In his office, Lee Guinchard has a bunch of paraphernalia honoring J.R.R. Tolkien and his works The Hobbit and The Lord of the Rings.
He proudly points out books that have sold more than 265 million copies, LOTR card games from Magic: The Gathering that have generated more than $200 million for licensee Hasbro and the original LOTR postcards from the United Kingdom that he would send to his grandmother as a kid.
But Guinchard is not just another Tolkien nerd like me. He’s the CEO of Embracer Freemode (soon to be spun off as part of a public company called Middle-earth Enterprises & Friends) and he’s in charge of the Tolkien franchise. Mind you, he’s not in control of the books like The Silmarillion, which are the domain of the Tolkien Estate, the family heirs who inherited the beloved property after Tolkien passed in 1973.
Rather, Embracer Freemode is the owner of Middle-earth Enterprises, one of the intellectual property treasures that Embracer Group CEO Lars Wingefors acquired for around $395 million from the Saul Zaentz Company in August 2022. While the vast Tolkien holdings are spread out in a sense, Middle-earth Enterprises has the worldwide rights to films, video games, board games, merchandising, theme parks and stage productions. We talked about what it means for Embracer Freemode to own the Tolkien rights in an exclusive interview. Guinchard understands the gravity of the work. (See our explainer story on the Tolkien rights here).
Lil Snack & GamesBeat
GamesBeat is excited to partner with Lil Snack to have customized games just for our audience! We know as gamers ourselves, this is an exciting way to engage through play with the GamesBeat content you have already come to love. Start playing games now!
Guinchard believes that the vast IP presents big opportunities for further exploration and expansion. And with the support of world-class creators, Guinchard wants to develop a multi-platform franchise that delves deeper into the lore and characters of Middle-earth, keeping Tolkien’s universe alive for new generations of fans. The goal is to reach billions of people, not just millions of people.
“The fans who experience this see it as the greatest world ever made outside of our own,” Guinchard said.
This week, Warner Bros. Discovery CEO David Zaslav said there is a new Peter Jackson movie on The Lord of the Rings coming in 2026. He said Jackson and his longtime writing partners Fran Walsh and Philippa Jane Boyens are in the early stages of script development for the film. It’s called The Lord of the Rings: The Hunt for Gollum.
Zaslav said that the Harry Potter. The Lord of the Rings, Superman and other parts of the DC Universe are largely underused, and Warner Bros. Discovery is in the midst of fixing that.
“We have the characters and stories people love and yearn for everywhere in the world,” Zaslav said.
Christopher Tolkien, the late son of the author, led the Tolkien Estate for years and was not a fan of games and movies. But Zaentz had those rights and exploited them. The Peter Jackson films — which generated nearly $6 billion in revenue starting in 2001 — were the highlight of Zaentz’s stewardship.
Zaentz passed away in 2014, and Christopher Tolkien died in 2020. The control of the Tolkien Estate moved into the hands of the wider family of grandchildren. All of this opened the way for the sale of Middle-earth Enterprises.
And based on my visit to Guinchard and our three-hour conversation, he plans to make use of those rights. In particular, Guinchard wants to see a renaissance of Tolkien games. Perhaps the biggest thing coming is a new set of films from Peter Jackson, via Embracer Freemode’s license of film rights to New Line Cinema and Warner Bros.
In the wake of the Peter Jackson films, the franchise has slowed to a trickle. Smaller games such as the disastrous Daedelic game The Lord of the Rings: Gollum, the latest new title The Lord of the Rings: Return to Moria, and the upcoming Tales of the Shire were all greenlit before Embracer acquired the rights. These smaller games all served a particular market thirst for more original content related to The Lord of the Rings and The Hobbit.
Tales of the Shire in particular is going after the new audience that likes cozy, feel-good games. But these were all smaller goals in advance of the more ambitious plans that Guinchard has now.
Over the next decade, filmmaker Peter Jackson plans to return to the franchise and make several movies, thanks to an agreement reached quickly with Embracer Freemode and Warner Bros./New Line Cinema. Amazon has a new season of The Rings of Power coming in September, and Amazon Games is making a massively multiplayer online role-playing game based on The Lord of the Rings. As noted, Jackson’s next film will debut in 2026, kicking off some expected activity in related areas like games.
