Warner Bros. Games intends to rebuild its video game business around four tentpole franchises: Harry Potter, Game of Thrones, Mortal Kombat, and DC.
The company outlined that plan in its latest shareholder letter and said it continues to view its games business as a “strategic differentiator.”
It reiterated 2024 was a ‘disappointing year’ for the division, with titles like Suicide Squad: Kill The Justice League and Multiversus underperforming, and confirmed it will be restructuring around “proven IP and games from proven, world class studios.”
That cost-cutting initiative has already resulted in the closure of notable studios such as Shadow of Mordor developer Monolith Productions (which had been working on a Wonder Woman project), Multiversus developer Player First Games, and WB San Diego.
Those closures followed layoffs at other internal studios including Rocksteady and WB Games Montreal.
WB Games seems intent on looking to the past for cues on how to revitalize its flagging business—with game revenues decreasing by 29 percent year-on-year during Q4. Annual content revenue, which includes video games, also decreased by 8 percent year-on-year across FY2024.
WB Games invokes Hogwarts Legacy
WB Games repeatedly name-dropped 2023 release Hogwarts Legacy as an example of how it can leverage a major franchise to deliver success, and it seems the company believes prioritizing a few colossal franchises and ‘top tier characters’ (obviously Batman was mentioned here) is now the correct play.
“Just two years ago, our Games team broke through with Hogwarts Legacy and created a completely new gaming franchise that was the best-selling game of the year—a result that only three other franchises in the last 15 years have achieved,” continues the shareholder letter.
“That gives us confidence that with our re-focused strategy we can get back to producing high-quality games built for long term consumer engagement, which we expect to propel our Games division back to profit in 2025 and emerge as a more significant contributor to growth in the years ahead.”