,000 workers will be impacted, CEO Lars Wingefors wrote in an open letter. 

"The actions will include, but not be limited to, closing or divestments of some studios and the termination or pausing of some ongoing game development projects," Wingefors wrote. "It will also include decreased spending on non-development costs such as overhead and other operating expenses. We will reduce third party publishing and put greater focus on internal [intellectual property] and increase external funding of large-budget games."

It is not yet clear which studios the company plans to close or sell. Embracer says the game cancellations are "almost entirely" for projects that haven't been announced and for which it projects low returns. "All announced significant releases will still be released as planned," Wingefors said. For instance, Crystal Dynamics, which is working on a new Tomb Raider game and helping The Initiative with Perfect Dark, says those projects won't be impacted by the changes.

Over the last several years, Embracer has vacuumed up a wide array of notable gaming companies and intellectual property rights. It bought Gearbox for $1.3 billion in 2021. Last year, Embracer acquired Crystal Dynamics, Eidos-Montreal and Square Enix Montreal (a studio that Embracer renamed shortly before closing it) in a $300 million deal that included the rights to the likes of Tomb Raider, Deus Ex, Thief and Legacy of Kain. 

Embracer last year secured the rights to The Lord of the Rings, which it plans to turn into “one of the biggest gaming franchises in the world.” According to IGN, the company's interim chief operations officer Matthew Karch told investors on Tuesday that "we know we need to be exploiting Lord of the Rings in a very significant fashion." Multiple LOTR games are in the works, including another attempt by Amazon at an MMO based in JRR Tolkien's universe.

Going forward, Embracer plans to establish a more comprehensive review process for investments in ongoing projects as well as potential new ones. Wingefors noted there will also be more accountability across the company to make sure "performance is in line with or exceeding current targets."

Wingefors ended the letter by noting some of the decisions Embracer makes as part of the restructuring will be "difficult" ones. However, he wrote, "we are doing this because we are confident that we will emerge a stronger, more efficient company setting out on a stable future to build even greater value across our many studios and fantastic portfolio of IPs."

Another day, another regulatory action against a major cryptocurrency company. The Securities and Exchange Commission has sued Coinbase, the biggest crypto asset trading platform in the US. It claims that Coinbase operated as an unregistered national securities exchange, broker and clearing agency. The SEC notes that brokers, exchanges and clearing agencies are usually separated in traditional securities markets, but said Coinbase "intertwines" their services.

The agency claimed that by failing to register as a broker, national securities exchange or clearing agency, Coinbase has prevented investors from having certain protections. Those include SEC inspections, safeguards against conflicts of interest and recordkeeping requirements. The agency argued that Coinbase doesn't qualify for any applicable exemptions from registration for any of the three functions. It accused the company of having made billions of dollars from the likes of transaction fees by "unlawfully facilitating the buying and selling of crypto asset securities" since at least 2019.

"You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great,” Gurbir S. Grewal, the director of the SEC’s Division of Enforcement, said in a statement. "As alleged in our complaint, Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them. While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled."

It was reported last July that the SEC was investigating Coinbase as to whether the company illegally sold unregistered securities. As The New York Times notes, news of the agency's complaint comes on the same day that Coinbase’s chief legal officer, Paul Grewal, is set to testify before a congressional committee in relation to a new draft bill that aims to bring in some crypto regulations.

In March, Coinbase said it received a notice from the SEC that agency staff had found potential securities law violations, but it was not provided with much detail. The company also claimed it "provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to."

On Monday, the SEC filed 13 charges against Binance and its CEO Changpeng Zhao. The agency claimed Binance skirted its own compliance measures and lied to investors and regulators. The SEC also claimed that Coinbase mishandled customer funds. In addition, the agency is involved in the government's case against FTX founder and former CEO Sam Bankman-Fried.

Meanwhile, Coinbase is facing regulatory action at the state level. A task force comprising state regulators from Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin resulted in a Show Cause Order being issued against the exchange. In a statement spotted by Cointelegraph, the Alabama Securities Commission accused the company of violating "the securities law by offering its staking rewards program accounts to Alabama residents without a registration to offer or sell these securities." It gave the company 28 days to show cause why it shouldn't be ordered to cease and desist from selling unregistered securities in the state.

Korean companies LG and Hyundai are teaming up to build a new EV battery cell manufacturing plant in the US and have signed a memorandum of understanding to invest $4.3 billion in the project. The companies will each hold a stake of 50 percent in the joint venture, which will start construction on the new plant in the second half of 2023. Their new manufacturing facility will be located in Savannah, Georgia, where Hyundai is also building its first all-EV factory in the US. The battery plant is expected to be operational by 2025 at the earliest. After it starts production at full capacity, it will be able to produce 30GHWh of battery every year, which is enough to support the production of 300,000 electric vehicles.

