- Warner Bros. Discovery reported a $200 million loss on the game Suicide Squad: Kill the Justice League.
- This is a reminder of how similar the video game business is to Hollywood. It's a big expense, a big reward, and a big penalty if you miss out.
- Big media companies can't ignore video games. But do you need to make it yourself?
Have you played the video game Suicide Squad: Kill the Justice League, which was released in February?
me too. And the problem for Warner Bros. Discovery, which released this game, was that very few people played the game, and those who did, really didn't like it.
As a result, the company lost a staggering $200 million on the game, it revealed in its first quarter results on Thursday.
Gunnar Wiedenfels, WBD's chief financial officer, called the game's results “disappointing” and the company reiterated the impact of the game's failure on revenue. Especially from a year ago, another game, “Hogwarts Legacy,'' became a big hit.
These are all signs that the gaming industry has been working on for a while. It's that the gaming industry is becoming more and more like Hollywood. That means they're making very big bets on potential blockbuster titles and strong ties to previously successful intellectual properties. If that strategy works, great. And when it's not…
But even by those standards, Suicide Squad is a spectacular failure, consistent with some of the worst mistakes movie studios have ever made. In 2012, for example, Disney announced it would take $200 million to make “John Carter.” A year later, the company announced it would take a loss of up to $190 million on “The Lone Ranger.”
Considering all of this, you may once again wonder whether major media companies should be involved in games at all. By the way, the mainstream media doesn't have an answer to that question. Companies like Disney sometimes invest very heavily in games, correctly determining that people who watch TV shows and movies also spend a lot of time playing games. Even if you make good TV shows and movies, you may conclude that it doesn't give you an advantage when it comes to making games and deviate from that strategy.
Warner Bros. Discovery has experienced that indecision in the past. The previous owners thought they might sell the company's gaming business, but then decided to keep the business.
This can be seen at other major media companies as well. Disney has repeatedly moved in and out of gaming, recently announcing a $1.5 billion investment in Epic Games, the developer of Fortnite. And while Netflix started building its own gaming division a few years ago, the results so far have been disappointing, and the company is rethinking its strategy.
