Warner Bros. Considering Licensing IPs to Outside Gaming Studios

Video Games

Warner Bros. is considering changing up its approach to video games following another bad earnings call. The company is still feeling the effects of the disastrous Suicide Squad: Kill the Justice League, the follow-up to Rocksteady’s Arkham games that, according to the previous earnings call in May of this year, was singled out as having cost Warner Bros. $200 million, more than even their worst-case scenario, according to Forbes. The failure is so catastrophic that there’s speculation that Rocksteady will close down, which, after the four Arkham games that preceded Suicide Squad (well, three of them; Arkham Origins was made by WB Games Montréal), is a shock. The loss is so bad for Warner Bros. that it offset their big win with the Harry Potter game Hogwarts Legacy last year, and now, the studio is considering drastic measures.

In the recent quarterly earnings call (via IGN), Warner Bros. Discovery CEO David Zaslav suggested they could begin licensing their IPs to outside studios to make games rather than handle everything in-house. That’s actually what Warner Bros. used to do; the problem is that when a game was successful, they bought the studio that made it so they could reap all the benefits from the inevitable sequels, as Game Developer points out. Rocksteady is the most glaring example; Warner Bros. licensed Batman to them so they could make Arkham Asylum, and when that game was a smash hit, Warner Bros. quickly bought Rocksteady. This was great for them for a while, with the sequels being best-sellers, but now, they’ve got to eat the cost of Suicide Squad: Kill the Justice League, and apparently, it’s a buffet. Similarly, Warner Bros. licensed a bunch of their properties to Player First Games for MultiVersus, a free-to-play fighting game featuring various Warner Bros. characters from properties as diverse as DC Comics, Looney Tunes, Game of Thrones, and more. (I had lots of fun with the titular duo from Rick and Morty.) But after its first season proved successful, Warner Bros. bought Player First, and the game was taken offline for a year, something players were told wouldn’t happen.

Licensing their IPs to outside video game studios makes sense; Warner Bros. could make a percentage of the profits from the games while being off the hook for development costs. Sure, they’d lose out on retaining all the profits from something as successful as Hogwarts Legacy, but they wouldn’t have to bear the burden of another Suicide Squad: Kill the Justice League, either. And even beyond their video game division, Warner Bros. isn’t in a position to bear that kind of loss, with the studio bleeding money even before Zaslav took over. If they play this right, their video game division could become a fairly reliable source of revenue for them, even if they’re making a more modest profit from the game licenses. At this point, I’m sure they’d welcome any good news.

This could also be a win for gamers who want to see Warner Bros.’s properties used to their fullest potential. Why not license the IPs to a bunch of different studios and see what works? That’s how we got Arkham Asylum, and it was an amazing game that influenced even Marvel titles like Spider-Man. Maybe someone could make a great game out of Game of Thrones unburdened by Warner Bros.’s limited focus based on their monetary woes. Or we could get a Superman game that makes us forget all about the infamous Nintendo 64 nightmare. And I’d love to see the next gonzo idea like MultiVersus, which, although I haven’t played it in quite a while (which sounds like I saved myself some disappointment), was a ton of fun when I was into it. We may be in for a lot of great games – or, more likely, just a few, but coal is where you find the diamonds – if Warner Bros. licenses its gaming IPs.