To make a lot of these more ambitious ideas happen, Guinchard has been a traveling a lot. He spent time with the Jackson team and the Weta Workshop crew, talking about those upcoming films. Guinchard has also spent time with the Tolkien Estate, getting to know the folks who manage the great works. And he has also spoken with the studio heads at Warner Bros. and New Line Cinema, which produced Jackson’s six previous Tolkien films starting more than 20 years ago. Guinchard wants to build bridges and get new projects off the ground. More games are coming, but he can’t talk about them yet.
Warner Bros., whose game division created the triple-A titles Middle-earth: Shadow of Mordor and Middle-earth: Shadow of War, announced the new films in February as part of a long-term agreement with Sweden-based Embracer Group, which recently announced it will split itself into three companies. And Guinchard told me that games are going to be made to fully explore the new universe being created, and games will be considered as hugely important in the Middle-earth entertainment of the future.
A humble Hobbit abode
The headquarters of Freemode itself isn’t so exciting to visit in some ways. It’s not like the Harry Potter world at Warner Bros. Studio Tour London in the U.K. Freemode is a remote work company with people working virtually. It’s not a big spending company, as Guinchard came of age making games in a more Spartan era, starting 25 years ago at Take-Two Interactive.
Guinchard is camera shy himself. He wants to be behind the scenes. But he did let me take pictures of all of the Tolkien paraphernalia around the office. There’s a lot of it. But I’d like to see this one day be held inside a building that’s more like a museum or a cathedral for the Tolkien universe.
Still, all of this stuff shows that Guinchard is a real fan. That’s the kind of person you want to be the steward of the franchise, much like we all needed a good steward of Gondor.
He comes from humble roots and worked his way up. In England, Guinchard was the founder of Joytech, a global video game accessory company, as well as founder and of LDA Distribution, a pan-European video game publisher and distributor, where he imported games from Japan and other places and distributed them in the U.K. He launched titles until there was a big market crash for the Spectrum and the Commodore 64.
“The retailers completely got the hell out,” he said. “We had the same crash as the U.S.”
And then he turned to selling computer games via mail order for systems such as the Commodore Amiga and Atari ST.
The game incubator
Guinchard said he read The Hobbit in school for the first time as he was at a Church of England school and had to read it for class. He recalls sending postcards based on the Tolkien franchise to his grandmother.
Both of Guinchard’s companies were acquired by Take-Two Interactive in 1999. That brought him more directly into games and he moved to New York. He spent seven years at Take-Two, during the time when 2K Games was spun up. That label went on to publish titles such as NBA 2K sports games, Borderlands, BioShock, Mafia and more.
Then he got involved with Kai and Charles Huang, two brothers who started a company called Red Octane, aimed at creating a business that combined hardware and software. They sent him a box. Inside was a plastic guitar and a gold disc. Guinchard tried it out and thought it was cool. He got his kids to play, and they liked it. There’s something here, he thought.
“I have my eight-year-old daughter sort of humming old rock songs around the house,” he said.
He joined Red Octane, and then Activision acquired the company. At Activision at the time, there were lots of brands and way too many games, but not enough that really moved the needle.
Guitar Hero
The Red Octane team published the first Guitar hero game, with help from game creator Harmonix, which later went on to create Rock Band with Electronic Arts. Activision went on to make a series of Guitar Hero games and Guinchard moved to Livermore, California.
He stayed at Activision for 11 years and helped spin up a significant franchise with Toys for Bob in Novato, California. The team was making a Spyro game and was incubating a new technology for video games with RFID and toys. The first game combined games and toys. Skylanders took off, and Activision CEO Bobby Kotick instructed Guinchard “to go build it out” and it turned into a big machine within Activision. It was a good business until the fad burned out and rivals like Disney Infinity and Warner’s Lego Dimensions flooded the market.
“We spent God knows how many years building the Skylanders product line and ran it through to the end,” Guinchard said. “It ultimately suffered from oversaturation of the category.”
Both Guitar Hero and Skylanders became huge franchises, which Activision rode until they ran out of gas.
