“Lord of the Rings” owner Embracer told shareholders and investors that the fantasy franchise, which they snapped up last summer for $395 million, has been a significant growth driver in Q1.

Embracer’s Entertainment & Services section has grown organically by 70% according to the group’s latest results, largely thanks to Middle-Earth Enterprises, the holding company for the J.R.R. Tolkien rights. “The high margin is primarily explained by a strong contribution from Middle-Earth Enterprises, driven by strong licensing revenue for ‘The Lord of the Rings,’” the company, headed by co-founded and CEO Lars Wingefors.

According to Wingefors the acquisition is already ahead of “well ahead” of the business plan developed by the company at the time of the sale.

“It is encouraging to see many exciting external projects based on this incredible IP, including the recently successfully released ‘Magic the Gathering’ trading card game ‘The Lord of the Rings: Tales of Middle-Earth’, the upcoming PC/Console survival-crafting game ‘The Lord of the Rings: Return to Moria’ as well as many other exciting new products that will grow the IP further,” read the summary of the Q1 report, which covers the period from April-June 2023.

The performance of Middle-Earth Enterprises will provide some comfort for Embracer, which announced earlier this summer it was facing a large restructuring program including lay-offs and games studio closures after a three year buying spree. As well as Middle-Earth Enterprises, the Sweden-headquartered gaming group has bought dozens of gaming and media companies over the past three years, including publisher Dark Horse Comics, Japanese animation distributor Anime Ltd and the rights to the “Tomb Raider” franchise from Square Enix.

Following publication of the report, Wingefors is set to speak to shareholders and investors in a Q&A.

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