Warner Bros. Discovery breaks up, WB Games handed to new subsidiary

The Warner Bros. Discovery post-merger combination is breaking up and WB Games has been shifted to a new company.

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Today, WB Discovery announced it would be splitting into two companies. The two groups see a clear division in WB Discovery's business.

The first company will include WBD's Streaming & Studios branch, which consists of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, and the WB Games division. This group will be led by current WBD CEO David Zaslav.

There's been no discussion on how this breakaway will affect WB Games, but the division recently shrank with the closure of multi-decade game developer Monolith Productions.

Financial pressures from expensive flops have stressed the games group. Despite the megaton multi-billion dollar success of WB Games like Hogwarts Legacy, the division also produced critical failures like Batman Gotham Knights and the Suicide Squad live game. The failures led to a significant $384 million operating loss for WB Games.

This led WBD CEO David Zaslav to dramatically cut the amount of games that WB Games was working on, opting for a "fewer but bigger" strategy.

WB Games now focuses only on four key franchises: Mortal Kombat, Harry Potter, DC (primarily Batman), and Game of Thrones.

Earlier this year, WB Interactive Entertainment president David Hadded left after 12 years with the company.

In February, CEO Zaslav told investors that the goal for gaming is to achieve $3 billion in annual revenue:

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.

At the time of writing, Warner Bros. Games consists of:

• NetherRealm Studios (Mortal Kombat)
• WB Montreal (Gotham Knights)
• Rocksteady Studios (Batman Arkham, Suicide Squad)
• Avalanche Software (Hogwarts Legacy)
• Portkey Games (Hogwarts Legacy)
• TT Games ( Lego titles)