During its second-quarter earnings call on Wednesday, Warner Bros. Discovery announced plans to expand its video game offerings by utilizing its vast catalog of intellectual properties. The company aims to not only develop games internally but also license its franchises to other game development studios. This strategy comes on the heels of the immense success of Hogwarts Legacy, which emerged as the best-selling game of 2023. However, the company acknowledges that many of its properties have not yet been fully leveraged in the gaming space.
In the Q&A portion of the Warner Bros. Discovery Q2 2024 earnings call, CEO David Zaslav highlighted the significant interest from external partners in adapting Warner Bros. IPs into video games. “We have 11 studios here, and we have a lot of IP,” Zaslav stated. “There’s also a lot of interest among others in coming to take advantage of some of that IP for gaming, which we’re looking at,” he emphasized.
JB Perette, CEO and president of global streaming and games, added that Warner Bros. franchises are in “high demand” and could facilitate the development of new gaming titles. He also pointed out that the free-to-play segment is a key focus, acknowledging the mixed outcomes from the company’s triple-A first-party releases.
Last year, the release of Hogwarts Legacy, based on the beloved Harry Potter franchise, reached over 22 million copies sold, solidifying its position as the year’s leading game. However, the subsequent release of Suicide Squad: Kill the Justice League in 2024 did not fare as well, facing criticism and leading to a 41 percent decline in Warner Bros.’ gaming revenue for the second quarter.
Although Warner Bros. Games has released titles based on popular franchises such as Batman and Harry Potter, notable properties like Game of Thrones and Superman have yet to be fully explored in the interactive medium.
According to Zaslav, the company must enhance its approach to fully harness the potential of its gaming IPs. “We need to grow bigger, and the inherent value of the IP we control in the gaming sector is something we’re eager to capitalize on,” he noted in response to an inquiry.
At the third-quarter earnings call scheduled for November 2023, Warner Bros. had previously indicated plans to adapt its major franchises into live service games, concentrating on extending the lifecycles of its releases. “Ultimately we want to drive engagement and monetization of longer cycles and at higher levels,” Zaslav had remarked. “We are currently under scale and see significant opportunity to generate greater post-purchase revenue.”
This year, Warner Bros. placed significant emphasis on the live service model with the launch of Rocksteady’s Suicide Squad: Kill the Justice League, which included anticipated post-launch content. Despite this effort, the game faced backlash over its live service design, leading to a staggering $200 million loss for Warner Bros. after disappointing sales. Our review noted that the game struggled due to a shift away from Rocksteady’s strength in crafting single-player narrative-driven experiences.
In March of this year, Warner Bros. reaffirmed its commitment to the live service model for gaming, despite the less-than-stellar performance of Suicide Squad.
