May 20 (Reuters) - Warhorse Studios, owned by video game group Embracer, is developing an open-world role-playing game set in the world of the Lord of the Rings, Embracer's chief executive said on Wednesday.

The game will be set in the fictional world of Middle-earth, CEO Phil Rogers said in a post-earnings call.

"Just thinking about one of the biggest and most beloved IPs in the world being developed here in Prague is honestly mind-blowing," Warhorse Studios' communications director Tobias Stolz-Zwilling said in a LinkedIn post.

The Czechia-based studio is also working on another game in its Kingdom Come: Deliverance franchise, Rogers said.

The franchise's previous title, "Kingdom Come: Deliverance II", won a BAFTA game award for best narrative and PC Gamer magazine's Game of the Year for 2025. Its sales surpassed 5 million copies within the first year of release, Embracer said in its third-quarter report in February.

Rogers did not specify a development timeline for either of the games. Warhorse Studios declined to comment when contacted by Reuters.

Embracer said on Wednesday it was planning one more spin-off after last year's three-way split.

Kingdom Come: Deliverance, together with Embracer's other flagship IPs like the Lord of the Rings, will become a part of the newly formed Fellowship Entertainment, set to be listed in Stockholm in 2027.