LG and Hyundai are just the latest companies to invest in US-based battery manufacturing facilities over the past couple of years. Toyota announced in 2021 that it will build a battery plant in the country as part of a $3.4 billion investment, while Ultium Cells (GM's and LG's joint venture) secured a $2.5 billion loan from the Energy Department for the construction of EV battery facilities. More recently, Ford announced that it's spending $3.5 billion to build a lithium iron phosphate battery plant in Michigan. Lithium iron phosphate, which can tolerate more frequent and faster charging, costs less than other battery technologies and could bring down the cost of EVs.

Other companies could follow suit, seeing as the Biden administration is pushing to bring more EV and battery manufacturing to the US. Last year, it launched the American Battery Materials Initiative, which will give 20 companies $2.8 billion in grants in hopes of encouraging manufacturers to start battery production stateside and making sure that the US won't be heavily dependent on "unreliable foreign supply chains."

Hyundai and LG believe that the new facility can help create "a stable supply of batteries in the region" and allow them "to respond fast to the soaring EV demand in the US market." Hyundai Mobis, the automaker's parts and service division, will be assembling battery packs using cells manufactured in the plant. The automaker will then use those packs for Hyundai, Kia and Genesis electric vehicles. 

Cryptocurrency exchange Binance reportedly mixed its revenue with customer funds at a US bank in 2020 and 2021. A source said to have direct knowledge of company finances told Reuters that commingling happened almost daily in Binance accounts at Silvergate Bank and concerned sums that ran into the billions.

The news agency said it reviewed records showing that, in February 2021, Binance mixed $20 million from a corporate account with $15 million from one into which customer funds were placed. Reuters noted that it found no evidence of client funds being stolen or lost. Still, under US financial regulations, customer money must be kept separate from business revenue.

Binance has denied commingling customer funds and its revenue. “These accounts were not used to accept user deposits; they were used to facilitate user purchases” of cryptocurrencies, Binance spokesperson Brad Jaffe told Reuters. “There was no commingling at any time because these are 100 percent corporate funds.” Jaffe added that users weren't depositing funds when they sent money to the account, but instead were purchasing BUSD, a stablecoin issued by Binance and Paxos that's pegged to the US dollar.

However, in late 2020 and during 2021, Binance's website is said to have stated that customer dollar transfers were "deposits" that were credited to trading accounts in BUSD. The site also reportedly informed users that they'd be able to "withdraw" deposits in USD. Former US regulators suggested to Reuters that the language "created the expectation that clients’ funds would be safeguarded in the same way as traditional cash deposits."

Binance is already in hot water with US authorities. In March, the Commodity Futures Trading Commission accused the company of operating in the US illegally and said it had broken several financial laws. In its complaint (PDF), the CFTC said Binance had "commingled funds." The agency is seeking permanent trading and registration bans against the defendants, who include Binance CEO Changpeng Zhao. In a blog post, Zhao claimed that Binance blocks US users on several bases, including nationality, IP address (including common VPN access points) and mobile carrier.

Earlier this month, reports suggested the Justice Department was investigating the company over potential violations of sanctions imposed on Russia. Binance also recently said it would exit Canada due to tighter cryptocurrency regulations.

If the prospect of a cryptocurrency exchange mixing customer and company funds sounds familiar, that's because it's one of the many crimes US authorities have accused FTX founder Sam Bankman-Fried of. Bankman-Fried has claimed he didn't knowingly commingle funds and has pleaded not guilty to fraud charges. On Tuesday, it emerged that federal prosecutors have accumulated over 6 million pages of evidence (including emails and Slack messages) as part of their criminal case against Bankman-Fried. 

FTX’s collapse late last year was triggered by a bank run on the company that Binance initiated. Binance planned to snap up FTX but pulled out of the deal after taking a look at the latter’s books.

You could be going on heists, stealing cars and competing in races in Grand Theft Auto VI sometime next year. Rockstar's parent company, Take-Two, has shared its projections for the future along with its yearly earnings report. And apparently, it's gearing up to release projects that it believes will take its "company to even greater levels of success." The company expects the titles it's releasing in the fiscal year 2025 to help it achieve $8 billion in net bookings, or the net amount of products and services sold. While it didn't explicitly name those titles, the Grand Theft Auto franchise has historically been one of Take-Two's biggest moneymakers. 

As IGN notes, Take-Two's net bookings for the previous fiscal year reached $5.3 billion, and it's thanks to the company's Zynga acquisition. Before that, it was earning around $3 billion a year. An almost $3 billion jump in net bookings is massive, and unless Take-Two is making another huge acquisition, GTA is the franchise that would enable it to achieve that goal. IGN asked Take-Two CEO Strauss Zelnick whether we're going to see GTA 6 as soon as next year, but the executive refused to confirm or deny it. 

