WB’s Gaming Struggles Come Into Focus

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In their recently published financial report, Warner Bros. Discovery provides an update on the performance of their widely talked-about gaming sector, and unfortunately, things aren’t looking too good.

The business disclosed “impairment” costs totaling $50 million for the recent quarter and $384 million in total for the entire year ending on December 31, 2024. As previously stated, the release of 2024’s Suicide Squad: Kill the Justice League had a negative effect of $200 million on Warner Bros. Discovery’s overall profits.

Warner Bros. Discovery (WBD) failed to offer a comprehensive explanation for the $384 million in yearly impairment charges, which are expenses incurred when a company reduces the value of certain assets, such as for tax purposes or related to acquisition costs. WBD acquired Player First Games studio, the developer behind MultiVersus, in 2024; however, they recently announced the closure of this studio along with Monolith and WB San Diego studios.

In the fiscal year, WBD observed a decrease of 20% in its “cost for game content,” primarily due to a general drop in income, which was partially balanced by some impairment costs. The anticipated lower earnings in 2024 were already accounted for, as the release of Hogwarts Legacy in 2023 resulted in a significant revenue boost. Remarkably, this game outperformed all other titles that year, even surpassing the sales of the 2023 Call of Duty game, making it the best-selling title of the year.

2024 saw some disappointing results for WBD’s major gaming releases. “Kill the Justice League” fell flat, and “Harry Potter: Quidditch Champions” didn’t make a substantial impact. “MultiVersus”, unfortunately, struggled to maintain an audience and will be closing down in May. “Batman: Arkham Shadow” for Meta Quest 3 was released in October 2024, but VR games typically don’t generate significant income.

In their earnings report, WBD admitted that 2024 was a lackluster year for their video game division. The company believes that the restructuring measures they’ve recently announced, such as shutting down three studios, staff reductions, and cancelling a Wonder Woman game, could pave the way for the company to resume growth in a positive direction.

During an earnings discussion, WBD’s leadership stated that 2024 was an exceptionally poor-performing year compared to others, following a remarkably successful year in 2023, mainly due to Hogwarts Legacy’s exceptional performance. Moving forward, WBD intends to concentrate on four gaming franchises: Harry Potter, Game of Thrones, Mortal Kombat, and DC. It’s worth noting that they plan to give special attention to the Batman character within the DC universe.

Regarding future projects, it’s been mentioned that Rocksteady Studios, known for Batman: Arkham Knight, is developing another standalone Batman game. On the other hand, WB Games Montreal is rumored to be proposing a new Game of Thrones video game. Avalanche Software is anticipated to expand Hogwarts Legacy with additional content and also create a full sequel. The Mortal Kombat series is expected to carry on under NetherRealm Studios. James Gunn, head of DC projects, hinted at some intriguing upcoming DC projects, but they won’t be released soon. Game of Thrones: Kingsroad, a game for mobile and PC devices featuring characters from the show, is set to launch later this year; a free demo is currently available on Steam.

According to WBD management, the remarkable achievement of Hogwarts Legacy has boosted their conviction that they can once again create top-notch games designed for long-term player interaction. The company anticipates that its gaming division will regain profitability by 2025, with plans to make a larger impact on growth in the coming years.

David Haddad, a long-standing executive in gaming at WB, revealed in January his intention to depart from the company. However, he plans to remain with them temporarily to assist in the transition period.

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2025-02-27 18:09