In what one would possibly say is a exceptional instance of understatement, Warner Bros. Discovery mentioned in a letter to shareholders that 2024 was “a disappointing 12 months” for its video games enterprise, which suffered a 53% lower in income in comparison with 2023. Regardless of that large hit, Warner has excessive hopes for 2025 due to its latest restructuring, which it says will allow it to “refocus our sources and capital on confirmed IP and video games from confirmed, world class studios.”
That restructuring, after all, noticed the latest closures of WB San Diego, Participant First Video games, and the legendary Monolith Productions, in addition to the cancellation of the Surprise Girl sport that was introduced in 2021. All of that got here within the wake of the spectacular failure of Suicide Squad: Kill the Justice League and the fizzle-out of Multiversus, which was much less overtly cataclysmic than Suicide Squad’s bomb however nonetheless notable as a result of the sport had come out so strongly, earlier than Warner determined for causes unknown to take it offline for practically a 12 months and rework it. Between them, the 2 video games ended up shedding roughly $300 million.
Regardless of that, Warner continues to see videogames as “a strategic differentiator,” which “permits us to faucet into one of many quickest rising media segments and the over three billion world avid gamers.” However its focus sooner or later, because it mentioned when it confirmed the closures of Monolith and the remainder, can be on “4 tentpole franchises which have every generated over $1 billion in shopper gross sales in previous years: Harry Potter, Recreation of Thrones, Mortal Kombat, and DC—notably high tier characters like Batman.”
“Simply two years in the past, our Video games staff broke by with Hogwarts Legacy and created a totally new gaming franchise that was the best-selling sport of the 12 months—a consequence that solely three different franchises within the final 15 years have achieved. That provides us confidence that with our re-focused technique we will get again to producing high-quality video games constructed for long run shopper engagement, which we anticipate to propel our Video games division again to revenue in 2025 and emerge as a extra important contributor to progress within the years forward.”
Warner’s been banging this specific drum for some time now, so it is not as if that is some shock strategic shift that is going to catch the world off guard. But it surely does body how the corporate views videogames extra starkly than I believe we have seen up to now—not as a medium of expression or leisure in its personal proper, however merely a system of assist for IP that folks like or acknowledge.
It is an fascinating takeaway given the ample proof {that a} large identify will not carry the day by itself: Hogwarts Legacy was a large hit, however Harry Potter: Quidditch Champions is going nowhere and Harry Potter: Magic Woke up was closed in October 2024, simply over a 12 months after it launched. I am unable to even consider a Recreation of Thrones sport that is made a lot of a splash, apart from perhaps Telltale’s 2015 journey collection. (The subsequent GoT sport has a demo on Steam proper now, and perhaps it’s going to go someplace.) Individuals do like superheroes, although, so perhaps that’ll work out. (Simply not, y’know, Surprise Girl.)
What might assist Warner’s video games division greater than tentpoles is a latest change on the high: Longtime video games chief David Haddad introduced in January that he is stepping down from the function. A latest Bloomberg report cited quite a few sources who laid the blame for Warner’s videogame woes at Haddad’s ft, saying his tenure was marked by indecision and a scarcity of coherent imaginative and prescient.
