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Warner Bros. Discovery shared its second-quarter financial results on Wednesday and outlined plans to expand its video game offerings by leveraging its popular intellectual properties (IPs). The company aims to both develop games in-house and license its IPs to other studios. While Warner Bros. has had success with titles like *Hogwarts Legacy*, which became the best-selling game of 2023, many of its major franchises remain underutilized in the gaming industry.
During the Q&A session of the earnings call, CEO David Zaslav revealed that there is significant interest from external studios to create games based on Warner Bros.’ IPs. He mentioned that the company owns a vast library of IPs, with 11 internal studios, and noted the growing demand from others to use those properties in gaming.
JB Perette, CEO and president of global streaming and games, echoed these sentiments, stating that Warner Bros. franchises are in “high demand” and could be pivotal in launching new games. He also highlighted the free-to-play gaming segment as an area of focus, despite the mixed results seen with some of the company’s high-budget titles.
In 2023, *Hogwarts Legacy*, based on the *Harry Potter* franchise, sold over 22 million copies and was the top-selling game of the year. However, 2024 saw a stark contrast with the release of *Suicide Squad: Kill the Justice League*, which was both a critical and commercial failure, leading to a 41% drop in Warner Bros.’ gaming revenue for the second quarter of 2024.
Perette commented on the sharp decline, explaining how the company went from a record year with *Hogwarts Legacy* to the opposite end of the spectrum with *Suicide Squad*. Zaslav and Perette were responding to questions about the inconsistent performance of Warner Bros.’ games and the strategic importance of gaming within the company’s portfolio.
Although Warner Bros. Games has released successful titles based on properties like *Batman* and *Harry Potter*, several major franchises, such as *Game of Thrones* and *Superman*, have not been fully explored in the gaming space. Zaslav emphasized that the company needs to capitalize more on its IPs in the video game industry, pointing out the immense value of its properties in this area.
In a previous earnings call in November 2023, Warner Bros. announced plans to transform its biggest franchises into live-service games, aiming to extend the life cycles of its releases and increase post-purchase revenue. The company’s biggest gamble on this model was *Suicide Squad: Kill the Justice League*, which included planned post-launch content. However, the game faced criticism for its live-service approach and poor sales, resulting in a $200 million loss for Warner Bros.
Despite the setback, Warner Bros. reaffirmed its commitment to the live-service model in March 2024, maintaining that it sees long-term potential in this strategy, even in the face of *Suicide Squad’s* underperformance.
