WB Discovery wants to license franchises, including Batman, Harry Potter and more, to other studios

Batman. Justice League. Harry Potter. Looney Tunes. Game of Thrones. Warner Bros. Discovery's list of intellectual properties is massive, and much of it seems ripe for adaptation into video games. If you think WB has been a little slow to capitalize on that library, company leadership seems to agree, and will not only develop more of its own games, but also license some of its biggest franchises to other game studios in the future.

Today on Warner Bros. Discovery's second-quarter earnings call, CEO David Zaslav and JB Perrette, president of global streaming and gaming, responded to a question about the “strategic value” of gaming to Warner Bros. given its recent “uneven performance.” The company had just reported a 41% year-over-year decline in gaming revenue due to the underperformance of Suicide Squad: Kill the Justice League compared to the tremendous success of Hogwarts Legacy last year. Does WB consider gaming a core part of its portfolio?

The answer seems to be yes. Both Zaslav and Perrette said they wanted to grow the gaming business, particularly in the free-to-play space, which Perrette said can help smooth out some of the ups and downs of the cyclical console industry. That's one reason WB acquired Player First Games, the developer of Multiversus, earlier this year.

Zaslav added that not only does WB want to continue using its 11 studios, but there is also “a lot of interest from others to use some of that intellectual property for games, which we are looking into.”

Below are the full answers from both:

Perrette: We look at the evolution of storytelling in interactive entertainment as a space and say it's one of the unique areas in media that's growing, both in terms of time spent, engagement and revenue. And so we still see this as a huge opportunity for us. We know that for our franchises, particularly in a world where the games industry is getting harder and harder to launch brand new franchises for a number of reasons including the devaluation of the IDFA and greater marketing and customer acquisition challenges. And that franchises like ours are in high demand and can help launch games. You still need a great game and the reality is we've been unlucky – in a short 12-month period we had the record year in 2023 with Hogwarts Legacy and unfortunately the opposite with Suicide Squad. And some of those businesses are still based on hits, but one of the areas we're particularly focused on, which accounts for about half of the $200 billion games business, is the free-to-play space.

And the Player First deal was actually to strengthen our capabilities in that space. Because we believe we're underperforming and we have more opportunity to grow in that space, which is a big part of the market. And if we can do that, it will also help bring more balance to our games business away from the inevitable cyclicality of more console-based releases that have a 3-4 year time horizon and are a little bit more erratic, even if you do it right. So we continue to believe strongly in the games space, we want to continue to see and figure out how we can get into that and get bigger in that space, and we'll certainly tell you more about that as we go along.

Saslaw: One of the strategic advantages of owning all of our intellectual property is that, as the world has changed, in the past you would put out a movie or a TV series and then make a game. But one of the reasons Hogwarts Legacy was so successful and was the No. 1 game last year was because you went to Hogwarts Legacy, you went into the game and you could become part of that world. I think that's ultimately a big part of the direction this industry is going. We'll make a movie, whether it's Batman or Superman or Harry Potter, and maybe there'll be a TV series, but the ability to immerse yourself in that world and have the experience of spending time with all of the characters is something that's still ours. We have 11 studios here and we have a lot of intellectual property. And there's also a lot of interest from others to use some of that intellectual property for games, which we're looking at. Because like JB said, we need to get bigger, and the intellectual property that we own and the value that it has in the gaming space is something we want to leverage.

Warner Bros. Discovery reported revenue of $9.7 billion for the quarter, but a total net loss of $10 billion, with $9.1 billion of that related to impairment charges. The company also reported that subscribers increased by 3.6 million compared to last quarter, bringing the total to 103.3 million.

Rebekah Valentine is a senior reporter at IGN. Have a story tip? Send it to [email protected].

WB Discovery wants to license franchises, including Batman, Harry Potter and more, to other studios

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