Suicide Squad flop leads to 41% drop in Warner Bros. gaming revenue
Will lean into free-to-play to "balance" its game business.
Gaming revenue for Warner Bros. Discovery has declined by 41 percent year-on-year due to the "weak performance" of Suicide Squad: Kill the Justice League.
The decline was part of an overall four percent decrease across studio revenue (gaming, TV, cinema) as revealed in the company's latest quarterly earnings report.
Warner Bros. Discovery is still yet to give exact sales figures for Rocksteady's Suicide Squad game, though in an earnings call in February the company's chief financial officer Gunnar Wiedenfels stated the game had "fallen short of our expectations". Later, it was revealed the company took a $200m loss on the game.
Of course, a key reason for this drop is the immense success last year of Hogwarts Legacy. It was one of the best-selling games of 2023 and by January 2024 had sold over 24m copies. Many releases would pale in comparison.
Yet Suicide Squad's performance seems particularly poor. In June, reports emerged of a tumultuous development due to a toxic culture of perfectionism and a constantly shifting vision. The game was delayed multiple times after an infamously disappointing showing at PlayStation's State of Play showcase in February 2023.
During the earnings call, Warner Bros. Discovery CEO David Zaslav and president of global streaming and games JB Perrette were questioned on the "uneven performance" of its gaming sector.
Perrette impressed the importance of free-to-play games, while Zaslav noted the possibility of licensing the company's various franchises to other gaming companies (thanks IGN).
"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," said Perrette.
"And that franchises like the ones that we have are in high demand, and can help in launching games. You still need a great game, and the reality is, we've had the unfortunate- in a short period of 12 months, we went from having the record year in 2023 with Hogwarts Legacy to unfortunately having the opposite side of that spectrum with Suicide Squad. And it is still the hit-driven nature of some of that business, but 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."
This, Perrette said, led to the company acquiring MultiVersus developer Player First, as "strengthening our capabilities" in free-to-play games would provide "some more balance to our games business from the inevitably cyclicality of more console-based releases".
Zaslav added: "We have eleven 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."
Rocksteady recently launched the second season of Suicide Squad, featuring Mrs. Freeze, though it's unclear if this has resulted in an increase in players.
Warner Bros.' next big console game will be its Wonder Woman project, developed by Monolith Productions with support from WB Games Montréal. Warner Bros. has confirmed it is not a live service game.