Netflix Sees No Value In Warner Bros. Games, But Are “Super Excited” To Exploit The “Properties They’ve Built”
It looks like it’s out of the frying pan and into the fire for Warner Bros. Games, as after a rough few years of sub-par output and lackluster sales, their parent company’s recent purchase by Netflix looks to spell significant trouble for the embattled video game home of Harry Potter, Mortal Kombat, and the larger DC universe.
As previously reported, December 6th saw Netflix and Warner Bros. enter into a ‘definitive agreement’ wherein the former will acquire the entirety of latter’s media portfolio, as recently separated from its Discovery Global content and including everything from DC’s comic book library to the full The Lord of the Rings film rights, in exchange for an approximate $82.7 billion USD, as split between an upfront payment of roughly $70 billion and an agreement to take on roughly $10.76 billion of the studio’s debt.
Though both entities have shaken on it, the sale is far from a done deal, as its specifics still need to undergo review from various regulatory boards including the United States’ Federal Trade Commission and Britain’s Competition and Markets Authority.
Unfortunately for those studios under the umbrella of WB Games, including Hogwarts Legacy developer Avalance Software, Mortal Kombat franchise stewards NetherRealm Studios, and Rocksteady Studios of Suicide Squad: Kill the Justice League fame, Netflix’s massive offer was made with absolutely zero consideration or interest towards their video game offerings.
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Asked during their post-announcement press call, as attended by both investors and members of the media, if “the Warner Bros.’ assets enhance or accelerate the success on the gaming side” of their operations (which currently consists of a handful of in-app-streamable titles, including Red Dead Redemption and Teenage Mutant Ninja Turtles: Shredder’s Revenge), Netflix co-CEO Gregory K. Peters explained, “It’s worth going back again to sort of how we thought about the deal and building our valuation model, while they definitely have been doing some great work in the game space, we actually didn’t attribute any value to that from the get-go because they’re relatively minor compared to the grand scheme of things.”
“Now we are super excited because some of those properties that they’ve built, Hogwarts Legacy is a great example of that, have been done quite well, and we think that we can incorporate that into what we’re offering,” he added. “They’ve got great studios and great folks working there. So we think that there’s definitely an opportunity there. But just to be clear, we haven’t built that into our deal model.”
While Netflix’s indifference towards WB Games’ existence does not inherently guarantee that the publisher and its subsidiaries will be hung out to dry in a future effort to ‘maximize shareholder profit’, the odds are not in its favor, especially as their recent stumbles have likely left them on thin ice with their new stream-centric overlords.
After all, why would Netflix invest significant amounts of time or money developing a return to form for the Batman: Arkham series or experimenting with a new application of their copyrighted Nemesis System when they could just, say, earn easy nostalgia bucks by throwing the entirety of Traveller’s Tales’ LEGO outings up on their service?
As it stands, absent any concerted efforts from Netflix towards developing their portfolio, WB Games’ future is absolutely bleak.
