What is going on with WB Games’ strategy?

Warner Bros. Games has been discussing its business strategy over the past several weeks, but it seems to be full of contradictions. Hogwarts Legacy, its AAA single-player Harry Potter game, was one of the top-selling games of 2023, but the company instead intends to focus on live-service and free-to-play games in the future, like its underperforming Suicide Squad: Kill the Justice League. WB Games is reviving a game it took offline last year before unpublishing a suite of games that have been playable for years. That’s not to forget that the game that’s being revived, Super Smash Bros.-like brawler MultiVersus, features characters from several of Warner Bros.’ botched properties, like the Space Jam reboot, Black Adam, and a whole slate of Looney Tunes in the aftermath of Coyote vs. Acme.

It’s a few weeks that have left a lot of people asking: What is going on with WB Games’ strategy?

The company has been in a weird state of uncertainty for a while. Warner Bros. Games is part of Warner Bros. Discovery’s Global Streaming and Interactive Entertainment unit. It was previously known as Warner Bros. Interactive Entertainment before AT&T spun off WarnerMedia and merged it with Discovery to create the new company Warner Bros. Discovery. (Got all that?) For a while after the merger, the fate of Warner Bros.’ gaming division was unclear; AT&T originally told IGN that some of its game studios would be sold, but not all. In the end, only mobile developer Playdemic was sold off. (Before the merger, in 2020, AT&T was reportedly trying to sell off the gaming division for up to $4 billion, but the company ended up keeping it. That was, ultimately, a good decision, because games have “contributed strongly” to Warner Bros. Discovery’s finances.) But, like the rest of the industry, Warner Bros.’ games division exists during a period of volatility.

Image: Rocksteady Studios/Warner Bros. Games

We’ve been getting a better idea of what’s going on recently. Warner Bros. Discovery streaming and games president and CEO Jean-Briac Perrette outlined its video game strategy during a Morgan Stanley event in early March, where he confirmed the company is “doubling down on games” as a “growth opportunity” by using its wide breadth of intellectual property. (Warner Bros. is obsessed with its owned IP; Variety said in January that company CEO David Zaslav “can’t go one earnings call without boasting about the power of the company’s rich trove of IP.”) But Perrette also described the video game industry as “volatile” — and said that the success of big-budget games like Hogwarts Legacy is not guaranteed.

Though the Harry Potter game was a massive success — it broke Call of Duty’s four-year streak as the number one game in the U.S. — 2024’s Suicide Squad: Kill the Justice League, the company’s other recent big-budget video game, underperformed. Inexplicably, Perrette said Warner Bros. wants more live-service games (a genre Kill the Justice League falls into) to mitigate some of that volatility. “Rather than just launching a one-and-done console game, how do we develop a game around, for example, a Hogwarts Legacy or Harry Potter, that is a live service where people can live and work and build and play in that world on an ongoing basis?” Perrette said.

Regardless, MultiVersus is expected to play a major role in that live-service plan, tapping into both the attention Warner Bros. seeks from its players and the usage of its extensive roster of characters. The thing with MultiVersus, though, is that Warner Bros. and developer Player First Games pulled the game from digital stores in April after its release in 2022 with the plan to relaunch it in 2024. Though the game was technically in open beta, that wasn’t entirely clear to all players. People were obviously disappointed to see the game go offline, especially those who had invested money into characters and other microtransactions. But even before going offline, the game struggled. MultiVersus had lost 99% of its player base on Windows PC by just six months after its release, largely due to a dearth of content. For MultiVersus to succeed this time around, Warner Bros. does need to be more aggressive in what it releases; perhaps with its emphasis on live service, it will.

By most counts, Warner Bros.’s two recent live-service projects have failed, which aligns with the state of live service as a whole. It just might not be the smartest place to invest in. Yes, it means people are engaged for a long time — but only if they feel compelled to stay. Live-service games aren’t necessarily dying (Fortnite remains popular, among others), but the genre is changing. Several live-service games were shut down last year, like Epic Games’ Rumbleverse, which went offline a mere six months after launch. Destiny 2, which was once immensely successful, has seen dwindling player numbers recently, leading to layoffs at the Sony-owned Bungie. The conglomerate of Warner Bros. Discovery intending to invest more in an area that’s proven less successful recently is a decision that feels misguided, but not entirely surprising when considering some of Warner Bros.’s other moves, inside gaming and elsewhere.

Image: Player First Games/Warner Bros. Games

Coyote vs. Acme, the completed yet shelved movie that shares a lot of character crossover with MultiVersus, is just another example of this sort of confusing decision; Warner Bros. canceled the movie based on a shift toward a “global strategy to focus on theatrical releases,” according to The Wrap. (It made a similar move in deleting its $90 million Batgirl movie.) After that, a source close to Coyote vs. Acme told The Wrap that axing a finished movie was then seen as “an acceptable means of dealing with a problem.” It appears that Warner Bros. games executives took a lesson from that strategy when the division decided to delist a slate of Adult Swim Games titles from Steam and other digital stores. Warner Bros. has yet to comment on this move, which was reported after several developers were notified that their games were going offline and that they couldn’t regain control of them. Eighteen or more games could be impacted, but the final number isn’t clear yet. To put that into perspective, the majority of these games have been published for years — some more than a decade. Both developers and players were baffled to hear the news: Why take a game offline that’s been around for years?

Warner Bros., again, hasn’t commented, which has just left speculation that the company is prioritizing short-term gain over long-term sustainability. Taking these games offline could mean short-term benefits, in that there’s no cost for upkeep — if there was much to begin with — and no accountability for Warner Bros. to issue royalties. But Warner Bros. could also see it as a way to “streamline” its video game catalog to realign with its new focus on its live service and mobile offerings.

Warner Bros. will still make single-player experiences, of course — it’s got a Wonder Woman game in the works currently, plus whatever else its 10 or so owned studios are working on — as part of its “strategic investment plan” that Perrette briefly mentioned in early March. Perrette expects the vision to come to life in 2025 and beyond as the company lays the new foundation for this strategy. The one thing we do know is that Warner Bros. IP is king, with Harry Potter, Game of Thrones, DC, and Mortal Kombat all valued at $1 billion each within the video game industry, Variety claimed. And there’s no doubt that Warner Bros.’ IP slate is impressive, which could be the boon Warner Bros. ends up banking entirely on.

“A very consistent message coming from the executive layer of Warner Bros. Discovery is the importance of franchises,” David Haddad, president of Warner Bros. Interactive, told Variety in January. “There’s a unique and important role games have in keeping our franchises relevant, resonant and exciting, because there’s plenty of fans and plenty of people consuming content where games are their starting point.”