Warner Bros. Discovery has released its latest earnings report, and included in the filing are details about how the company’s much-discussed gaming business is doing–and it’s not great.
The company reported “impairment” charges of $50 million for the latest quarter and a $384 million for the full year ended December 31, 2024. As announced previously, 2024’s Suicide Squad: Kill the Justice League led to a $200 million negative impact for WBD’s bottom line.
WBD did not provide a full accounting for the $384 million in total yearly impairment charges. Impairment charges are defined as a process through which a company writes off assets for, among other things, tax purposes. Impairment charges can also pertain to acquisition costs. WBD bought MultiVersus studio Player First Games in 2024, only to just recently announce its closure, alongside the shutdown of Monolith and WB San Diego.
WBD reported that its “games content expense” fell by 20% during the fiscal year, mainly driven by lower revenue overall, but offset by some impairment charges. Lower revenues were always expected in 2024, as Hogwarts Legacy in 2023 led to a huge surge in revenue. The game was 2023’s best-selling title overall, even outselling that year’s Call of Duty game.
As for WBD’s big gaming releases in 2024, Kill the Justice League was a disappointment, while Harry Potter: Quidditch Champions didn’t exactly break out in a significant way. MultiVersus, meanwhile, failed to find a sustained audience and is shutting down this May. Batman: Arkham Shadow for Meta Quest 3 was released in October 2024, but VR titles are not known to be significant revenue-drivers.
In the earnings report, WBD said 2024 “was a disappointing year” for the video game business. The company said its recently announced restructuring–which included the closure of three studios, layoffs, and the cancellation of a Wonder Woman game–could help the company return to positive growth.
During an earnings call, WBD management said 2024 was a “real outlier” year in terms of negative performance, following a “positive outlier” year in 2023 due to the outsized success of Hogwarts Legacy. Going forward, WBD is going to focus on four franchises in gaming: Harry Potter, Game of Thrones, Mortal Kombat, and DC. Of course, Wonder Woman is a DC property, but WBD said it will “particularly” focus on the Batman character.
In terms of upcoming releases, Batman: Arkham Knight developer Rocksteady is said to be working on a new single-player Batman game. WB Games Montreal is reportedly pitching a new Game of Thrones title. Avalanche Software is expected to be working on a new edition of Hogwarts Legacy with more content, in addition to a full sequel. The Mortal Kombat series, meanwhile, is expected to continue from developer NetherRealm. As for other DC projects, studio boss James Gunn has said some “really interesting” projects are coming, but not soon. Game of Thrones: Kingsroad, a mobile and PC game featuring characters from the show, is coming later this year–a free demo is available now on Steam.
WBD management said the breakout success of Hogwarts Legacy gives the company the confidence that it can “get back to producing high-quality games built for long-term consumer engagement.” The company said it expects its video game division to return to profitability in 2025 with the games division looking to become a “more significant contributor to growth in the years ahead.”
WB’s longtime gaming boss, David Haddad, announced in January that he is leaving the company but will stay on for the time being to help with the transition process.