By Sagar V. Mankar Warner Bros. Discovery (WBD) recently unveiled the results for the second quarter of this year (April 1st to June 30th) and the numbers are not in their favor.
As per the report, WBD witnessed a significant drop in its gaming revenue, with a decrease of over 41% compared to the previous year’s Q2.
The reason they cited here is “the weak performance of the highly anticipated game, Suicide Squad: Kill the Justice League compared to the strong performance of Hogwarts Legacy in the prior year (Q2 of 2023).”
Hogwarts Legacy set such a high bar, making it difficult for Suicide Squad: Kill the Justice League to level up that success.
In the last quarter (Q1 of 2024) also, they recorded a 20% drop in gaming revenue and cited the same reason.
But let’s face it—Suicide Squad didn’t just miss the mark; it barely even reached the starting line.
Upon its release in February 2024, Suicide Squad: Kill the Justice League peaked with a concurrent player count of just 13,459 on Steam, according to SteamDB. Unfortunately, that number quickly nosedived, dropping below 1,000 by the end of the month.
Despite efforts to rejuvenate interest in the game, such as launching a second season in July featuring the new character Mrs. Freeze (aka Victoria Frias), the game’s player base continued to dwindle. In the last 24 hours, it recorded a peak of just near 200 players, reflecting an 86% drop from its initial peak.
Though WBD has been tight-lipped about the exact sales figures for the game (possibly too embarrassed to share as they avoided it since the beginning), earlier reports suggest the company suffered a $200 million loss on the project.
During the Q4 2023 earnings call on February 23rd, just 20 days after the game’s release, WBD’s CFO Gunnar Wiedenfels admitted that the game had “fallen short of our expectations.”
This flop has significantly contributed to the decline in gaming revenue over the last two quarters, and it could continue to have a ripple effect in the coming months, especially with their next major release, Wonder Woman, not scheduled until 2025.
What Is Warner Bros. Discovery’s Strategy Moving Forward?
Despite the disappointing performance of Suicide Squad: Kill the Justice League and the subsequent drop in gaming revenue, WBD executives remain hopeful about the future of their gaming division. This optimism comes amid rumors swirling on social media about a potential sale of WB Games to Microsoft.
During the earnings call, both CEO David Zaslav and JB Perrette, president of global streaming and games, reaffirmed their commitment to expanding the gaming business.
One of the key strategies they mentioned is expanding into the free-to-play space, which Perrette believes can help balance the cyclical nature of the console gaming industry. This is part of the rationale behind WBD’s acquisition of Player First Games, the developer behind Multiversus, earlier this year. By tapping into the growing free-to-play market, WBD hopes to create more stable and consistent revenue streams.
Additionally, WBD is exploring the possibility of licensing its popular franchises to other gaming companies, as reported by IGN. With a vast portfolio of IPs that includes DC, Harry Potter, Looney Tunes, and Game of Thrones, WBD sees significant potential in leveraging these assets in the gaming space. Zaslav highlighted that there is significant interest from other companies in utilizing WB’s IP for gaming, and this is something they are actively exploring.
Looking ahead, WBD’s next major console release is a Wonder Woman project, which is being developed by Monolith Productions with support from WB Games Montréal. Unlike Suicide Squad: Kill the Justice League, this game will not be a live-service title, which could help it avoid some of the pitfalls that plagued the earlier release.
Despite the challenges in the gaming division, overall Warner Bros. Discovery reported a total revenue of $9.7 billion for the quarter. However, the company also faced an overall net loss of $10 billion, primarily due to impairment charges totaling $9.1 billion. On a positive note, subscription services saw an increase of 3.6 million subscribers from the previous quarter, bringing the total to 103.3 million.
For more information, read the WBD Q1 and Q2 reports for the financial year 2024. And remember to subscribe to Gaming Foodle for more such news!