Netflix has admitted it did not attribute any value to Warner Bros.’ video game business in its $82.7 billion acquisition deal, sparking concern for the future of everything from Mortal Kombat to Hogwarts Legacy.
While Warner Bros. is best known for its movie and TV business, Warner Bros. Games includes a number of well-known video game developers and brands. Batman Arkham developer Rocksteady, LEGO games developer Traveller’s Tales, Hogwarts Legacy developer Avalanche Software, and Mortal Kombat maker NetherRealm are all on Warner Bros. Games’ books.
And despite the fact some of Warner Bros. games, in particular smash hit Hogwarts Legacy, have sold tens of millions of copies and generated billions of dollars in revenue, as far as Netflix is concerned, they’re pretty much an afterthought in this mega deal.
Speaking during a conference presentation about the deal reported on by Pocket Gamer, Netflix co-CEO Greg Peters responded to a question about whether buying Warner Bros. would accelerate its own gaming plans.
He said that while Warner Bros. had done “great work in the game space, we actually didn’t attribute any value to that from the get-go because they’re relatively minor compared to the grand scheme of things.”
“Now we are super excited because some of those properties that they’ve built, Hogwarts is a great example of that, have been done quite well, and we think that we can incorporate that into what we’re offering.
“They’ve got great studios and great folks working there. So we think that there’s definitely an opportunity there. But just to be clear, we haven’t built that into our deal model.”
While Warner Bros. Games does have some big hitters under its belt, it has struggled since the release of Hogwarts Legacy. In January, previous games boss David Haddad exited the company following the costly failures of Suicide Squad: Kill the Justice League and MultiVersus. Soon after, Warner Bros. Games announced plans to shutter Monolith Productions, Player First Games, and Warner Bros. San Diego alongside the cancelation of its Wonder Woman game. And in June, Warner Bros. Games announced a restructure to focus on four key franchises: Mortal Kombat, Harry Potter, DC, and Game of Thrones.
Indeed, 2024 was a brutal year for Warner Bros. Games, with Rocksteady’s Suicide Squad: Kill the Justice League sparking a $200 million hit to revenue, and then Smash Bros.-style brawler MultiVersus flopping to the tune of $100 million. Harry Potter: Quidditch Champions, meanwhile, failed to make an impression. Speaking in a financial call, Warner Bros. Discovery President and CEO David Zaslav said: “We recognise [the games business] is substantially underperforming its potential right now.”
So what’s next for Warner Bros. Games while it awaits its fate? The promising Lego Batman: Legacy of the Dark Knight is set to launch at some point in 2026, and given Netflix’s deal may not close until summer 2027, this one feels safe.
Elsewhere, there’s a Hogwarts Legacy sequel in the works and a single-player Batman game from Rocksteady reportedly in development, but neither is announced nor do we have release windows. NetherRealm has yet to announce its next project, having ceased work on Mortal Kombat 1 updates. Will it make another Mortal Kombat game or another game in the DC fighting game series, Injustice? Gotham Knights developer WB Games Montreal, meanwhile, reportedly pitched a John Constantine game but it was never approved. A Flash game was scrapped after the DCU Flash film bombed. It’s now allegedly helping out with other games and is reportedly working on a pitch for a new Game of Thrones game.
Will Netflix be interested in any of this? So far, Netflix has seen mixed results from its video game efforts, with a number of high-profile hires and subsequent studio closures. It’s currently focused on narrative games based on Netflix shows, games for children, social party games, and Grand Theft Auto ports.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
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