WB Games just shut down one of its most acclaimed gaming studios

Warner Bros Games is shutting down Monolith Productions, the developers behind the popular Middle-earth series of games, and the new Wonder Woman game has been cancelled.

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WB Games is making big changes to its games portfolio and talent roster. Sources have told Bloomberg'sJason Schreier that Warner Bros.' games division will close Monolith Productions, the high-profile studio responsible for big hits like the Middle-earth action-adventure duo, which introduced the iconic Nemesis system. The studio also made the popular FEAR first-person shooter series that blended action with horror. Monolith had originally been established in the 90s before being acquired by WB in 2004. The studio's website now redirects to the WB Games website.

Warner Bros. is also axing Monolith's turbulent Wonder Woman game, which had been in development for years and had reportedly been rebooted. Earlier reports paint a dismal picture for WB Games with big holes in the slate. Management had originally expected to achieve $3 billion from gaming, but this target remains in question as former WB Games president David Haddad prepares to leave the company.

Also included in the cuts are Player First Games, the devs behind Multiversus, and WB San Diego.

WB Discovery faced a $335 million impairment charge due to the significant underperformance of games like Suicide Squad Kill the Justice League and the failed live service brawler Multiversus.

In the past, WB Discovery CEO David Zaslav has floated ideas like licensing key intellectual property out to third-party studios and publishers for game projects. The strategy could save money on games development, and for its part, WB Games will now be narrowly focusing on more guaranteed hits--your Hogwarts Legacies and Mortal Kombats, for instance.

Here's what Zaslav said about gaming in last quarter's conference call:

I think we're through some of the worst and it hasn't been pretty on the gaming business.

But we have four games that are really powerful and have a real constituency that love them and we're going to focus on those four primarily. And we're going to go away from trying to launch 10, 12, 15, 20 different games.

And I think we have a real chance now with focus to have the gaming business be a steadier.

So, I'm very encouraged, you know our ambition to get back to at least $3 billion and then start growing. And there's a lot of building blocks with wind at our back in order to get there.