Warner Bros Games Not Looking Great Under Netflix
Netflix was present at the UBS (Union Bank of Switzerland) Global Media and Communications Conference 2025, holding a conversation with investors about the Warner Bros acquisition - and during said call, there were some troubling conversations about video games...
Netflix was present at the UBS (Union Bank of Switzerland) Global Media and Communications Conference 2025, holding a conversation with investors about the Warner Bros acquisition - and during said call, there were some troubling conversations about video games...
Recall - Warner Bros. Games currently have these studios under their umbrella:
- NetherRealm Studios
- RockSteady Studios
- Monolith Productions
- TT Games
All responsible for creating cherished (and not so cherished) games such as:
- Batman: Arkham Series
- Lego Game Collections
- Lego Star Wars
- Lego Harry Potter
- Mortal Kombat
- Hogwarts Legacy
- Middle-Earth Series
- Harry Potter Series
- Lord of the Rings Series
- Injustice Series
- Suicide Squad: Kill the Justice League
With more games that were slated, such as a Hogwarts Legacy Sequel, a new Game of Thrones games - "War for Westeros", and an unannounced Lego game. With all of this, you'd think this is prime value worth consideration! Well... Theo two CEOs of Netflix weren't that impressed...
The Investor Call
Ring Ring Went the Phone...
During the call, a member of the USB's Research Division, John Hodulik, asked:
Maybe quickly on video games. Are the video game efforts scaling as you expected? And are they contributing to engagement and maybe subscriber growth through churn? Or just lay that out for me.
- J.H.
And the Co-CEO (Didn't know that was a position), Gregory Peters, went on a spiel about setting up and understanding infrastructure that ultimately lead to him talking about games on the TV using your phones...
Yes. We've been doing a lot of work over the last couple of years. A lot of it has been, I'd say, in 2 categories, building plumbing, if you will, building the infrastructure to create development environments for people to author games and bring those games to the service. And a lot of work has basically been also understanding the strategy and sort of seeing, as we always say, you never know what you've got until you get out there with consumers and you figure it out.
- G.P.
And we released a bunch of games on the TV that is designed for folks to sit around the TV with their phone as controller and play, think Boggle, Pictionary, LEGO.
- G.P.
Thankfully, Hodulik wasn't going to let Peters (who was also joined by Theodore Sarandos - hyping up their TV games) slide with just that and seemed to want to hit on deeper conversations related to the gaming industry - as it's one of the most massive entertainment industries today. I have to also give it to him as the transition was very smooth:
And does the Warner Bros. assets enhance or accelerate the success in the gaming side?
- J.H.
Now here's the interesting response from Peters that has me a touch worried. Primarily because while he doesn't write-off these game studios, he shows no interest what-so-ever in their value:
Yes. And maybe worth going back again to sort of how we thought about the deal and building our valuation model. While they definitely have been doing some great work in the game space, we actually didn't attribute any value to that from the get-go because they're relatively minor compared to the grand scheme of things. Now we're super excited because some of those properties that they've built, Hogwarts is a great example of that, have done quite well, and we think that we can incorporate that into what we're offering. They've got great studios and great folks working there. So we think that there's definitely an opportunity there. But just to be clear, we haven't built that into our deal model.
- G.P.
So yea, they gave their nod, but it was more so around the Harry Potter IP. And talks about incorporating said works into their offerings... well... that just sounds like they could be planning to do more family interactive projects on the TV - not specifically pushing for more games.
The only saving grace is that there's no outright talks about cutting the studios for being a drain, or too expensive, or that it goes against their model and plans. It's very ambiguous, and that causes minor concerns due to thinking of it through the concept of "business talk". Since they did not outright confirm anything positive, the wording could be set to simply dismiss as to not alarm any plans that could be seem as negative to their value, I.E.: Losing out on investors who'd be interested in elevating value via the gaming market.
Time will tell though, let's see where this goes.
Netflix Investors (You can find downloads of the Transcript through here)
Seeking Alpha (audio recording of the Investors Call can be found here)
Uploaded by: "Investing 101"
