Warner Bros. Discovery to focus on four core game franchises as poor releases lead to $300 million-plus write-downs
Warner Bros. Discovery continues to suffer from a series of commercially failed video games. Here are the key takeaways from the company’s financial report for the three-month period ended September 30, 2024.
MultiVersus
- According to its Q3 earnings results, Warner Bros. Discovery reached $9.6 billion in revenue, down 3% year-over-year. Net income was $135 million, compared to a net loss of $417 million in the same period last year.
- The company didn’t disclose the earnings of its video game division, but noted that gaming revenue fell 31% year-over-year. The main reason is the lack of new successful releases like last year’s Mortal Kombat 1.
- Video game content’s cost of revenue (expenses) increased 47% year-over-year due to $122 million in impairments. This includes a write-down of more than $100 million for MultiVersus.
- With a $200 million loss on Suicide Squad: Kill the Justice league, the company’s total write-downs in its games business have surpassed $300 million year-to-date.
- During an earnings call, president and CEO David Zaslav acknowledged that Warner Bros. Discovery’s games business is “substantially underperforming its potential right now.”
- The company plans to focus on four core franchises: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC (in particular, Batman).
- One of its top priorities is the Hogwarts Legacy sequel. It is no surprise, considering that the original game recently surpassed 30 million copies sold globally.
- “We’re going to go away from trying to launch 10, 12, 15, 20 different games,” CFO Gunnar Wiedenfels commented. “And I think we have a real chance now with focus to have the gaming business be steadier.”
- He added that in the fourth quarter, Warner Bros. Discovery expects gaming business “to be flat to modestly better year-over-year as last year’s launched of Hogwarts Legacy on the Switch platform in November is offset by lower costs.”
