Swedish gaming conglomerate Embracer Group has announced plans to buy Middle-earth Enterprises, which would give it the rights to the foundational fantasy texts "The Lord of the Rings" and "The Hobbit," both written by J.R.R Tolkien.
The purchase gives Embracer the rights to movies, video games, board games, merchandising, theme parks and stage productions relating to either property — valuable rights given the massive and ever-growing popularity of the Lord of the Rings. Exactly how valuable is unknown, as Embracer and The Saul Zaentz Company, which owned Middle-earth Enterprises, did not disclose financial terms of the deal for "commercial reasons," per a press release.
But Embracer already has ideas for how to flex its new rights, including "additional movies based on iconic characters such as Gandalf, Aragorn, Gollum, Galadriel, Eowyn and other characters from the literary works of J.R.R. Tolkien," among others.
When the deal closes, Middle-earth Enterprises will be part of the operative group Embracer Freemode, but will operate independently under its existing leadership team.
The deal does not include publishing rights to the books themselves, or to Tolkien's other Middle-earth works, including "The Silmarillion" and "The Unfinished Tales of Numenor and Middle-earth." Those remain in the hands of the Tolkien estate and HarperCollins. However, Embracer now has matching rights to those works, which means if the Tolkien estate and HarperCollins receive an offer for those rights, Embracer is guaranteed the chance to match that offer.
The deal also excludes television rights for shows shorter than eight episodes. This unusual exception allowed Amazon to deal with the Tolkien estate directly rather than with Middle-earth Enterprises when it purchased rights for its series "The Lord of the Rings: The Rings of Power" in 2017. Still, Embracer says Middle-earth Enterprises has a "financial interest" in the show, and in the upcoming Warner Bros. animated film "The War of the Rohirrim" and EA's in-development mobile game Heroes of Middle-earth (H/T Polygon).
Middle-earth Enterprises was one of several acquisitions Embracer announced Wednesday night. Others included Tripwire Interactive (Killing Floor, Maneater), physical release distributor Limited Run Games, Tuxedo Labs (Teardown), vocal effects company Singtrix, Japanese arcade game studio Tatsujin, and another unnamed "PC/console gaming" studio. Purchase prices were again withheld for commercial purposes, but that last studio is said to be "in the range of being among either third or fourth largest of the transactions."
A financial disclosure from Embracer said the combined cost of the acquisitions lands around 8.2 billion Swedish krona, which equates to roughly $788 million. That's much less than the $2 billion expected for the Lord of the Rings and Hobbit rights alone, per February reporting by Variety, possibly because of the various limitations on the rights.
Embracer previously entered a deal with Square Enix to acquire Crystal Dynamics, Eidos Montreal, Square Enix Montreal, and the IP those studios are known for, including Tomb Raider, Deus Ex and Thief. That deal is expected to close in September.
This article was originally published on dbltap as Embracer Group Acquires Rights to Lord of the Rings, Hobbit IPs.
