After Warner sold itself for 110 billion US dollars, the most embarrassing thing is the game department

At the end of last year, in the film and television industry, many people were waiting for Warner Bros.’s bid of the century to come to an end.

This bidding case, which kicked off in November last year, was once called a "disaster, catastrophe, and nightmare" by the Hollywood media. At that time, Warner Bros. Discovery Group began to list for survival due to debt pressure, and Netflix immediately offered an agreement with a total price of US.7 billion in an attempt to acquire it.

Just when the whole world thought that Warner Bros. was already in Netflix's possession, Paramount-Skydance Group launched an aggressive hostile bid.

Unexpectedly, it was postponed until the end of the year.

Last week, Netflix refused to follow up on Paramount’s per share acquisition offer and withdrew from the deal. In the end, Paramount acquired Warner at a dramatic price increase of per share.

At this moment, probably not only the defenders of the old Hollywood structure are breathing a sigh of relief.-- and Warner's gaming division.

This is because during the bidding process, Netflix CEO once stated quite bluntly at an investor meeting: Netflix did not add "any value" to Warner Games when it first planned the acquisition because they were "relatively minor" compared to the overall strategy.

This sentence has made many people sweat for Warner's game department. Now that it is in the hands of Paramount, Warner's game business still has to try its best to get rid of the fate of "giveaways".

1

In the game industry, Warner is far from the first echelon of developers. But in Hollywood, Warner is definitely the film and television company that attaches the most importance to the side business of games and is also the most successful.

"Hogwarts Legacy", which will be launched in 2023, is the pinnacle of this persistence. Avalanche Software, the studio behind Hogwarts, was actually an abandoned son of Disney. It was acquired by Warner in 2017 and was resurrected to continue development.

The reborn Avalanche did not disappoint Warner's favor. Although it had no previous experience in developing open-world RPGs, "Hogwarts Legacy" sold more than 15 million copies in the year it was launched, bringing in more than billion in sales. It became the "largest game project in history" and "the best-selling game in 2023" in Warner's financial report.

In addition, there was a public controversy surrounding J.K. Rowling at the time, and many people were not optimistic about the performance of "Hogwarts Legacy" before its release.

From Warner's perspective, the highlight moments of IP-derived games just highlighted the bleakness of the film and television side: that year, "The Flash", which was announced to be worth 0 million, failed at the box office, "Shazam 2" was ignored in theaters for two weeks, and the vigorous strike wave in Hollywood was the last straw. Only "Barbie", which was not optimistic at first, was able to win the Oscar and compete with "Oppenheimer".

In contrast, the ultra-low-cost "The Flash" TV series has a better reputation, causing DC fans to spread strange rumors about the rules:Once Warner executives are optimistic about it, they will rush to the center of the earth.

The serial collapse of mainstay DC has made the film and television sector increasingly uncontrollable for Warner, while games adapted from film and television IP have supported astonishing profits. Perhaps this is why Warner's then CEO David Zaslav proposed "hanging out economics in the Superman world and universe" at the financial report meeting.

Out of excitement, his original words were a bit far-fetched, but they probably meant,Movies are only one-way narratives, and interactive media such as IP-derived games "will be very profitable in the next few years." Warner wants to keep it in its own hands as an important part of the IP territory, rather than sharing a piece of the pie with others.

This statement is somewhat of a yin and yang to other players sitting at the Hollywood table: giants such as Disney and Universal shut down their self-developed games many years ago and switched to a licensing model. However, at that time, many people focused on the word "Superman".

Perhaps just casually, Zaslav said in reference to the game that a Superman movie might be coming in the next few years. Later, news came out: Warner Games wanted to launch a new project while the iron was hot, and the burden fell on the veteran studio Rocksteady Studios. So people naturally guessed: It must be a "Superman" game, right?

You know, Rocksteady created the "Batman Arkham Trilogy" ten years ago, an insurmountable mountain for superhero games. To this day, some people call it the greatest superhero game adaptation.

As a former DC Comics fan, "Batman: Arkham Knight" was the first game I purchased on Steam.

