Warner Bros. Discovery released its financial report for the third quarter of 2024. The company is experiencing significant losses in its gaming division.
MultiVersus
- The revenue from Warner Bros.'s gaming division dropped by 37% year-over-year.
- The company explained that last year's growth was driven by the highly successful release of Mortal Kombat 1 in September. This year, there are no such drivers.
- Operational expenses for gaming content rose by 47% — partly due to a $122 million write-down.
- The losses this quarter are mainly associated with MultiVersus by Player First Games. Released in late May, the fighting game underperformed the company's expectations.
- As a result, total write-offs since the beginning of the year have exceeded $300 million, including $200 million in losses from Suicide Squad: Kill the Justice League.
- In a call with investors, Warner Bros. acknowledged that the current results of its gaming segment are "quite far from the expected potential."
- Company CEO David Zaslav emphasized that the company will focus on four main franchises: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC (especially Batman).
- Upcoming plans include the development of a sequel to Hogwarts Legacy, which is deemed to have "very high priority" according to Warner Bros. representatives.
- Chief Financial Officer Gunnar Wiedenfels shared the decision made by management in response to the situation: "We are moving away from attempts to release 10, 12, 15, or even 20 games simultaneously. Now we have a real chance, by focusing on the quality of projects, to make our gaming business more stable."
- Wiedenfels is confident that the company will return to "at least $3 billion and then begin a rapid growth." However, he did not specify which metric he was referencing.