As revealed in their Q3 2023 earnings call, it seems Warner Brothers Games will be shifting their focus to live service games in the future. For many, this probably comes as a great shock, since Warner Brothers Games are primarily known for their more traditional single player titles, but it does seem that the future of Warner Brothers is in live service.
As stated before, this is a surprising move considering WB Games’ recent history. Warner Brothers Games focused on more completed traditional focused single-player games such as Rocksteady’s Batman: Arkham Asylum series, Monolith Productions’ Middle-Earth: Shadow of Mordor series, as well as IO Interactive’s Hitman franchise with the occasional multiplayer game thrown in such as TT Games’ Lego franchise and Netherrealm Studios’ Mortal Kombat and Injustice games. Just earlier this year even, Avalance Software’s Hogwarts Legacy was a massive success, selling 12 million copies in its first two weeks and making over billion in sales all before its console release.
To say that this move is shocking is quite the understatement, especially now that live-service games are largely seen negatively by gaming audiences, and while perhaps you could see this being the future of the company with Rocksteady’s Suicide Squad adopting a live service model and with unlockable cosmetics seen in Mortal Kombat 1 and Hogwarts Legacy such a bold company-wide transition still comes quite out of left field, though it seems that this decision comes from one of ambition to aim higher than even Hogwarts Legacy’s lofty heights.
We’ve been profitable in each of the last 15 years averaging more than $400 million in EBITDA the last three years alone. We believe games is a critical and very valuable asset for the company with a great deal of potential for growth. Games has consistently enjoyed among the highest ROIs of any of our businesses. And while we’re smaller than some of the leading pureplay gaming companies, our operating margins are comparable to the best of the public companies. We’re clearly punching above our weight and we’re just getting started.
While on one hand, it seems natural to want to find a way to increase profits even more, on the other this decision seems risky as many live services games such as Anthem, Marvel’s Avengers, Fallout 76, and Lawbreakers all adopted a similar live service model and all consequently failed so spectacularly that they were each the face of a community-wide mocking for months or even years after their releases.
But still, Warner Brothers Games have been exceedingly successful so far, so perhaps they have a secret to using their various IPs to create successful live service games. But so far as this transcript goes, as well as the community reception, one can’t help but feel that this decision is woefully out of touch.