During this time, Guinchard had always operated under the radar.
“It’s just the way I’ve operated. “My career at Activision was really in the trenches with not only creating product, but actually building the IP, really connecting the dots on everything but also trying to understand when things start moving to new new places. At Activision, you learn so much. We doubled down on the big things. All this other stuff was a distraction.”
The earlier pattern at Activision Blizzard was to try lots of things until a big hit came along. Then a narrowing of focus happened, with the company zeroing in on giant franchises like Call of Duty, Tony Hawk, World of Warcraft, Diablo and a few others. There were periods of IP exploration and expansion, and then a narrowing down on a few focused projects. To Guinchard, it’s a good lesson for The Lord of the Rings franchise.
The Embracer Group whirlwind
Guinchard left Activision Blizzard in 2017 and advised different startups. He started a tech incubator Aionic Labs in 2020 and ran it until he started talking to Lars Wingefors of Embracer Group again in late 2020 during the pandemic.
Wingefors noted that he had bought a lot of intellectual property, starting with Novalogic (maker of Delta Force) and a bunch of others along with 119 game studios — including the THQ portfolio, Tomb Raider and more. The Swedish stock market heated up and enabled Embracer Group to raise capital that it used to buy more and more properties, including Gearbox. Management was decentralized. Wingefors was able to raise even more money and start an acquisition binge the game industry had never seen before.
“In the market, Lars had a great story with an industry that was heating up and an ability to raise capital and good valuations,” Guinchard said. “After all that, he ended up with 12 operating groups.”
In 2021, Guinchard decided to join Embracer Group and helped create the Freemode Operative Group to incubate new ideas for Wingefors, building an operating company that could build links between different divisions.
“Freemode was set up as a management team to help these companies go to the next level through (support and mentorship),” he said.
But then, during the past year, the game market changed. Games started to stall after a spectacular run during COVID. People started going outdoors again and playing fewer games. Life was getting back to normal.
Embracer Group was over-indexed in having too many mid-level games in the works. Layoffs started accelerating and Embracer Group failed to secure a $2 billion funding round. Then the bell started to toll.
Wingefors had to start unwinding the acquisitions to pay down debt and cut costs. Lots of layoffs ensued at Embracer game studios, with more than 1,400 people losing jobs in various closures. Embracer Group agreed to sell Gearbox to Take-Two for $460 million, which was above the $363 million in cash and stock (not counting an earn-out it did not pay) it paid upfront in 2021. It also unloaded Saber Interactive for $247 million. It seemed like the fire sale wouldn’t end, but Embracer Group held on to its all-important IP. And now there’s a new change.
A new trio
Embracer Group plans to split into three public game companies, Asmodee Group (with its tabletop games), Coffee Stain & Friends and Middle-earth Enterprises & Friends (temporary name).
The latter group includes the Freemode group that Guinchard runs, and the deal is expected to be complete sometime in 2025. Asmodee will carry debt which Embracer refinanced. Middle-earth Enterprises & Friends will include both The Lord of the Rings and Tomb Raider IPs. It also has Kingdom Come: Deliverance, Dead Island, Saints Row and many others.
While all this was happening, Guinchard started figuring out a strategy with his team.
During the past 18 months or so, Guinchard started quietly talking to the different parties that matter for The Lord of the Rings franchise, including Peter Jackson’s team, the Tolkien Estate, Warner Bros./New Line and Tolkien fans themselves at places such as The One Ring. Guinchard felt a need to build bridges — as many of the parties fell out with each other at various times in the past — and do his own homework about the market.
He was always a Tolkien fan, but he dug deeper into it than ever before, looking at things Tolkien himself said. And he was not coming at it from the approach of a conglomerate.
“Part of the due diligence was understanding what the map was,” Guinchard said. “Once you get under the hood, the actual rights are easy to understand. I started thinking. Oh God. This opportunity is way bigger than people realize. But it’s not an instant opportunity. You’ve got to look at this for a long time. Look at who the players are. And what can we do, as stewards of it? I had to get my head around what people are playing in and around our sphere.”
