It’s after 5pm on a Friday, but no force on this Earth can stop me hurrying back to my desk to report on a large financial transaction. Also, we should have written this up earlier, but we were busy deciding which are the objectively correct 100 best PC games.
I’m not… sure we put any Warner Bros games in that list. I’ve just done a CTRL-F for “Batman” and got zero results. I know, WTF – Arkham Asylum is amazing. Mark needs to stop driving things and think about capes for a change. I’m sure Warner Bros aren’t too bothered about this gross oversight right now, though. Netflix have just revealed plans to buy their entertainment business for $82.7 billion in stock and cash.
The deal follows an announcement in June that Warner would split in two, with one “Streaming & Studios” operation including Warner Bros. Motion Picture Group, DC Studios and HBO, while the other, “Global Networks”, encompasses sports and TV news such as TNT and CNN. Netflix want to buy the Streaming & Studios part, pending regulatory approvals in the next 12-18 months, which includes several game studios: Hogwarts Legacy creators Avalanche, Lego devs TT Games, Mortal Kombat studio NetherRealm and Rocksteady of Batman Arkham fame, who also made Suicide Squad: Kill The Justice League.
As with any large corporate acquisition, it seems likely all this is going to lead to layoffs and cancellations as the acquiring company seek to recoup some of their outlay, and show the shareholders they’re running a tight ship. Assuming the deal goes through, Netflix have said they hope “to realize at least $2-3 billion of cost savings per year” over three years.
Warner’s games division haven’t been doing well lately, and there have already been some major cuts. Suicide Squad was a disaster, leading to layoffs at Rocksteady this January. In February, Warner closed Monolith, Player First Games and Warner Bros Games San Diego. In March, Bloomberg reported that a Hogwarts Legacy expansion had been cancelled. In May, Warner pulled support for comicbook Smash ‘em up MultiVersus while announcing the end of major updates for NetherRealm’s Mortal Kombat 1; they also revealed a 48% revenue drop for their most recent financial quarter.
It’s naturally a bit worrisome in this context that Netflix’s press release announcing the proposed acquisition doesn’t really mention games, save for Squid Game and Game Of Thrones. The focus is firmly on broader “entertainment”, streaming and Warner’s various intellectual properties. Netflix already have a videogame business, of course, but they’ve experienced reversals of their own in the past couple of years, and seem inclined to focus right now on TV and film.
