WB Games wants to take fewer risks with AAA games, instead betting big on live services, mobile and F2P titles

Mortal Kombat : Onslaught

J.B. Perrette, CEO and president of Global Streaming and Games and Warner Bros. Discovery, opened up about the company’s new strategy during a recent Morgan Stanley event (thanks GameSpot). Below are the key takeaways:

• Perrette noted that the segment of AAA console games is a “great business” when you have hits like Hogwarts Legacy, which sold over 22 million copies last year and became the best-selling title of 2023 globally;
• At the same time, the company also faced setbacks, with Perrette calling the recently launched Suicide Squad: Kill the Justice League a disappointment;
• It is worth noting that Warner Bros. Discovery CFO Gunnar Wiedenfels recently told investors that the game “has fallen short of our expectations since its release earlier in the quarter”;
• Perrette believes that “it just makes [games business] very volatile,” so WB Games needs to adjust its strategy and stop focusing on premium AAA titles as its core area;
• The company plans to reduce volatility by expanding its four key IPs — Mortal Kombat, Game of Thrones, Harry Potter, and DC — into the mobile and free-to-play space;

We're doubling down on games as an area where we think there is a lot more growth opportunity that we can tap into with the IP that we have and some of the capabilities we have on the studio side where we're uniquely positioned as both a publisher and a developer of games

J.B. Perrette

CEO and president of Global Streaming and Games and Warner Bros. Discovery

• WB Games will continue to make premium titles, but it will also focus more on the GaaS monetization model, with Perrette saying that “rather than just launching a one-and-done console game, how do we develop a game around, for example, a Hogwarts Legacy or Harry Potter, that is a live service where people can live and work and build and play in that world in an ongoing basis?”;
• This strategy should help the company generate more consistent revenue, with some new mobile free-to-play games expected to come out later this year;
• Perrette noted that Warner Bros. Discovery has a “strategic investment plan” to help make future games more successful, also hoping that video games would bring “meaningful growth” to the company in the future.

Seeing a big corporation chasing trends and doubling down on its live service ambitions is nothing new. However, the industry has seen plenty of failed attempts at launching and successfully supporting new GaaS titles.

As former BioWare executive producer Mark Darrah once pointed out, “The mistake is you can only really play one Destiny at a time. You can only do one engrossing live service at a time. So what happens in cases where one game is going to dominate your attention, you end up having a very tall steep head and a very thin tail because people play where the people are. So these live services tend to be dominated by one winner, two or three runners-up, and then a lot of live services that aren’t really surviving.”

The situation is unlikely to change in the near future, and chances of WB Games becoming one of those rare winners are extremely slim. Not to mention that failed live service attempts like Suicide Squad could potentially put many talented devs at risk of layoffs.