Arc Games officially became an independent publisher on December 1, 2025, after completing a management buyout from Embracer Group. The deal, valued at approximately $30 million and financed by Chinese gaming company XD Inc., ends Arc Games’ tumultuous journey through multiple corporate owners and rebrands over the past three years. CEO Yoon Im and the existing team retain their positions as the publisher enters what they’re calling a major new strategic chapter focused on AA and indie titles.
The independence comes with strings attached. While Arc Games retains control of major live service titles like Star Trek Online and Neverwinter, Embracer kept the publishing rights to the Remnant franchise, which transfers to THQ Nordic, and Fellowship, which moves to Coffee Stain Group when it spins off from Embracer in mid-December. Arc Games will maintain co-publishing credits on these titles but won’t control their future publishing decisions, creating an unusual arrangement where they’re credited but not in charge.
The Convoluted Corporate History
Understanding how Arc Games reached this point requires tracking a corporate identity crisis spanning multiple years. The company started life in 2008 as Perfect World Entertainment, the North American publishing arm of Chinese developer Perfect World. They built a portfolio around free-to-play MMOs and acquired developer Cryptic Studios, which created Star Trek Online, Champions Online, and Neverwinter.
In December 2021, Embracer Group purchased Perfect World Entertainment during its acquisition spree and merged it into The Gearbox Entertainment Company, rebranding it as Gearbox Publishing San Francisco. Then in March 2024, Embracer announced plans to sell Gearbox to Take-Two Interactive for $460 million, but Gearbox Publishing San Francisco was retained by Embracer rather than included in the sale.
After the Gearbox sale closed, the retained publishing division needed a new identity since it couldn’t keep the Gearbox name. In April 2024, it rebranded to Arc Games, distancing itself from both the Perfect World and Gearbox brands. Now, less than eight months after that rebrand, Arc Games split from Embracer entirely through the management buyout.
Who Owns What Now
The $30 million deal creates a new entity called Project Golden Arc, owned and led by the Arc Games management team with financing provided by XD Inc. This structure means Arc Games leadership actually owns the company rather than answering to external corporate overlords, though XD Inc.’s financial backing gives the Chinese publisher significant influence over future decisions.
Arc Games retains full ownership and publishing control of Star Trek Online and Neverwinter, both developed by Cryptic Studios, which was included in the sale. These live service MMOs have operated for over a decade, generating steady revenue through microtransactions and expansions. Maintaining these titles makes strategic sense since they represent Arc’s most reliable income sources.
The Remnant franchise tells a more complicated story. Arc Games published both Remnant: From the Ashes (2019) and Remnant 2 (2023), but THQ Nordic owned developer Gunfire Games since 2019 and held the IP rights all along. The buyout simply transfers publishing responsibilities from Arc to THQ Nordic, reuniting the franchise under one corporate umbrella. Arc Games will retain co-publishing credits on existing Remnant titles but won’t be involved in future entries.
The Fellowship Situation
Fellowship, a cooperative fantasy extraction game from developer Chief Rebel, launched in 2025 with Arc Games as publisher. Under the buyout terms, publishing rights transfer to Coffee Stain Group, which is spinning off from Embracer as an independent entity in mid-December 2025. Arc Games retains a co-publishing credit similar to the Remnant arrangement.
This timing creates an unusual scenario where Fellowship’s publishing rights move twice in quick succession – first from Arc to Coffee Stain while both are Embracer subsidiaries, then immediately to independent Coffee Stain after the spin-off completes. The developers at Chief Rebel probably feel whiplash from having three different corporate publishers in the span of weeks.
Other Arc Games titles like Torchlight III, Hyper Light Breaker, Have a Nice Death, and various Perfect World MMOs remain under Arc’s control. The portfolio focuses on AA and indie releases rather than AAA blockbusters, positioning the publisher in the space between major publishers and tiny indie labels.
What XD Inc. Gets From This
XD Inc., the Chinese gaming company providing financing for the buyout, gains strategic access to Western markets through Arc Games’ established publishing infrastructure. XD Inc. is publicly traded on the Hong Kong Stock Exchange and has been expanding internationally beyond its home market, making Arc Games an attractive investment.
The financial arrangement wasn’t fully disclosed, but financing a $30 million management buyout typically means XD Inc. either provided loans requiring repayment with interest or took equity stakes giving them ownership percentages. Either way, XD Inc. now has influence over Arc Games’ strategic decisions and access to their publishing expertise, developer relationships, and market knowledge.