Kevin Conroy, the legendary Batman voice actor invited to the new project, unfortunately passed away after completing his dubbing work, and fans' emotions were pushed to the highest point. Next, Rocksteady may not have to create a new peak. It only needs to deliver a work that is full of emotions and satisfactory. Basically, it will be considered a victory.

Who would have thought that after many twists and turns, Rocksteady Studios would launch an online service-based game "Suicide Squad: Destroy the Justice League" in 2024.

It’s hard to say whether it’s a high mountain or not. But it is no exaggeration to say that this is an insurmountable mountain of shit in a superhero game.

First of all, European and American players don't have much favorable impressions of service-oriented games. With the "Arkham Trilogy" in front of them, people are looking forward to an immersive single experience and a magnificent superhero story.

Rocksteady seems to have little experience and clues about how to operate, and when it comes to plot, "Suicide Squad" broke the hearts of fans and players.

Perhaps in order to praise the Suicide Squad, the game made all the members of the Justice League black when the game started, making them enemies that must be killed. Not only were their combat power greatly reduced, but their deaths were tragic. Among them, the popular hero The Flash did not even have a posthumous animated tribute.

Although the production team tried to patch up the plot by using the idea that the dead heroes were all evil clones, this also brought about an emotionally unacceptable bug: Wonder Woman is really dead.

In terms of shaping the anti-hero character, "Suicide Squad" went a bit too hard: faced with Captain Boomerang who wanted to pour urine on the Flash's corpse (to no avail), it's hard to imagine that any player would be willing to spend money to buy him a beautiful skin.

The collapse of the plot has caused all the shortcomings in the game experience to become secondary points. Amid countless scoldings, Warner previously expected to earn at least US billion through the "Suicide Squad" game, but in the end it suffered a heavy loss of US0 million. "Suicide Squad", which was originally planned to last ten seasons, also ended up hastily with a PPT-style plot animation.

Judging from the length of the game and the numerous comments on the character creation, we can feel the deep love of fans and players for the IP and their deep responsibility to Warner.

This failure exposed a cruel reality: based on IP advantages, the attack of film games is indeed a huge bonus, but the development of games and movies are also unstable.

For example, "Suicide Squad" was originally intended to pick up the momentum of the 2021 movie of the same name, but it was delayed until 2024 - not to mention DC, the entire superhero movie is almost becoming a thing of the past.

Judging from the official website of Warner Games, the intention of linking the video games is very obvious, but it is a pity that the video games are both confused.

Looking back at the words of the year "Hogwarts Legacy" was launched, it is inevitable that people feel that Warner CEO said it too confidently: there is always a reason why others don't work on it.

It is true that eggs cannot be put into one basket, and adding a few duck eggs into it is definitely not a good idea.

2

After the debacle of Suicide Squad: Destroy the Justice League, CEO David Zaslav said that its gaming division is "far from its potential."

Therefore, Warner Games is still gritting its teeth and rushing into self-research. Of course, there is nothing wrong with this general direction, but Warner obviously did not learn any lessons from the previous round of failures - because next, they launched the fighting game "Warner Smash Bros." and the "Harry Potter" spin-off game "Quidditch Champions" that brought together many IPs - both games are service-oriented games.

With anemic content, awkward positioning, and disgraceful operations, the two games hit the street in a similar manner to "Suicide Squad."

"Warner Super Smash Bros." ushered in a "difficult decision" in May last year and stopped operations. Only one year has passed since it was officially launched.

As the timeline reaches 2025, Warner Bros. has gone through another round of layoffs and reorganization, closing three studios and canceling the "Wonder Woman" game project under development. Then it announced that it would focus on four core IPs: "Harry Potter", "Mortal Kombat", "Game of Thrones" and the DC Universe.

When it was put up for sale at the end of last year, the stand left by Warner Games still seemed to have a good foundation.

The first is the sequel to "Hogwarts Legacy" developed by Avalanche, which is said to include multiplayer online features. Rocksteady Studios, which has experienced two rounds of layoffs earlier, also retains many old team members who participated in the Arkham trilogy, and there is also news of the development of new projects.

