WB Discovery has commented on the commercial failures of its video games unit, telling investors that what happened in 2024 probably won’t happen again.
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WBD just posted up its Q4 2024 results, and included in the report is an update on the WB Games division. Recent reports from Bloomberg indicates that WB has shut down 3 studios (which was later confirmed) in a restructuring move that management says will help created growth in 2025.
In the prepared remarks to investors, the company indicates that WB Games currently is not profitable. The games segment recorded a total impairment charge of $384 million for the entire year; basically, WB dramatically reduced the worth of its gaming assets in 2024. The significant losses from Suicide Squad Kill the Justice League and Multiversus are the main culprits.
In the earnings call, WB CFO Gunnar Wiedenfels is optimistic that WB Games won’t see another year like 2024.
“The other point is I don’t think we’re going to see a year like 2024 again when it comes to what happened in the games business.
“This was a real outlier to the negative after maybe a bit of an outlier on the positive in 2023, but based on the restructuring that JB has implemented, I think we’re in a much better place.
“Remember, we have made real changes when it comes to managing our franchises, when it comes to driving the ancillary revenues in the consumer product segment – experiences, tours and retail, all of those things are now coordinated from the moment of green light, as opposed to being an afterthought previously, and those are real margin opportunities for every dollar we spend.”
Other prepared remarks from the company are also optimistic about the games division.
Gaming is seen as a strategic asset, but there’s no mention of licensing wholly-owned IPs out to other studios, production groups, or publishers for new projects rather than developing games in-house.
While results from these divisions were disappointing in 2024, we have taken action to improve performance and are optimistic about their long-term outlook.
We continue to see our Games business as a strategic differentiator as we immerse fans into our incredible characters and worlds through interactive game play. At the same time, Games allows us to tap into one of the fastest growing media segments and the over three billion global gamers.
As we have previously said, 2024 was a disappointing year for our Games business and we have recently announced a restructuring plan to refocus our resources and capital on proven IP and games from proven, world class studios. We are focusing our Games business around four tentpole franchises that have each generated over $1 billion in consumer sales in past years: Harry Potter, Game of Thrones, Mortal Kombat, and DC – particularly top tier characters like Batman.
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.
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.