By Sagar V. Mankar 
Warner Bros. Discovery’s gaming division has reported poor financial results for 2024, leading to significant write-downs and a major restructuring plan that includes multiple studio closures.
The entertainment giant released its financial report for the fourth quarter and full year ended on December 31, 2024, revealing concerning numbers for its video game business.
Financial Struggles
Warner Bros. Discovery’s overall revenue reached $39.3 billion for the full year 2024, representing a 4% decrease compared to the previous year.
The Studios segment, which includes the gaming division, generated $11.6 billion in revenue, down 5% from the previous year. While specific earnings for the gaming division weren’t disclosed separately, the report indicated that gaming revenue plummeted by 29% year-over-year in the fourth quarter.
According to the company, this dramatic drop was primarily due to weak performance of current releases compared to the strong showings of “Hogwarts Legacy” and “Mortal Kombat 1” in the same period of 2023.
Financial impacts were severe, with Warner Bros. Discovery writing down $50 million on video games in Q4 alone, bringing the total 2024 impairments to $384 million. This includes a previously reported $200 million loss on “Suicide Squad: Kill the Justice League” and over $100 million in impairments for “MultiVersus.”
Restructuring and New Strategy
In a letter to shareholders, Warner Bros. admitted that 2024 was a “disappointing year” for its video game business. Despite these challenges, the company continues to view gaming as a “strategic differentiator” in its overall business portfolio.
The company has implemented a significant restructuring plan that resulted in the closure of three studios:
- Monolith Productions (known for “F.E.A.R.,” “Middle-earth: Shadow of…” series, and “No One Lives Forever”)
- Player First Games (developers of “MultiVersus”)
- WB San Diego
This cost-cutting measure aims to “refocus our resources and capital on proven IP and games from proven, world-class studios,” as stated in the shareholder letter.
Moving forward, Warner Bros. Discovery plans to concentrate its gaming efforts around four major franchises that have each previously generated over $1 billion in consumer sales:
- Harry Potter
- Game of Thrones
- Mortal Kombat
- DC (with special focus on “top tier characters like Batman“)
Future Outlook
Despite current difficulties, Warner Bros. Discovery remains optimistic about its gaming division’s future. The company references the breakthrough success of “Hogwarts Legacy” just two years ago, which became the best-selling game of the year—an achievement matched by only three other franchises in the past 15 years.
With its refocused strategy on proven franchises and studios, Warner Bros. Discovery expects its gaming division to return to profitability in 2025 and become “a more significant contributor to growth in the years ahead.”