Warner Bros, the entertainment powerhouse, has recently disclosed a significant downturn in its gaming division, reporting a staggering 53% drop in revenue for 2024. This revelation comes from the company’s 10-K filing with the SEC, which indicates an overall content revenue decline of eight percent, primarily driven by the sharp decrease in gaming revenue. In the final quarter of 2024, the company experienced a 29% year-on-year decrease in games revenue, highlighting the challenges faced within this segment.
Challenges and Strategic Refocus
The decline in revenue can be attributed to the previous year’s successful launches of titles such as Hogwarts Legacy and Mortal Kombat 1. However, the company’s 2024 lineup, which included the superhero adventure Suicide Squad: Kill the Justice League and the character brawler MultiVersus, fell short of expectations, contributing to the disappointing figures.
In light of these challenges, Warner Bros has made the difficult decision to close several studios, including Monolith, Player First, and its San Diego studio. In a letter to shareholders, the company acknowledged the disappointing performance of its Games business in 2024 and outlined a restructuring plan aimed at reallocating resources toward established intellectual properties (IP) and games from renowned studios.
- The firm is now concentrating on four key franchises that have previously generated over billion in consumer sales:
- Harry Potter
- Game of Thrones
- Mortal Kombat
- DC Comics – with a particular emphasis on iconic characters like Batman
Reflecting on the past, Warner Bros noted that just two years ago, its Games team achieved a remarkable milestone with Hogwarts Legacy, establishing a new franchise that became the best-selling game of the year—a feat accomplished by only three other franchises in the last 15 years. This success fuels the company’s confidence in its revised strategy, which aims to produce high-quality games designed for long-term consumer engagement.
Warner Bros anticipates that this renewed focus will not only restore profitability to its Games division by 2025 but also position it as a more substantial contributor to the company’s growth in the future.