The producer responsible for the collapse of the plot of "Suicide Squad" had already established a separate company at that time. Looking back at the game's scene design and plot animation, there are actually many remarkable things, which can be regarded as promising in the future.

It can be said that although the energy has been severely damaged by the torment, Warner still has many experienced game veterans, and it still firmly grasps the strength of its own IP.

But for Netflix, the first buyer, self-developed games are tasteless and a pity to discard.

Some people in the industry have speculated that Netflix's "zero value" for Warner games may be a price-cutting strategy, or even a strategic way to wait for Paramount to come out halfway and collect a compensation fee.

In this regard, Netflix said after withdrawing from the bidding: "There is an easier way to earn US.8 billion," and there is no need to go to all the trouble to make a show. Combined with the raging streaming media war, Netflix is ​​indeed sincere in acquiring Warner and looks down on games.

The reason why Netflix's acquisition has created a great sense of crisis in the entire film and television industry is because Warner's IP can perfectly complement Netflix's shortcomings.

In order to create an "evergreen" IP, Netflix spends a lot of money on trial and error every year. Even if it succeeds in one or two hits, it cannot guarantee its long-term operating potential. For example, the popular "Squid Game" in the past did not have many peripheral spin-offs, and the second season quickly became blurred.

Last year’s hit Netflix movie “K-pop The Witcher” has quickly spread its co-branding. You can already see co-branded Korean snacks in imported supermarkets in third-tier towns on the eastern coast of China.

Although Warner's IP has made fans love and hate it, it is better than quickly becoming a piece of cake on the roadside.

And with such an IP fortune coupled with Netflix’s unshakable status as the big brother in streaming media, it’s no wonder that the film and television circles jumped on the theater chain as soon as they heard about Netflix’s move.

Warner Centennial Arms Display – And That’s Just the Animation Part

As for the game itself, although it is related to IP, in this acquisition, not only the game department was tossed by Warner to the same extreme instability as the film and television. Although Netflix itself has a game business, it actually understands that it cannot handle large-scale games and has no intention of continuing to struggle here.

After spending a lot of money but ended in failure, by 2024, Netflix has closed five of its 3A self-research studios. Later, Netflix gave up its bid for EA, completely slowed down its pace in the game track, shifted its focus entirely to casual games, and relied on the licensing of games such as GTA to support its business.

At the time of the acquisition, Netflix abandoned its undisclosed distribution agreement with external studios, shut down the developer of its "Squid Game" derivative mobile game in one fell swoop, and sold the relevant internal teams. Such cost reductions in the game department are all preparations for acquiring Warner's IP resources.

To sum up, for Warner Bros., Netflix only wants core assets related to streaming media. Although the game is related to film and television IP, it was also packaged into Warner Bros. Discovery purchased by Netflix. However, many industry insiders analyzed that Warner Games are just "invalid gifts" to Netflix and will be split up once the merger and acquisition is successful.

But no matter what happens in business. Now, Warner Bros. has been completely blocked by Paramount.

3

In terms of "coming out halfway", in fact, Netflix's acquisition was what surprised Cheng Yaojin at first.

As soon as the news that Warner Bros. was going to be put up for sale came out, Paramount was the most promising potential buyer. Although it is still habitually referred to as Paramount, the main body we are talking about here is actually "Paramount Skydance" (Paramount Skydance), which was born after the merger and acquisition of Xiaoboda by the film and television company Skydance in August last year. The newly appointed CEO is none other than David Ellison from Skydance.

This person has a good background: he is the son of Oracle founder Larry Ellison, and he is a close friend of Trump. He also has a good relationship with Trump’s son-in-law. This relationship will directly benefit the antitrust review after the merger.

You know, as soon as Paramount came out with its hostile bid, Trump shouted loudly and loudly: "CNN, owned by Warner, must be sold."

After being taken over by Ellison, Paramount announced that it would not renew its contract with "The Late Show with Stephen Colbert" (also known to Chinese audiences as "The Button Bear Talk Show"). Public opinion generally believed that this was because the show had continued to ridicule Trump.