Part of the company's press release reads:

"Looking ahead, Fiscal 2025 is a highly anticipated year for our Company. For the last several years, we have been preparing our business to release an incredibly robust pipeline of projects that we believe will take our company to even greater levels of success. In Fiscal 2025, we expect to enter this new era by launching several groundbreaking titles that we believe will set new standards in our industry and enable us to achieve over $8 billion in Net Bookings and over $1 billion in Adjusted Unrestricted Operating Cash Flow. We expect to sustain this momentum by delivering even higher levels of operating results in Fiscal 2026 and beyond."

Take-Two's fiscal year 2025 starts in April 2024 and ends on March 31st, 2025. Even if the Rockstar doesn't release GTA 6 in 2024, it could still be coming out in the first three months the year after. Bottom line: We don't have to wait that long for the game to arrive. Since 90 videos of GTA 6 gameplay footage leaked late last year, you probably already know what you can expect. The clips, which Rockstar confirmed as legit, showed two playable protagonists, including a female character named Lucia, committing crimes in a fictionalized version of Miami.

Electric vehicle brand Polestar plans to reduce its headcount by 10 percent as part of an effort to cut costs. It will also institute a global hiring freeze and it has trimmed production guidance for 2023. Polestar now expects to produce between 60,000 and 70,000 vehicles this year, down from the previous figure of 80,000.

The brand cited a delayed start to production of the Polestar 3 and "the economic environment affecting the automotive industry" as key reasons for the changes. The electric SUV is now expected to enter production in early 2024.

Polestar says Volvo (which, as Autoblog notes, is Polestar's vehicle producer and largest shareholder) needs more time for software development and testing of the new electric platform. Volvo has delayed the start of production of the EX90 for the same reason. Production is slated to start in the first half of next year.

There are no changes to the Polestar 4 schedule as things stand. Polestar expects to start production of that EV for China in the fourth quarter of this year and in early 2024 for other markets.

Polestar said in its latest earnings report that it delivered 12,076 cars in the first three months of 2023, an increase of 26 percent from a year earlier. More than 100,000 of the brand's cars are now out in the wild. Polestar's revenue rose to $546 million, up from $452.2 million a year earlier, while the net loss for the quarter was $9 million, compared with $274.5 million in Q1 2022.

There's enough cash in the kitty for Polestar to make it through this year, the company previously said. It received a $1.6 billion injection from Volvo and fellow major shareholder PSD Investment in November. Polestar had $884.3 million cash on hand as of March 31st, though it expects to need more funding over the next few years.

Other nascent EV players have also been struggling to manage their expenses. Last month, Lucid said it would lay off 1,300 workers to cut costs, accounting for 18 percent of the total workforce. Rivian has also laid off more than 1,000 workers since last summer.

A "one-app experience" that combines Disney+ and Hulu content will launch in late 2023, Disney CEO Bob Iger has announced during the company's latest earnings call. He said the company will continue offering Disney+, Hulu and ESPN+ as standalone options, but combining services "is a logical progression" of its direct-to-consumer offerings "that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content..."

Since Comcast still owns 33 percent of Hulu, this announcement suggests that Disney could be thinking of buying the cable TV and media company's stake. Iger didn't elaborate on the company's plans, though, and only said that Disney has had "constructive" talks with Comcast about the future of Hulu. 

In addition to announcing the combined streaming app, Iger has also revealed that Disney+ is getting another price increase after adding $3 on top of its ad-free streaming tier's monthly fee in December. He didn't say when the company is raising the service's prices, but when it does, the ad-free and ad-supported tiers will cost more than $11 and $8, respectively. 

While Disney reported (PDF) a 26 percent decrease in operating losses for its streaming business, a $659 million loss is still massive. The price hike's announcement didn't come out of nowhere, seeing as the company promised investors that the business will be profitable by the end of the 2024 fiscal year. The question is whether the combined Disney+ and Hulu app could convince new users to pay for a subscription — or for old subscribers to come back. Disney+ lost 4 million subscribers in the first quarter of 2023 after shedding 2.4 million users in the previous quarter.

After selling 23 million Switches two years ago and 18 million in the last year, Nintendo expects demand for the aging console to continue to fall. It's forecasting sales of 15 million for next year (fiscal year 2024) and isn't even confident of that figure, the company announced in its latest earnings report. "Sustaining the Switch’s sales momentum will be difficult in its seventh year," said President Shuntaro Furukawa in a call. "Our goal of selling 15 million unit this fiscal year is a bit of stretch." 

To achieve that, the company said that it will focus on selling second and even third consoles to people who already own one. "We try to not only put one system in every home, but several in every home, or even one for every person." 

