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Warner Bros. is very happy with its games division, but wants more live service

WB Games is seeking to pivot towards live-service games
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Warner Bros. CEO David Zaslav sounded like a happy man talking about WB Games in the group’s latest earnings call, highlighting the company’s recent successes with Hogwarts Legacy and Mortal Kombat 1, which surpassed three million units sold since release.

“We've worked really hard on our games business for the last year and a half,” he said, “and it's also a business where we have had a strong track record. Games have been a very successful and steady segment for Warner Bros. for over a decade. We've been profitable in each of the last 15 years averaging more than $400 million in EBITDA the last three years alone.”

A student riding on a griffon.

WB Games' numbers are soaring sky-high, but leadership wants even more.

He continued: “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.”

That said, changes still seem to be afoot when it comes to WB Games’ business philosophy. Instead of big single-player games like the Batman: Arkham trilogy or Hogwarts Legacy, the leadership envisions a pivot to live-service games. Zaslav summarized these efforts as follows: “Our focus is on transforming our biggest franchises from largely console and PC based with three-four year release schedules to include more always on gameplay through live services, multiplatform and free-to-play extensions with the goal to have more players spending more time on more platforms. Ultimately we want to drive engagement and monetization of longer cycles and at higher levels.”

Presumably, that means more titles like the Suicide Squad loot shooter, which is currently in a bit of a development limbo after its latest delay.

It’s an interesting development from a DC versus Marvel perspective as well: WB Games and DC used to dominate the market for epic superhero games with single-player titles like Arkham, while Marvel struggled in this regard aside from Insomniac’s Spider-Man series. But now Marvel has a full pipeline of such titles in the works with Wolverine (Insomniac), Captain America (Skydance), Iron Man (Motive), and Black Panther (Cliffhanger), whereas WB Games’ only known project aside from Suicide Squad is a Wonder Woman game from Monolith.