For Arc Games, XD Inc.’s backing provides financial stability and potential access to Chinese gaming markets where Western publishers often struggle. The partnership could enable localization and publishing of Arc’s titles in China through XD Inc.’s established channels, expanding revenue opportunities beyond North America and Europe.
CEO Yoon Im’s Vision
In the official announcement, CEO Yoon Im expressed appreciation for Arc Games’ time under Embracer while emphasizing excitement about independence. He stated: “This milestone marks a major new chapter for Arc Games. We appreciate our time being part of Embracer Group and the accomplishments achieved since the company’s inception over 15 years ago. These experiences have shaped who we are today.”
He continued with forward-looking statements about the publisher’s plans: “As an independent publisher, we are now positioned to more fully pursue our vision – collaborating with exceptional developers worldwide and bringing standout games to market. 2026 is already shaping up to be one of the most ambitious and innovative years in our history, and we are excited for what lies ahead.”
The emphasis on independence and pursuing their vision suggests Arc Games felt constrained under Embracer’s ownership. During Embracer’s restructuring period following their failed Saudi Arabia investment deal, subsidiaries faced budget cuts, project cancellations, and strategic uncertainty. Independence removes those corporate pressures, allowing Arc Games to make publishing decisions based on their own strategic goals rather than fitting into Embracer’s constantly shifting priorities.
What This Means for Developers
Arc Games immediately positioned itself as open for business, calling for new partnerships with developers looking to bring their games to market. Independence potentially makes them more attractive to indie and AA developers who want publishers that can make quick decisions without navigating byzantine corporate approval processes.
The publisher’s track record includes both successes and failures. Remnant 2 sold extremely well and received strong critical reception, proving Arc can market and support mid-sized releases effectively. Star Trek Online and Neverwinter remain profitable over a decade after launch, demonstrating long-term live service expertise. On the other hand, titles like Torchlight III disappointed fans and underperformed commercially compared to the beloved Torchlight II.
Developers considering Arc Games as a publisher now need to evaluate their financial stability under XD Inc. backing, their reduced portfolio after losing Remnant and Fellowship, and their ability to support new projects while maintaining legacy live service titles. The small team structure could mean more personalized attention but also limited resources compared to major publishers.
Embracer’s Endless Restructuring
The Arc Games sale represents another piece of Embracer Group’s ongoing restructuring following the collapse of their $2 billion Saudi Arabia investment deal in 2023. Since then, Embracer has been systematically divesting studios, canceling projects, and laying off thousands of employees in an attempt to return to financial stability.
Recent divestitures include Gearbox Software to Take-Two Interactive, Saber Interactive through a management buyout, and numerous smaller studios shut down or sold. Coffee Stain Group is spinning off as independent in December 2025, taking popular titles like Satisfactory and Goat Simulator with them. The company that once seemed intent on buying everything is now desperately trying to shed weight and focus on fewer, more profitable operations.
For Arc Games, escaping this chaos provides stability even if it means losing publishing rights to some franchises. Embracer’s constant restructuring creates uncertainty that makes long-term planning difficult. Being independent with backing from XD Inc., a company not currently imploding, offers more predictable business conditions for the management team and their developers.
The Live Service Question
Arc Games’ portfolio leans heavily on live service titles that require ongoing development and community management. Star Trek Online launched in 2010, Neverwinter in 2013, and both remain active with regular content updates and engaged player bases. Managing these games requires dedicated resources that could limit Arc’s ability to take on numerous new publishing projects simultaneously.
The advantage is that live service games provide steady revenue streams funding other operations. The disadvantage is they’re resource-intensive and can’t be abandoned without angering communities that have invested years and potentially thousands of dollars. Arc Games must balance supporting legacy titles while pursuing new partnerships and projects.
Their 2026 plans apparently include multiple unannounced titles and new publishing partnerships, suggesting they’re confident in their ability to manage both ongoing support for existing games and expansion into new releases. Whether XD Inc.’s backing provides enough resources to accomplish both remains to be seen.
Community and Employee Reactions
Reddit discussions about the announcement expressed cautious optimism mixed with confusion about the publishing rights arrangements. Players of Star Trek Online and Neverwinter seemed relieved the games remain under Arc’s control rather than being sold to publishers with no experience managing decades-old MMOs.
