According to a recent report by CNBC, AT&T is in talks to potentially sell off Warner Bros Interactive Entertainment for around $4 billion. The gaming division is responsible for titles including the LEGO games, Mortal Kombat, and the Batman Arkham series, and by all indications very successful and profitable. But, following the acquisition of Time Warner in 2018, AT&T has approximately $165 billion in debt, and selling Warner Bros Interactive would be a quick way to relieve some of it. But the news has major implications for one industry, and may indicate the future of another.
The sale of Warner Bros Interactive would have reverberations across the video game industry. But it also suggests that AT&T is interested in focusing on WB’s core business of making film and television and exiting other markets, which could also include comics. Read about games currently being developed by Warner Bros Interactive, how its sale could impact the video game industry, and what the news may mean for the future of DC Comics.
The state of Warner Bros Interactive
2020 is expected to be an exciting year for Warner Bros Interactive. Before the annual video game industry event E3 was canceled due to COVID-19, the publisher was scheduled to host a panel where they would reveal new projects. Jason Schreier reported that Warner Bros planned to announce three major titles:
- A new Batman game based on the Court of Owls comic book storyline from WB Games Montreal
- A big-budget, open-world Harry Potter game, possibly developed by from Avalanche Software
- The next project from Rockstar, the developer of the Batman Arkham series, possibly based on a DC property.
Warner Bros will still have to announce the titles in the not-too-distant future, possibly at the DC FanDome event in August. Negotiations for the sale of WB Interactive are unlikely to impact these games in any major way since they’re so far along in development, though their reveal may drive up interest in acquiring the publisher.
How the sale of Warner Bros Interactive affects the video game industry
According to the CNBC report, Take-Two Interactive, Electronic Arts, and Activision Blizzard are all in talks to purchase Warner Bros Interactive. Acquiring WB’s gaming division will make any of these already major forces in the video game industry even more profitable and powerful.
Every publisher has a different business strategy that it dictates for its studios. Electronic Arts, for example, might put pressure on developers like Rocksteady and Warner Bros Montreal to transition from single-player experiences to creating games-as-a-service. Seeing EA acquire WB Games is probably the worst-case scenario for most fans since Electronic Arts is extremely unpopular with consumers. A company that has made questionable use of the Star Wars license would gain access to Harry Potter, Game of Thrones, Lord of the Rings, and the entire DC Universe. Take-Two and Activision Blizzard would have their own expectations for developers as well. The publishers may choose to give its new studio a certain degree of independence, or expect them to immediately adopt their business policies, but it’s hard to know.
One of WB Games’ biggest assets, and weaknesses, is its slate of licenses. They’ve given its studios the opportunity to make great games with beloved franchises, but if AT&T sells the division they wouldn’t grant the new owner of Warner Bros Interactive the right to make games featuring its properties in perpetuity. There would probably be some kind of agreement to use the licenses for a limited time. At some point, though, Warner Bros will want to have the rights reverted back to them. Once you remove games based on Warner Bros IP, you’re pretty much just left with Mortal Kombat and Scribblenauts. However, by acquiring Warner Bros Interactive a company would be purchasing some of the best video game studios in the world.
The most exciting thing that could happen would be for Warner Bros Interactive to be sold to Xbox Game Studios. The console needs exclusives that match up to the quality of PlayStation series like Spider-Man, God of War, The Last of Us, and Horizon. Even when they lose the licenses, they’ll retain the top tier studios that came along with the deal. Xbox wasn’t listed as one of the bidders in the CNBC article, but it would be very interesting if that changed.
What the sale could mean for DC Comics
With the division’s sale, AT&T may simply see a way to shave $4 billion off its massive amount of debt. The news doesn’t necessarily predict the conglomerate’s future plans. Still, if AT&T is ready to leave one industry behind, who’s to say it won’t leave another? To go to the effort of signing deals with two new distributors, DC Comics doesn’t appear to be going anywhere for the time being. But if sales numbers don’t bounce back after the pandemic, AT&T might cut its losses, save the headache of running the #2 comic book publisher, and profit by giving IDW or Dark Horse the licenses to make comics starring DC characters.
From a financial standpoint, the decision could make sense. For a corporation as big as AT&T, comic book sales are a fraction of a fraction of its revenue. If they’re paying any attention, though, AT&T should see the value in running a comic book publisher as a means for creating new IP. After all, it just aired the first season of Batwoman, starring a character created just 14 years ago, and they can see Marvel making television based on properties as new as Ms. Marvel. There’s plenty of value in making comics — it’s just not all in the numbers. Hopefully, AT&T understands that, or there are people at DC Comics and Warner Bros who can explain it to its executives. The sale of Warner Bros Interactive is a potentially ominous sign, but all we can do right now is wait, see how things develop and hope for the best.