Warner Bros. Games Restructures After Major Losses — Focuses on Key Franchises

Warner Bros. Games is navigating a challenging period marked by significant financial setbacks and strategic realignments. Over the past year, the company has faced substantial losses due to underperforming titles, leading to a reevaluation of its development focus.

In a recent financial disclosure, Warner Bros. Discovery reported a 31% decline in gaming revenue for the quarter ending September 30, 2024, compared to the same period the previous year. This downturn is primarily attributed to the disappointing performances of key releases. Notably, "Suicide Squad: Kill the Justice League" resulted in a $200 million loss, while "MultiVersus" contributed an additional $100 million in write-downs. Collectively, these titles have led to over $300 million in impairments within the company's gaming division this year.

David Zaslav, President and CEO of Warner Bros. Discovery, acknowledged the underperformance, stating that the games division is "substantially underperforming its potential right now." He emphasized the need for more consistent and focused development efforts moving forward.

In response to these challenges, Warner Bros. is narrowing its focus to four primary franchises.

1. Hogwarts Legacy: Following the success of the original game, which has sold over 30 million copies globally, a sequel is currently in development.
2. Mortal Kombat: The franchise remains a cornerstone for the company, with ongoing support and potential future installments anticipated.
3. Game of Thrones: Leveraging the expansive lore of the series, new gaming experiences are being explored.
4. DC Universe, with a particular emphasis on Batman: Plans are underway to develop titles centered around iconic characters, with a focus on delivering compelling single-player experiences.

Gunnar Wiedenfels, CFO of Warner Bros. Discovery, highlighted this strategic shift, stating, "We’re going to go away from trying to launch 10, 12, 15, 20 different games. And I think we have a real chance now with focus to have the gaming business be steadier."

The company's development studios are encountering hurdles with several high-profile projects.

• Wonder Woman Game by Monolith Productions: Announced in 2021, the game underwent a significant reboot in 2024, including a change in directors. Despite an investment exceeding $100 million, the project remains in early development stages, and its future is uncertain.
• Cancelled Projects: A proposed game based on "The Flash" was terminated following the underperformance of the related film. Additionally, a pitch for a John Constantine game by WB Games Montréal was not approved.

Despite these challenges, Warner Bros. Games has several projects slated for release in the next two years, including a refreshed version of "Hogwarts Legacy," a new Lego-themed game, and various mobile titles. The company aims to leverage its core franchises and deliver more consistent, high-quality gaming experiences to regain its footing in the industry.