For the last full year (fiscal 2023 for Nintendo), the company saw sales drop 5.5 percent from 1.695 trillion yen ($12.57 billion) to $1.601 trillion yen ($11.87 billion), while profit dropped 14.9 percent to 504.3 billion yen ($3.74 billion). Net sales for its last quarter were down 18 percent year-over-year to 306.5 billion yen ($2.27 billion), indicating that it's on a slippery downward slope. 

Switch sales for the quarter were 3.06 million (with exactly half being OLED Switch units), one of the company's worst sales quarters for the console to date. However, Nintendo did predict this would happen, saying last year at this time that it expected sales of the console to keep slowing down. 

That's to be expected for a six-year-old console that has sold extremely well in its lifetime (125.62 million units, third best of all time) and effectively saturated the market. Consumers may also be waiting for the company's next-gen console, whatever that turns out to be.

Luckily for Nintendo, we're just days away from the new Zelda release, which will likely drive game sales and inspire extra console demand. It's not looking too good for the Switch overall though, especially next to Sony which just had a second consecutive blockbuster quarter, selling 6.3 million PS5s and easily beating its forecast of 18 million for the year. 

Apple had its second "bad" quarter in a row. Bad, of course, is a relative term — the company's revenues declined again, but Apple is still making a positively massive amount of money. Specifically, the iPhone and Services categories, both of which have been Apple's biggest money-makers for years now, saw revenue gains year-over-year. But this wasn't enough to offset declines everywhere else: the Mac, iPad, and Wearables / Home / Accessories divisions all shrank compared to this time a year ago. As such, Apple's overall revenue dropped a modest three percent year-over-year to $94.8 billion, while net income of $24.2 billion was down less than one percentage point. Like I said, not exactly a bad quarter, but given that the company's sales and profits almost always are up, it's worth noting when they aren't.

The strong iPhone sales (up two percent to $51.3 billion) marked a record the March-ending quarter, despite the fact that the iPhone 14 and 14 Pro arrived last September. And Apple's services business, which has been growing steadily over the past five years to surpass all other products the company offers (besides the iPhone, of course) hit another record with $20.9 billion in revenue (up five percent year-over-year). 

Mac sales plummeted from $10.4 billion a year ago to only $7.2 billion this quarter past, down 31 percent overall. That's less than IDC predicted a month ago when it said Mac sales dropped by 40 percent, but the general forecast of hugely diminished interest still rings true. iPad sales weren't hit as hard but still dropped 13 percent to $6.7 billion for the quarter despite major updates to the product lineup last fall. Finally, the wearables / home category, which encompasses products like AirPods, the Apple Watch and the HomePod lineup, dipped less than one percent, so there aren't any significant red flags around that. 

Apple CEO Tim Cook is kicking off the usual call with investors at 5PM ET, and we'll update this story with anything we learn. 

EV startup Lordstown Motors is still in trouble after pausing production earlier this year. The Endurance electronic pickup truck maker said today that it expects to stop producing the vehicle “in the near future” if it can’t find a partner to keep it afloat. The warning follows a separate filing from earlier this week saying it could file for bankruptcy if its deal with Foxconn can’t be resurrected.

“Due to the production delays from early January to mid-April 2023, the failure to identify a strategic partner for the Endurance, and extremely limited ability to raise capital in the current market environment, we anticipate production of the Endurance will cease in the near future,” the company wrote in today’s filing. “To date, we have not identified a strategic partner for the Endurance.”

According to the SEC filing, Foxconn sent a letter to Lordstown on April 21st, threatening to terminate the two companies’ investment deal, which saw the Taiwanese manufacturer investing up to $170 million in the startup. (That followed a previous deal where Foxconn bought its Ohio factory.) In the letter, Foxconn told Lordstown it breached the agreement because the startup’s stock price fell below $1 per share for 30 straight trading days, leading to a NASDAQ delisting notice. Lordstown said it believes Foxconn’s claims are without merit and considers their investment agreement to remain in effect while talks continue. However, it concedes that bankruptcy is on the table if it can’t resolve the dispute “in a timely manner on terms that allow us to continue operating as planned” or find other strategic partners.

Lordstown reported a net loss of $171.1 million in the first quarter of this year, following a loss of $89.6 million in the same quarter a year ago. The EV maker had just $108.1 million in cash (and cash equivalents) on March 31st. Its stock price is currently hovering at 39 cents after peaking at $31.57 in early 2021.

It’s been a short but bumpy ride for Lordstown, which was only founded in 2018. Two years ago, its CEO resigned after an investigation revealed that executives lied about demand, the viability of Endurance’s technology and its ability to start production on schedule by September 2021. The same year, it became the subject of DOJ and SEC investigations. GM sold its stake in the company last March, although Lordstown did finally begin delivering the first trucks from its initial 500-unit order in November. However, it then froze production in February to address “performance and quality issues” and partnered with the National Highway Traffic Safety Administration (NHTSA) on a voluntary recall to remedy a connection problem that could cut off motor output while driving.