Warner Bros. Discovery Reports Q4 29% Drop In Video Game Revenue Compared To Same Period Last Year, Admits “2024 Was A Disappointing Year For Our Games Business”
In yet another black eye resulting from their ongoing mismanagement of their video game operations, Warner Bros. Discovery has reported that compared to the same period the year prior, Q4 2024 saw their WB Games subsidiary suffer a staggering 29% loss in revenue.
This unfortunate financial result was personally confirmed by WBD as part of their Q4 2024 earnings report, as presented to the public on February 27th.
Therein addressing the specific performance of their Games segment over October, November, and December of last year, the DC parent company informed its investors, “Games revenue decrease 29% [excluding losses resulting from changes in foreign currency exchange rates], due to the better performance of Hogwarts Legacy and Moral Kombat 1 in the prior year [2023] quarter vs. current year releases.”
Offering a more detailed insight into these numbers in an accompanying shareholder letter, the company asserted that while they “continue to see our Games business as a strategic differentiator”, its performance the past year was far from what one would consider ‘healthy’.
“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,” said WBD, referencing their recent closure of their Player First Games, Monolith Productions, and WB San Diego 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.”
Given the specific mention of The Dark Knight, it should be noted that their emphasis of the hero’s return to video game prominence interestingly comes just a little over a week after Bloomberg’s Jason Schreier reported that, in light of both the failure of Suicide Squad: Kill the Justice League and WB Games’ desperate need for a hit, Arkham series developers Rocksteady Games were quietly gearing up to revisit Batman and take another run on the streets of Gotham (and possibly Neo Gotham at that).
As for WBD’s claim that a discrepancy in performance between each year’s respective Q4 releases is a major factor in their recent financial stumble, this read was already evident to anyone who even remotely follows video game news.
Compared to 2023’s absolutely gangbusters Hogwarts Legacy and moderately popular Mortal Kombat 1, 2024 only offered the Meta Quest exclusive Batman: Arkham Shadow VR outing and the Nintendo Switch port of Harry Potter: Quidditch Champions, the former holding an exceptionally small maximum install base and the latter coming long after most potential customers had long learned of the game’s mediocre quality.
As noted above, far from being ignorant of the hole they currently find themselves in, WBD recently announced that in order “to structure our development studios and investments around building the best games possible with our key franchises – Harry Potter, Mortal Kombat, DC and Game of Thrones,” they had made the decision to close “three of our development studios – Monolith Productions, Player First Games and Warner Bros. Games San Diego.”
“This is a strategic change in direction and not a reflection of these teams or the talent that consists within them,” they explained of their decision to axe the respective Middle-earth: Shadows of series, MultiVersus, and San Diego support studios. “As difficult as today is, we remain focused on and excited about getting back to producing high-quality games for our passionate fans and developed by our world class studios and getting our Games business back to profitability and growth in 2025 and beyond.”
While the future currently remains uncertain, it seems like WB Games’ next and best hope for survival will be Avalanche Studios’ upcoming sequel to Hogwarts Legacy, as set to release sometime in the coming years.
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