While his political connections and assets are very strong, David Ellison's style is also very strong. The most talked-about story in the film and television circles is that Paramount pried away the Dafoe brothers who created this IP when the final season of "Stranger Things" was released.

The bid for Warner Bros. is even more indicative of the new Paramount style. Less than a week after Netflix reached an agreement with Warner Bros., Paramount made a hostile bid. The CEO once did not hesitate to move out his old father to provide a private guarantee of US billion, but was rejected twice by Warner due to "opaque financing."

In the end, Paramount simply bypassed Warner's board of directors, quoted a sky-high price of US1 billion, used cash transactions to directly make a public offer to Warner shareholders, and was even willing to pay for the US.8 billion "breakup fee" Warner paid to Netflix.

Compared with Netflix's cautious approach of cutting away the core cake, Paramount proposed to take over all the assets of Warner Bros. in a big way.

On one side were technology giants who were accused of killing theater chains, and on the other were Trump’s cronies. The mergers and acquisitions that were underway at the time were considered the lesser of two powers in the eyes of many film and television practitioners.

However, people in the game industry almost unanimously believe that this is a better result for Warner Games.Judging from public information, compared to Netflix's indifference, Paramount is very optimistic about the game.

In the process of merging with Skydance, Paramount viewed gaming as a potential area of ​​development and growth for the company. Not long after the new CEO came online, he has already released a series of VR games. Skydance has also laid a long-standing foundation in game licensing, ranging from a famous American satirical animation to "Star Trek" and so on.

It is worth mentioning that Paramount also bought the film and television adaptation rights to "Call of Duty" in September last year, and the live-action movie is expected to start filming this year

However, doing IP is not charity. Paramount’s subsequent statement made people sweat for Warner Games: in the first investor conference call after the acquisition, although Paramount talked about the IP concept, it did not mention the game departments of the two companies at all.

On the other side, Netflix, which was defeated, did not let them go. Sarandon said, "I'm glad that our previous transactions were subject to strict scrutiny," so it's somewhat strange that Paramount's deal should also be subject to strict antitrust scrutiny. The reality is the same. Although Paramount succeeded and the White House also showed obvious support, it still has to go through antitrust review by California courts and Europe.

More importantly, Netflix may know better than anyone what kind of bad debt Warner Bros. has on its hands after having been busy for so long before and after the merger. In the interview, Sarandon also revealed that Warner Bros. still needs to undergo 16 billion in cost reductions, and the largest cost is production personnel-game development is naturally included.

After another calculation, after the merger of Paramount and Warner, the new company's net debt will reach billion. This week, credit rating agency Fitch Ratings quickly downgraded Paramount Skydance and Paramount Universal to junk status.

No wonder Netflix CEO said with a hint of schadenfreude that Paramount will have to ventilate with its creditors sooner or later and tell them what kind of bloody layoffs will happen in the next 18 months.

In short, it is still unknown whether Warner Games will stay and how much it can stay. On the bright side, licensing those IPs that fans love to more mature development studios may not necessarily be a bad thing. However, for studios such as Rocksteady, it is a pity that they have disappeared into silence amid the reshuffle of the film and television industry.

Looking back at the entire merger and acquisition of Warner Bros., if we focus on the game sector of the film and television industry, then perhaps what is more worthy of attention than the narrative of the reorganization and shuffling of the film and television empire is the epochal changes in media forms.

There is indeed a trend in Hollywood to open up IP links. In the game sector, many players have also felt this: in recent years, there has indeed been more and more news about game adaptations into movies.

As for the game itself, the film and television giants during the same period were also trying a more stable paradigm. For example, Disney's new CEO in 2026 has clearly listed "games, AI and interaction" as its core strategy, but the path he has taken is to significantly increase investment in companies such as Epic since 2024. He is obviously betting on "Fortnite" and is deeply bound by investment.

In any case, the winners who are likely to be the first to taste the sweetness right now are the traders and employees holding shares: Paramount's strength has brought about a once-in-a-lifetime opportunity to cash out.

At this point, there really is nothing more certain than cash in your hand.