Warner Bros. Discovery has been in a rough spot financially for quite some time now, and that applies to their video games division this year especially as well.
It’s apparently gotten to the point where Warner Bros. Games is going to slim down their focus on future titles to revolve around four IP in particular.
The company held its quarterly earnings call earlier this week where WBD CEO David Zaslav stated their gaming division is “substantially underperforming its potential.”
And that’s certainly not all he had to say about Warner’s gaming ventures lately.
“I think we’re through some of the worst — and it hasn’t been pretty — on the gaming business,” said Zaslav via Insider Gaming. “But we have four games that are really powerful and have a real constituency that love them, and we’re going to focus on those four primarily. We’re going to go away from trying to launch 10, 12, 15, 20 different games. I think we have a real chance now with focus to have the gaming business be steadier.”
This comes as WB Games’ revenue declined by 31% year over year for the quarter ending on September 30 since Mortal Kombat 1’s strong launch boosted them during the period in 2023 — but apparently Khaos Reigns didn’t provide a similar jump.
Warner has a $300 million writedown for its games in 2024 with a majority of that attributed to the flop of Suicide Squad: Kill the Justice League, but that wasn’t their only big loss driver.
Chief Financial Officer Gunnar Wiedenfels revealed MultiVersus in particular underperformed this past quarter for the corporation, leading to an additional $100 million to reach that $300 million number they currently sit at.
So it seems they’re attempting to pull the reigns back and have a tighter direction aimed at four properties in particular.
“We have four strong and profitable game franchises with loyal, global fans: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC, in particular, Batman,” said Zaslav. “We are focusing our development efforts on those core franchises, with proven studios to improve our success ratio.”
This comes just a year after WB and Zaslav said they were putting more emphasis on live service and free to play titles, which appears to have largely backfired as their big loss leaders now.
That was an interesting move when Hogwarts Legacy and Mortal Kombat 1 were their primary breadwinners at the time, but it may be part of a larger trend of large-scale games moving back away from live service that seem to have produced more disappointments than success stories across the industry the past few years.
And even with Mortal Kombat being labeled as one of Warner’s gaming pillars, it hasn’t been a fantastic time on that front lately either.
That’s largely from NetherRealm Studios laying off over 50 people across its entire mobile development team along with the shuttering of Mortal Kombat Onslaught just a year after launch.
Although it seems NRS may already be working on their next AAA title, that estimate of Warner supporting MK1 for 3–4 years is looking more likely now unless they want to move on sooner.
Having DC remaining a focus could also leave a new Injustice on the table too, but it’ll still be quite some time to learn more about what they’re working on.
The ultimate fate of MultiVersus remains up in the air too with the free to play platform fighter not living up to sales expectations after going dark with the beta for a year before popping back up in May with a full release.
Maybe the new season focused around some popular goth girls in DC’s Raven and Adventure Time’s Marceline can help give MultiVersus the boost it needs.
There were of course rumors too that Warner was looking to sell off some or all of its gaming division, but that seems to no longer be the case — or at least Mortal Kombat won’t be going anywhere.