Netflix’s proposed $72bn acquisition of Warner Bros is already raising concerns from president Trump to actors, screenwriters and theatre owners. And there are still questions to be answered over the new entity’s potential market dominance before the deal gets approved.
But after Warner Bros confirmed that its games business would indeed be part of the deal – if it goes through – the next question is what happens to Warner-owned studios NetherRealm, Rocksteady, Avalanche and TT Games – as well as Warner’s plethora of licensed titles.
Let’s start with Warner’s owned titles. According to Appmagic, Warner Bros’ self-published mobile games earned about $4.4m combined in the last 30 days. And as you can see in the top ten earners below, these estimates suggest that Warner’s mobile portfolio might end up being a rounding error within Netflix’s giant content production machine.
The immediate question is what Netflix might do with all of these free-to-play games, which do not fit into its current games strategy at all. Outside of those top earners like Game of Thrones Conquest and Mortal Kombat, it’s hard to see a future for many of Warner’s current self-published mobile games.
Netflix has been known to rework old free-to-play games, strip out the monetisation, and add them to its mobile portfolio – but that was under previous boss Mike Verdu. As we’ve reported before, current Netflix Games boss Alain Tascan has a rather different strategy.
The games outside the top five above may not even survive the 12-18 months the deal is expected to take to pass regulatory approval.
Warner Bros’ licensed games appear to be in better shape, though.
Jam City, Zynga and Funplus’ successful Harry Potter, Game of Thrones and DC-based games may well survive a buyout due to the licensing agreements already in place.
And while of course Warner takes a far lower percentage of these earnings, keeping these licensed games running with experienced partners like these is (relatively) easy money. The long-term future of these games under a combined Netflix-Warner entity would then depend on how long these licensing agreements last for, and whether a new-look Netflix Games would want to renegotiate or simply cancel these agreements once complete.
To date, Warner’s games division has barely been referenced in the official Netflix and Warner Bros announcements so far, and understandably so: the play here is for the IP, movies and TV shows.
When – or if – the Netflix-Warner deal is complete, Netflix could well set its internal studios including Next Games, Moonloot and Night School on new Harry Potter, Game of Thrones, DC or Looney Tunes-based projects. But there’s a long way to go yet.
We may well see more detail added around gaming as the deal moves through the approvals process, which is expected to take 12-18 months. But for now, Warner’s games teams and its licensing partners are facing the same uncertainty and doubts over their futures as many other game teams being acquired have faced in the last few years.
