Warner Bros. Discovery’s latest earnings call was filled with revelations and blame. The company acknowledged that its gaming business was performing far below expectation and the recently re-released MultiVersus took the blame.
Warner Bros. CEO David Zaslav believes their studio business—which includes video games, film, and TV—has a great potential of turning in improved revenue in the future. At the same time, he acknowledged that its video game arm was the weak link.
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“But even in an industry of hits and misses, we must acknowledge that our studio business must deliver more consistently,” said Zaslav after listing upcoming film and TV projects. “This applies to our games business, which we recognize is substantially underperforming its potential right now.”
As the call progressed, Warner Bros. CFO Gunnar Wiedenfels explicitly blamed MultiVersus for contributing to the underperformance of its gaming division. Wiedenfels said the fighting game contributed to a further year-on-year hit of $100 million in the games department in Q3.
“Results were impacted by games, for which we took another $100+ million impairment due to the underperforming releases – primarily MultiVersus – this quarter, bringing total write-down year-to-date to over $300 million in our games business, the key factor in this year’s Studios profit decline,” he said.
“In Q4 we expect games to be flat to modestly better year-over-year, as last year’s launch of Hogwarts Legacy on the Switch platform in November is offset by lower costs.”
MultiVersus made a positive impact when it was first launched in July 2022. At its peak, the game attracted 153,433 concurrent players on Steam. However, the number of players quickly dwindled until the game was eventually shut down for almost a year.
It was relaunched in May 2024 and attracted over 114,000 concurrent players. However, just like before, MultiVersus continues to struggle with keeping its players. The daily players have now dropped below 2,000.
Warner Bros. will focus its development efforts on four games going forward
During the call, Zaslav identified four strong franchises that have been profitable for Warner Bros. Going forward, the company plans to put more effort into its most successful franchises.
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“I think we’re through some of the worst — and it hasn’t been pretty — on the gaming business,” Zaslav said during the call. “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. We’re going to go away from trying to launch 10, 12, 15, 20 different games. I think we have a real chance now with focus to have the gaming business be steadier.”
“We have four strong and profitable game franchises with loyal, global fans: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC, in particular, Batman. We are focusing our development efforts on those core franchises, with proven studios to improve our success ratio.”
Warner Bros. is already working on a Hogwarts Legacy sequel. A definitive edition of the game is also in development. Mortal Kombat is also seeing a flurry of iconic characters join the roster. The latest to be added to the game on November 26 is Ghostface.
