$100 Million Loss Leads Warner Bros Discovery on the Right Path
Warner Bros. has announced plans to double down on four major video games, specifically Batman, after acknowledging that its video game business “is substantially underperforming its potential right now.”
With the $200 million revenue hit from Rocksteady’s Suicide Squad: Kill the Justice League and the $100 million failure of Smash Bros.-style brawler MultiVersus, 2024 has been a terrible year for Warner Bros. Games. After this utter failure, the company intends to drastically cut down on the number of video games it releases in the process, doubling down on just four titles.
Warner Bros. Games Faces $100 Million Loss
Since its official launch earlier this year, MultiVersus, a platform brawler developed by Player First Games, has not been well received by viewers.
Warner Bros. Discovery CEO David Zaslav and CFO Gunnar Wiedenfels acknowledged in a recent investor call (via IGN) that the game did not perform as well as September’s Harry Potter: Quidditch Champions.
In addition to the $200 million loss from February’s Suicide Squad, both games cost WBD’s game division an additional $100 million. Zaslav stated:
We recognize [the games business] is substantially underperforming its potential right now.
Wiedenfels added that the overall $300 million writedown from WB’s games was a “key factor in this year’s studio profit decline.”
According to its third-quarter financials, which ended on September 30, 2024, WBD’s games division saw a 31% decline in revenue from the same period the previous year, when Mortal Kombat 1 was the main driver.
After its open beta, which had been operational since the summer of 2022, was closed in the middle of 2023, MultiVersus relaunched. WB acquired Player First over the summer as a result of the game’s strong player numbers during the beta and after the relaunch.
However, its current 24-hour concurrent count on Steam is only 1,741 players, which is significantly less than its peak of 153,433 players. Player First revealed earlier this week that two new characters would be joining the game’s cast for its upcoming fourth season.
Warner Bros. Will Now Focus On Only Four Franchises
David Zaslav has recently stated during a financial call that the company intends to drastically cut down on the number of video games it releases and focus only on four titles. These include DC “especially Batman,” Game of Thrones, Mortal Kombat, and Hogwarts Legacy, Zaslav continued. Zaslav went on to say:
We’re through some of the worst — and it hasn’t been pretty on the gaming business — 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.
Batman is undoubtedly the main attraction there. Suicide Squad: Kill the Justice League, a contentious live service looter shooter, failed partly because it wasn’t another Batman Arkham single-player game, for which developer Rocksteady is best known. The VR-only Batman Arkham game was recently released by Warner Bros. Games. Could Rocksteady be returning to Batman as a result of Suicide Squad‘s difficulties?
The company is going to go away from trying to launch 10, 12, 15, 20 different games. It focuses on the development efforts on those core franchises, with proven studios to improve the success ratio of the company.
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