Guinchard’s approach is to start with the creators, like Peter Jackson’s team and Mike De Luca and Pam Abdy, the co-CEOs of the Warner Bros. Motion Picture Group. There is also the Tolkien Estate. Previously, some of these parties weren’t speaking. Some had sued each other historically.
This was a problem, he saw, if you wanted to build a 10-year or 20-year plan.
“I think the idea of having games come out on a regular business is great, but you’ve got to put the work in,” Guinchard said. “That’s something I learned with Skylanders. It wasn’t cast in stone as a success. But the minute it was a success, then we got the greenlight to build.”
Getting great creators to build is what it takes to restart these games. Some of that could take years to come to fruition, particularly if you think about the need to link everything in a single narrative, which is the strong suit of The Lord of the Rings franchise. It’s less like Call of Duty, which has some continuous narrative but often isn’t tightly linked, and a bit more similar to the Marvel Cinematic Universe, where there were story linkages across many movies.
“Year on year, you can add and test things with something like Call of Duty. But it’s not a story. It’s not a narrative. You keep the stuff that is working,” he said.
But you don’t want to have to wait five years to see if one project is a hit and then double down on it. That approach has problems because customers don’t get to tweak the product in advance. Game teams have to figure out the authentic world to build and the gameplay within it.
Guinchard doesn’t want to have game companies get a license so they can slap it on an existing game.
“For this property and how we set it up for the future, we’ve got to acknowledge and support creators first. All I can say through all of this is you have to respect the works,” Guinchard said. “We believe that gaming can be the future, of course. And I think we want to do something amazing and big over time. And really, it’s important to build those relationships in order to really take this thing into the next chapter. Historically, it’s just been so fragmented.”
Within the Embracer Group, there was no team that could build MMOs, so it made perfect sense for Amazon, which has published MMOs like New World as its specialty, to make the next The Lord of the Rings MMO. Guinchard knew the Amazon Games chief, Christoph Hartmann, back in their 2K days at Take-Two.
They talked and got the new game under way. There are devs at Crystal Dynamics and Eidos Montreal who are keen on Tolkien. And there’s Warhorse, the Kingdom Come: Deliverance team as well.
“Not everything is going to hit it out of the park,” Guinchard said. “We know that. But we’re really creating an ecosystem and an agile company that invites creators to create things in this world. That’s the plan.”
Another important principle is to bring community players into the game process. Guinchard has been proactive about that.
“When you look at One Ring and stuff like that, these folks bring so much to this world. They’re not game creators but they know way more than we’ll ever know about all the nuances,” Guinchard said. “We want to bring new people into the franchise. And authenticity is important.”
He added, “You can’t be everything to everybody. But you’ve got to have a game that just stands up and says, ‘Wow, I want that game.’ That’s definitely in our wheelhouse. My job is to look at this and some learnings from the past.”
One of those learnings is to stop some of the mistakes earlier, like shutting down the Switch version of The Lord of the Rings: Gollum, after the main release turned out so poorly. On the positive side, the collectible card game The Lord of the Rings based on Hasbro’s Magic: The Gathering turned out spectacularly, as it generated more than $200 million in revenue in its first month. It turned out that Tolkien fans and Magic fans were the same people.
With Tales of the Shire, there is a chance to reach new folks.
“That’s the power. It’s really the power of the of doing the right thing by the property,” Guinchard said. “We’ve had a lot more input into that because we have like an internal games team now. They have been a lot more involved in that in the last six to eight months. And again, it really hits a spot for us and also brings in potential new audiences. There are a lot of these cozy games now, but this one really is quite cozy.”
The game has a lot of attention to detail and has more diverse leadership with women leads. It’s a smaller game with a lower price point. It’s like a game in the “arts and crafts” category.
I asked if Guinchard thinks there is a place for Tolkien in the fan fiction equivalent in games, like Roblox or other user-generated content. He agreed there is an opportunity.
“It’s a lot bigger than people might realize,” he said. “Embracing your communities and building with them. The world is naturally going there, building things with them.”
Of course, this seems easier said than done. An example is that a 15-year-old fan-created film about Gollum was removed after the announcement of The Lord of the Rings: The Hunt for Gollum was announced. The studio later said it was a mistake to remove the film.