Some confusion emerged around what Arc Games actually retains after losing Remnant and Fellowship publishing rights. The co-publishing credit arrangement isn’t typical – usually when publishers split from franchises, they lose all involvement rather than maintaining credits. This suggests contractual obligations or revenue-sharing agreements that keep Arc tangentially connected to these titles.
Employees haven’t publicly commented on the buyout, but management-led buyouts typically benefit staff by giving them leadership that’s directly invested in the company’s success rather than distant corporate executives viewing them as line items on quarterly reports. The retention of existing organizational structure and full team suggests no immediate layoffs are planned.
FAQs
When did Arc Games become independent?
Arc Games completed its management buyout from Embracer Group on December 1, 2025, officially establishing itself as an independent publisher with financing support from Chinese gaming company XD Inc.
How much did the Arc Games buyout cost?
The deal was valued at approximately $30 million, with Embracer Group receiving that amount in net cash proceeds after transaction costs. XD Inc. provided financing for the management team to complete the purchase.
What games does Arc Games still publish?
Arc Games retains full publishing control of Star Trek Online, Neverwinter, Champions Online, Torchlight series, Hyper Light Breaker, Have a Nice Death, and various Perfect World MMOs. They lost publishing rights to Remnant (going to THQ Nordic) and Fellowship (going to Coffee Stain).
What happened to Cryptic Studios?
Cryptic Studios was included in the sale to Project Golden Arc, meaning it remains under Arc Games’ ownership. The developer continues working on Star Trek Online, Neverwinter, and Champions Online.
Who owns the Remnant franchise now?
THQ Nordic owns both the IP rights and publishing rights for Remnant. The developer Gunfire Games has been a THQ Nordic subsidiary since 2019. Arc Games maintains a co-publishing credit on existing Remnant titles but won’t publish future entries.
What is XD Inc.’s role in Arc Games?
XD Inc., a Chinese gaming company publicly traded on the Hong Kong Stock Exchange, provided financing for the $30 million management buyout. The exact financial arrangement (loans vs. equity stakes) wasn’t fully disclosed, but XD Inc. likely has significant influence over Arc Games’ strategic decisions.
Was Arc Games previously Perfect World Entertainment?
Yes. The company started as Perfect World Entertainment in 2008, became Gearbox Publishing San Francisco in 2021 after Embracer acquired it, then rebranded to Arc Games in April 2024 after Embracer sold Gearbox to Take-Two but retained the publishing division.
Will Arc Games publish new titles?
Yes. CEO Yoon Im stated that 2026 is shaping up to be one of their most ambitious years, with unannounced titles in development and calls for new partnerships with developers seeking AA and indie game publishers.
Conclusion
Arc Games’ journey from Perfect World Entertainment to Gearbox Publishing San Francisco to Arc Games and finally to independence reads like a case study in modern gaming industry consolidation and collapse. After three years of corporate reshuffling, multiple rebrands, and existing under Embracer Group’s chaotic restructuring, the publisher finally controls its own destiny through the management buyout financed by XD Inc. The $30 million deal preserves their most valuable assets – Star Trek Online, Neverwinter, and the Cryptic Studios development team – while transferring publishing responsibilities for Remnant and Fellowship to publishers better positioned to support those franchises. Losing those titles stings, but keeping co-publishing credits suggests Arc negotiated favorable terms maintaining some connection and potentially revenue sharing from future sales. CEO Yoon Im’s statements emphasize freedom to pursue their vision collaborating with exceptional developers worldwide, which sounds like standard corporate speak but probably reflects genuine relief at escaping Embracer’s endless restructuring cycles. The XD Inc. backing provides financial stability and potential access to Chinese markets, though it also means answering to new corporate interests with their own strategic priorities. For developers considering Arc Games as a publisher, the independence offers potential advantages in decision-making speed and focused attention, balanced against questions about resources and capacity while managing legacy live service titles. The gaming industry’s consolidation phase is giving way to fragmentation as companies like Arc Games, Coffee Stain, and Saber Interactive break free from collapsing conglomerates. Whether this trend produces healthier, more sustainable publishers or just creates smaller companies that get acquired again in the next consolidation wave remains to be seen. For now, Arc Games enters 2026 as an independent entity with plans for ambitious growth, established franchises generating steady revenue, and partnerships they hope will define their future beyond the corporate chaos of their past.