Netflix is acquiring Warner Bros Discovery, the parent company of HBO and Warner Bros. Games, in a cash and stock transaction worth $82.7 billion. It’s a notable move for the entertainment industry that will make Netflix the owner of major film and television franchises such as Harry Potter, Game of Thrones, White Lotus, The Sopranos, and the wider DC Universe.
Notably, a Warner Bros. Discovery spokesperson has confirmed that Warner Bros. Games is included in the transaction.
When discussing the move, Netflix—which has been attempting (and generally struggling) to make inroads into the video game industry—largely focused on the benefits of purchasing Warner Bros.’ vast suite of intellectual properties and television and movie studios, including HBO and HBO Max.
“This acquisition will improve our offering and accelerate our business for decades to come,” said Netflix co-CEO, Greg Peters, in a press release. “Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities. With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
Netflix claims the combination will ultimately offer more choice, more opportunities, and more value to consumers. The streamer said it expects to maintain Warner Bros.’ current operations while building on the company’s strengths, including theatrical movie releases. At the same time, it outlined plans to realize at least $2 billion to $3 billion of cost savings per year over the course of three years.
“By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose. This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content,” reads an announcement. “A stronger entertainment industry: This acquisition will enhance Netflix’s studio capabilities, allowing the Company to significantly expand U.S. production capacity and continue to grow investment in original content over the long term which will create jobs and strengthen the entertainment industry.”
Warner Bros. Games included in $82.7 billion deal
For those operating within the game industry, however, there is an elephant in the room. Warner Bros. Games (and indeed, any mention of the word ‘games’ outside of name-drops for Squid Game and Game of Thrones) was largely absent from the announcements and SEC filings issued by both companies.
Warner Bros. Games was briefly referenced during a conference call held this morning, when the Mortal Kombat logo was shown on a ‘Business Overview’ slide to highlight Warner Bros.’ wider game and consumer product exploits—but that blink-and-you’ll-miss-it-moment was largely it.
Then, in a brief call with Game Developer, a Warner Bros. Discovery spokesperson confirmed the recently-restructured video game division, which includes studios such as Mortal Kombat creator NetherRealm, Batman: Arkham developer Rocksteady, and LEGO custodian TT Games, will be joining Netflix.
To what end remains to be seen.
The rest of the chatter between Netflix co-CEOs Greg Peters and Ted Sarandos was acutely focused on the movie and television business and the reach of Warner Bros’ franchise slate.
“Warner’s IP and library accelerates our ability to execute on the goal that we’ve always had, to deliver more and even better content for our consumers and to entertain the world by offering audiences more of what they love,” said Peters during the call.
“We expect to attract and retain more subscribers, drive more engagement and generate incremental revenue and operating income. We think this acquisition will make Netflix even better and accelerate our business for decades to come.”
The transaction is expected to close in 12 to 18 months and remains subject to regulatory approval.
