May 22 (Reuters) - Tomb Raider owner Embracer

is leaning on its back catalogue to maintain cash

flow while fewer AAA games are being released, but this is not a

long-term shift, CEO Lars Wingefors said on Thursday.

As game development becomes slower, riskier and more

expensive, studios are facing growing pressure to justify their

budgets for major releases in a market where consumer sentiment

and profitability are wearing thin.

"I think it's more important than ever to make sure the game

is polished because it's very hard to repair a buggy or

unfinished product," Wingefors told Reuters.

French peer Ubisoft showed a similar approach with

its newest Assassin's Creed game, which debuted with positive

reviews on Steam after being delayed twice.

Gaming groups thrived during COVID lockdowns, but delays and

weak demand have hit Embracer's new titles, pushing it to lean

on older games seen as a safer bet amid faltering blockbusters.

It has sold studios to cut costs and manage debt in recent

years, and is now splitting into three listed companies.

On Thursday, it forecast slight revenue growth and broadly

unchanged earnings for its fiscal 2025/26, and said that

realistically, at least one of its nine AAA game releases slated

for the following two financial years would be pushed back,

without specifying titles.

GAME DELAYS SHAKE INDUSTRY PROFITS

Studios are pouring time and money into increasingly complex

games, but returns are hit-or-miss and long delays mean many

will not see cash back until much later.

On top of it, fewer games break through and slower cash

generation strains studios, which has made older titles a more

attractive and dependable revenue stream for some.

Ubisoft recently delayed key titles and pushed profitability

expectations to 2026, underscoring sector challenges in

converting content into cash.

It told Reuters it planned to be more selective and turn

blockbusters into "evergreen" franchises that generate steady

revenue long after launch.

"We will still look to create some new IPs, but will be more

discerning in favour of gameplay breakthroughs based on

disruptive or emerging technologies," Ubisoft said.

Wingefors also said that tools like AI could boost

efficiency over time in minor titles, with the industry rapidly

adopting them to improve energy gains and technology sales.

($1 = 9.5615 Swedish crowns)