Warner Bros. Discovery's gaming division will focus on four key franchises instead of 10-20 games due to a $300 million loss
Warner Bros. Discovery released its financial report for the third quarter of 2024. The company is facing significant losses in its gaming division.
MultiVersus
- The revenue from Warner Bros.'s gaming division fell by 37% year-over-year.
- The company explained that last year's growth was due to the highly successful release of Mortal Kombat 1 in September. This year, there are no such contributing factors.
- Operating expenses for gaming content increased by 47% — partly due to write-downs totaling $122 million.
- The losses this quarter are primarily linked to MultiVersus from Player First Games studio. The game was released at the end of May, but it underperformed compared to the company's expectations.
- As a result, total write-downs since the beginning of the year have exceeded $300 million, including $200 million in losses from Suicide Squad: Kill the Justice League.
- In a conversation with investors, Warner Bros. acknowledged that the current results of their gaming segment are "quite far from its expected potential."
- The company's CEO, David Zaslav, emphasized that the company will focus on four main franchises: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC (especially Batman).
- Among the near-term plans is the development of a sequel to Hogwarts Legacy, which, according to Warner Bros. representatives, is given "very high priority."
- Chief Financial Officer Gunnar Wiedenfels shared the management's decision in response to the situation: "We are moving away from trying to release 10, 12, 15, or even 20 games simultaneously. Now we have a real opportunity, by focusing on the quality of projects, to make the gaming business more stable."
- Wiedenfels is confident that the company will return "at least to $3 billion and then begin rapid growth." However, he did not specify which metric he was referring to.