The next generation of games
As he contemplates the modern Middle-earth game universe, Guinchard is playing around with AI tech. He’s testing a concept AI character aging generator and other tools that might enable both players and game developers to generate depth to the world. He has an internal tool called Ask Gandalf. The question becomes: do you let the players get their hands on these game generators and let them go crazy with it?
Certainly, everybody will get into trouble when it comes time to do mash-ups, like remixing The Lord of the Rings with Stars Wars. After all, that will lead to a clash between rights holders.
“There’s a limitation to what can and should be done” with AI, Guinchard said.
In creating game worlds, the attention to detail makes the difference, Guinchard said. There are so many things still unexplored when it comes to timelines and other details.
The Rings of Power and more
Guinchard believes there could be many more years of The Rings of Power. It has valid criticisms, particularly where it diverges from canon and the attempt to include hobbits in the Second Age. But it was a good attempt to be creative and add new lore to the canon.
“It wasn’t what I (originally) thought it would be, but I am very much looking forward to seeing how the story develops in Season 2,” he said.
On the other hand, Guinchard is excited about the upcoming War of the Rohirrim, set 183 years before The War of the Ring in The Lord of the Rings. It’s an anime film with an “amazing story that is totally in canon and authentic,” Guinchard said. The film tells the fate of the House of Helm Hammerhand, the legendary King of Rohan.
“It’s a great example of taking a piece of history of Middle-earth and putting color to it,” he said.
Jackson’s team is busy fleshing out what the new films will be.
The next season of The Rings of Power arrives The Amazon TV series is a major effort, and it is separate from the MMO, which is in the game ecosystem.
“They are a licensee, but we’re working very closely with them on the world and how it looks and feels,” he said. “There’s no reason why these things can’t sort of be interconnected there. So, okay, so let’s get going.”
The First Age
For the Second Age, there are no issues as to what Embracer Freemode can authorize on games or movies, as the Second Age had a considerable amount of material included in the appendix to The Lord of the Rings: The Return of the King. That is clearly within the license that Saul Zaentz received and passed on to Middle-earth Enterprises.
“This is all in our control,” he said. “We’re the stewards of this. There are no rights issues.”
If Embracer Freemode were to venture into new areas in the First Age of Middle-earth, which is contained in J.R.R. Tolkien’s The Silmarillion book, published after his death by his son Christopher Tolkien. Those rights are with the Tolkien Estate, and it remains to be seen what can be done with them.
But I think the good thing about the First Age is that there are a lot of interesting stories to tell. I would love to see some of those stories come to life in movies and games — like Beren & Luthien, Turin Turambar, the Fall of Gondolin and more.
“This is some of the brushstrokes of areas where we might want to explore gaming, which is in the First Age. The foundations for the whole world are set. The rights are locked up,” he said. “But when I’m looking at the future, it’s interesting. There are some great stories with Beren and Luthien. There are some really interesting things to go after with The Silmarillion. You have got to have a plan.”
These are epic stories that, in my opinion, could be every bit as compelling as The Lord of the Rings. But they’re unfinished and not nearly as fleshed out as the narrative of The Lord of the Rings and The Hobbit. The details are in The Silmarillion, but they’re not well known beyond those inside the fandom, he said.
“You’ve got to connect them. And I think that’s better,” he said.
This is perhaps where there is still some heavy lifting to do, to flesh out the details of how films, books and games will be connected in the future, kind of like the Marvel Cinematics Universe that was mapped out for Disney by Kevin Feige and his writers since 2007. There are a lot of stories still untold, as the First Age of Middle-earth tells about the epic stories of the equivalent of the Greek gods, or the Norse gods, and The Lord of the Rings is a pinpoint in time in that larger universe, much like Homer’s The Iliad is one small tale within Greek mythology.
“They may or may not want to do it. I think hopefully one day there is a chance of really exploring it,” he said. “Ultimately, it will always be down to the folks at the estate whether they want to do anything.”
What’s coming next?
Guinchard said the work is still in motion.
“We’re in the middle of it, the whole creative thing,” he said.
It isn’t a rush job. It’s a journey to figure out how to do the best work. This is a necessary step to take the franchise to the next level.
