Warner Bros. had its earnings call yesterday, where it revealed that gaming revenue is down 41% and things aren’t looking good in other parts of its sprawling business either. I’ll admit to feeling a bit of petty glee at this news: seeing David Zaslav, a man who seems to hate everything his company makes, reap the consequences of his actions feels a little good, even if those consequences are, for him, stock price drops. For the rest of us, they could be more enshittification and slop.
On the gaming side, some of this revenue drop can be blamed on the failure of Suicide Squad when held against the–sigh–success of Hogwarts Legacy. Back in March, gaming head JB Perrette felt the way forward after Suicide Squad was more live service, leaning into the WB conglomerate of properties to make forever games off of. On yesterday’s call, that still appears to be the plan, with Perrette saying,
We know that our franchises, particularly in a world where the gaming industry-launching brand new franchises is getting harder and harder for a number of reasons, including IDFA deprecation and more challenges with marketing and customer acquisition. And that franchises like the ones that we have are in high demand, and can help in launching games.
Perrette said that “one of the areas we are particularly leaning into, which is about half of the $200 billion games business, is the free-to-play space,” as evidenced by WB’s purchase of MultiVersus developer Player First last month. So buckle up for microtransactions, I guess.
Zaslav, meanwhile, said something that fills me with such dread that I’ll drop the whole quote here, with added emphasis, and then break it down:
One of the strategic advantages of owning all our IP is, as the world has changed, it used to be you launch a movie or you launch a TV series, then you do a game. But one of the reasons that Hogwarts Legacy was so successful and the #1 game last year, you went to Hogwarts Legacy and you entered the game and you were able to become part of that world. That ultimately I think is a big piece of where this industry is going. That we'll create a movie, whether it's Batman or Superman or Harry Potter, and maybe there'll be a TV show, but the ability to go in that world and have that experience of spending time with all the characters is something that we still own. We have 11 studios here, and we have a lot of IP. And there's also a lot of interest among others in coming to take advantage of some of that IP for gaming, which we're looking at. Because as JB said, we need to get bigger, and the IP that we own and the value that it has in the gaming space is something we're looking to take advantage of.
There’s no denying the appeal of Hogwarts Legacy was primarily that if you can somehow still stomach Harry Potter despite JK Rowling, you got to play a game in a world you recognize. As I’ve written before, that dopamine hit of recognition is one of the only two values the owners of these properties get from owning them (the other is money), so it’s no wonder they think it’s what the rest of us want from them too.
One thing Zaslav seems to be saying here is that WB’s movies and tv shows could be games, and vice versa. There’s no better example of this, for me, than WB-owned HBO’s The Last of Us, which showed a trailer for its second season last weekend. That series, an original idea in 2013 when the first game premiered, has become some kind of weird ouroboros: a game that felt like a movie becoming a tv show that looks just like the game, surrounded by multiple remasters of itself. It gets gamers into HBO, and HBO viewers into games, and if you were Zaslav and Perrette, with a stable of both movie and game studios at your disposal, of course you’d fall in love with how much value you could squeeze out of something without actually, essentially, creating anything new.
But Zaslav is also saying that, not only could WB squeeze its properties for everything they’re worth, but it could license them out to other companies too. So not only could WB pump out more movie tie-in games or game tie-in movies and shows, but other game studios, equally desperate, could start doing that too. And while I don’t necessarily fault any game studio looking to up their chances for a hit in these shaky times, I’m not sure spending a ton of money to license an IP is the first solution I’d look to when considering ballooning AAA costs.
We're already seeing this happening in games. I might be one of the few people in the world who booed when Arkane Lyon revealed its Blade game in 2023; a studio who does things as risky and interesting as Deathloop and Dishonored making a Marvel game felt disappointing to me, even if I’m sure they’ll do a good job with a world I will cop to having zero interest in. Truth be told, I feel the same about Hitman developer IOI’s delve into James Bond, or Wolfenstein developer MachineGames’ upcoming take on Indiana Jones. I don’t want these studios hampered by existing fandoms and a bible full of rules about how they’re allowed to portray famous characters or well-trod lore. I want to be in IOI’s world, or MachineGames’, or Arkane’s, not Marvel’s or George Lucas’. I want these studios to be uniquely themselves, not at the service of existing culture.
But the end of Zaslav’s quote hits the nail on the head: “we need to get bigger, and the IP that we own and the value that it has in the gaming space is something we're looking to take advantage of.” He doesn’t mean “take advantage of” in the colloquial sense, but he doesn’t not mean it either. At the end of the day, all of this is just about growth for shareholders, and companies like WB are, as Ed Zitron describes them, simply “nihilistic engines for growth, anti-companies that create value by reducing what they contribute to the world.” The Zaslavian future will include games, sure, but not new ones; instead, we could see more games but less substance, more iterations on the same old things whose main purpose is just to put more money in men like Zaslav’s pockets.
