It’s Time for Amazon to Embrace the Obvious

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Amazon’s plan to reportedly create a multimedia universe for video game franchise “Tomb Raider” may register as too late for IP that’s never been as prominent in film as it has in games.

But nearly a year after the company closed its $8.5 billion deal to acquire MGM, such a development is a crystal-clear opportunity to partner with a company that’s just as active in M&A: Embracer Group.

Having already acquired gaming publishers and studios for years, the Swedish holding company closed pivotal deals in 2022. Its acquisition of Dark Horse Comics provided hundreds of additional IP rights before Embracer bought Crystal Dynamics and Eidos-Montréal from Square Enix, granting Embracer control of “Tomb Raider’s” original gaming rights that Amazon is now licensing alongside additional film and TV rights from dj2 entertainment.

Crystal Dynamics already announced a new “Tomb Raider” game was in development before joining Embracer and setting up the game at Amazon. But having it belong to a shared narrative universe with film and TV projects is an unusual move within the gaming business.

Looming larger than “Tomb Raider” is “The Lord of the Rings,” whose media rights are now owned by Embracer via its deal to acquire Middle-earth Enterprises in August. The terms of the deal were never disclosed, but the rights to J.R.R. Tolkien’s works aren’t exactly cheap.

“The Lord of the Rings: The Rings of Power” began streaming on Prime Video in 2022 and is the most expensive TV series in history, with around $250 million of its $1 billion price tag due to licensing fees alone. Should Amazon want to release “Lord of the Rings” films through MGM, it would have to do so through Embracer, though Middle-earth Enterprises would first need to reach some kind of agreement with Warner Bros. Discovery. Per CEO David Zazlav, New Line still has the film-rights license.

Plus, Amazon isn’t exactly a stranger to working with video game and comics IP. A TV series adaptation of the “Fallout” franchise for Prime Video has been in production since last summer, while popular Prime series “The Boys” and “Invincible” both originate from comics IP.

Likewise, the next major game from the Embracer family, Deep Silver’s “Dead Island 2,” is due in April. Much like PlayStation’s “The Last of Us” and its HBO adaptation that concludes its first season in March, “Dead Island 2” is a zombie game set in L.A. that could be an easy way for any streamer to capitalize on the massive popularity of “The Last of Us,” should the game draw a substantial audience.

Amazon’s own gaming unit is at a crossroads and could use some extra heft.

Analysts project slow but steady growth for cloud gaming even as the space has shrunk on account of Google shutting down Stadia in January. Amazon has yet to fully double down on its own cloud offering via Luna, as its own first-party offerings like “New World” are still absent from the service.

While it’s still publishing the “Tomb Raider” game from Crystal Dynamics and another game with “Elden Ring” publisher Bandai Namco, first-party development has also taken a hit amid John Smedley’s departure in January that capped a six-year stint in which no projects of his were released.

If Amazon could benefit from a widened Luna catalog and hundreds of IP options to work with on the film and TV side, and Embracer needs more financial backing to cover its own extensive operations, this seems like an obvious partnership. “Tomb Raider” may be the test drive for such a pairing, but when “Lord of the Rings” is now a major and expensive presence for both entities, why wait to seal the deal?