“If you treat everything just like a bunch of rights all the time, and a bunch of transactions, you get average,” Guinchard said. “This part of the group is going to be focused on building long-term intellectual property, with its creators, and with other creators, as well. We use the words Middle-earth & Friends because it is really about the IP. It’s all about the IP. That’s the one thing that we’ve got a lot of opportunities for building out in a very Middle-earth way. What does the next chapter mean? This is like the torchlight in the middle of the journey.”
The question Guinchard is wrestling with is what does the IP mean in the modern world? How does the company do justice to them? There are offshoots that can happen like The Mandalorian managed to achieve for the revival of Star Wars. Whatever is done, it has to be authentic.
The grand plan
In recent years, with no new movies in the works and a war among the rights holders, the franchise was reaching just millions of users. Middle-earth Enterprises wants to reach billions. In the past, it was focused on North America and Europe. But he wants it to be global.
Projects should be planned out with a schedule so they fit and work together. There will be a central repository of IP canon aligning forward. And the focus will be on high quality, not mixed results like we have seen in recent years.
To accomplish this, Middle-earth Enterprises will retain oversight on the projects and the IP. It will take a strategic approach to partners, both inside Embracer and among external teams. It will do this with games. It has an exclusive partnership on movies with Warner Bros./New Line Cinema. And it will work with a wide variety of merchandise companies and lean heavily on Warner.
Of course, Roblox or Fortnite players would love mash-ups of IP, like with Ready Player One. Guinchard said you should never rule out such things as time progresses. But it takes time to figure such things out.
The job is to build value for the IP, and that value only gets created if you build great products, he said. If you make small mistakes, fans can be forgiving. You just don’t want to make a lot. From my point of view, that makes me think about Gollum, which got poor reviews.
Guinchard is the ringleader, but he said there are a lot of people in the group and a lot that the company is working with. He’s not revealing a lot of details yet.
“They know who they are, we know who they are. And their focus on what matters is what’s important for the long term,” he said. “We have had to get on the other side of this last few months (of layoffs and company structure announcements) and actually start to build. The folks that have lost their jobs in the industry, as well as our own process, is heartbreaking. The people in a creative world pour their heart and souls into this work. It’s the way these economic cycles work. It’s tough.”
Embracer Freemode is a cash generating business already. At the moment, it is self-sufficient.
“I’m very confident that this will be something quite special from a product perspective again,” he said. “But it doesn’t do us any favors to come out and say a load of stuff to get (attention). It has to get to a point where you’ve actually got something to say in an execution sense,” he said.
The ambition is big like the modern way that the Marvel Cinematic Universe or Star Wars has been handled at Disney. But Guinchard is thinking about developing the central hub and how it means slightly different things in The Lord of the Rings universe. In that way, he won’t make a direct comparison to other franchises.
“I think Tolkien has already set the stage for Middle-earth, and all the tales and all the beginnings, the tribulations, the drama. They’re all set up in a fully fleshed-out world. Marvel came from comic books, so there was a lot of work to do to make the lore for the movies,” Guinchard said.
He added, “You start to visualize Middle-earth in your own way. When you see the animated films, and some of the Peter Jackson, which wasn’t actually what I imagined, I was still quite happy to. It’s already preset, down on paper in the written word. The interesting thing is how we go and tell the story in the future for these new media like video games and all of this new technology for how people immerse themselves in worlds. That’s where I’m super interested.”
While the written word is clear, the visual interpretation is up for grabs. There are so many different kinds of art styles, Guinchard said, with the look of things like Fortnite, Borderlands, GTA, Tomb Raider and more. The teams will have to figure out what Frodo looks like and more. And if an Asian audience is looking at a version of The Lord of the Rings property in the future, how would it be visualized for them? That is what you have to think about when you envision a global market.
“As we move forward in society and have all these amazing ways of consuming great entertainment, I skirt around the point of this central hub. I’d like to think that what we build here is that central hub,” Guinchard said. “But the difference is we have a great collection of world-class creators all riffing with each other, whether that be the folks in New Zealand, the folks at great studios (the Amazons), the fans — what we have to strive to be here in this next evolution of being is the connective tissue with everything doing the right things by people who matter. All of this becomes useful to the universe.”