Tarsier Studios, the development studio behind Little Nightmares and the Nintendo Switch surprise title The Stretchers has been acquired by Embracer Group. Despite the acquisition, the studio is still able to continue working on Little Nightmares 2 but will be moving onto new IPs in the near future.

Embracer Group acquired Tarsier Studios for SEK 99 million. SEK 88 million ($9.34 million in cash and SEK 11 million ($1.17 million) in B-shares. In addition, there is a conditional earn-out that is payable over ten years to "certain sellers who will remain with Tarsier."

The acquisition gives Embracer Group ownership of its IP rights but the Little Nightmares brand is owned by Bandai Namco and The Stretchers is owned by Nintendo. The development team of 65 employees will be retained also as well as Tarsier Studios being able to govern themselves within the sub-group Goodbye Kansas Game Invest.

Studio head at Tarsier Studios, Andreas Johnsson says "We look forward to the opportunity to continue making exceptionally great games together with Embracer Group" while Lars Wingefors, co-founder of Embracer Group says "We look forward to, together with management and all of Tarsier’s employees, embrace the quality and creativity the Studio has, and take the Studio to the next level.“

The studio will continue development on development projects such as Little Nightmares 2 but will move on to new IPs in the future with Embracer Group and Goodbye Kansas Game Invest acting as owners, financers, and publishers of these new IPs.

Embracer Group is a Swedish video game holding company that was previously known as Nordic Games Publishing AB from 2008 until 2016. They were then known as THQ Nordic AB  from 2016 until they rebranded earlier this year in September. The company owns THQ Nordic, Koch Media and Coffee Stain to name a few.