Warner Bros. Discovery has released its financial report for the fourth quarter and full year ended December 31, 2024. The company’s video game division showed poor results, leading to hundreds of millions of dollars in write-downs and a cost-cutting restructuring plan.
Financial highlights
- According to its full-year earnings results, Warner Bros. Discovery reached $19.7 billion in revenue in FY24, down 3% year-over-year. Net loss amounted to $11.3 billion, compared to a net loss of $3.1 billion in 2023.
- The Studios segment, which includes video games, reached $11.6 billion in revenue in 2024, down 5% year-over-year. However,
- The company didn’t disclose the earnings of its video game division, but noted that gaming revenue fell 29% year-over-year in the fourth quarter. The main reason is weak results of current year releases compared to strong performance from Hogwarts Legacy and Mortal Kombat 1 in Q4 2023.
- Operating expenses on game content decreased by 20% year-over-year. In Q4, Warner Bros. Discovery also wrote down $50 million on video games, bringing its total 2024 impairments to $384 million.
- This includes the previously reported $200 million loss on Suicide Squad: Kill the Justice League and more than $100 million impairments for MultiVersus.
Restructuring and studio closures
- In a letter to shareholders, Warner Bros. said 2024 was a “disappointing year” for its video game business. However, the company still sees it as its “strategic differentiator.”
- Warner Bros also commented on its restructuring plan, which led to the closure of three studios — Monolith Productions (F.E.A.R., Middle-earth: Shadow of…, No One Lives Forever), Player First Games (MultiVersus), and WB San Diego. The company plans to “refocus our resources and capital on proven IP and games from proven, world class studios.”
- Its gaming business will be focused on four tentpole franchises with over $1 billion in revenue each: Harry Potter, Game of Thrones, Mortal Kombat, and DC (“top tier characters like Batman”).
- Through this cost-cutting strategy and refocusing on core IPs, Warner Bros. believes that it “can get back to producing high-quality games built for long term consumer engagement, which we expect to propel our Games division back to profit in 2025 and emerge as a more significant contributor to growth in the years ahead.”