Netflix Co-CEO Greg Peters has acknowledged something that, at first glance, feels almost contradictory in today’s entertainment landscape. Despite the growing cultural weight of gaming, the company chose not to count Warner Bros.’ video game division as a financial asset in its recent $82.7 billion acquisition offer. Peters, speaking during an investor call, noted that while WB Games has produced undeniably strong work, the division is still “relatively minor compared to the grand scheme of things.” It’s a statement that lands heavily for Warner Bros. Discovery, especially as its gaming arm has been under increased scrutiny. This comes even though it controls major franchises like Batman and Harry Potter, which many people might assume would bolster its valuation.
Key Takeaways
- Zero Value Assigned: Netflix did not add any monetary value for WB Games when calculating its $82.7 billion bid.
- “Relatively Minor” Status: Co-CEO Greg Peters described the gaming division as too small to impact the overall deal model.
- Mixed Track Record: While Hogwarts Legacy was a massive hit, costly failures like Suicide Squad: Kill the Justice League have hurt the division’s standing.
- Future Uncertainty: The statement raises questions about how Netflix would manage studios like Rocksteady and NetherRealm if the deal closes.
- Focus on Film & TV: The acquisition primarily targets HBO, film libraries, and TV assets to boost Netflix’s streaming dominance.
There was an immediate reaction from across the gaming industry after Peters made his “relatively minor” remark. When pressed about whether the acquisition might bolster Netflix’s own long-term gaming ambitions, Peters didn’t dance around the issue. He explained that Netflix’s internal model for the deal was built almost entirely around Warner Bros.’ film and television assets. The gaming studios, he said, were more of a bonus than any sort of meaningful driver of value.
For many fans, this felt surprising, maybe even a little dismissive. After all, Warner Bros. Games controls some of the most respected developers in the world. Rocksteady Studios earned widespread acclaim for the Batman: Arkham series. NetherRealm Studios continues to set the standard for fighting games through Mortal Kombat. TT Games remains a leader in producing successful LEGO titles. Yet from Netflix’s financial perspective, these contributions simply don’t compare to the enormous and consistent revenue associated with HBO and Warner Bros.’ broader film catalog. It’s one of those moments where the emotional weight of a brand doesn’t quite align with the math behind a megadeal.
Several factors help explain why Netflix ultimately saw so little value in the gaming division. The most obvious is inconsistency. Hogwarts Legacy was a huge success, selling over 30 million copies and generating more than $1 billion. But that success was undercut by the costly disappointment of Suicide Squad: Kill the Justice League. The live-service title failed to catch on and resulted in a $200 million revenue loss, a setback that still hangs over the division’s future prospects.
Netflix, for its part, tends to favor stability. The company leans heavily on predictable growth and subscriber retention, and blockbuster game development is anything but predictable. By assigning zero financial value to WB Games, Netflix essentially shields itself. If the studios struggle, the deal still makes sense based on film and TV. If they happen to thrive, Netflix gains upside without ever having paid for it. It’s a cautious approach, perhaps, but one that aligns with Netflix’s broader risk management strategy.
If the acquisition does ultimately close, studios like Rocksteady, Monolith Productions, and NetherRealm may find themselves entering a period of real uncertainty. Netflix already has a gaming strategy in motion, one built around mobile-first experiences and smaller titles tied to its shows. Incorporating large AAA studios is a very different undertaking. Peters did mention that Netflix is “super excited” about the potential within WB’s intellectual property and pointed to Hogwarts Legacy as an example of impressive work. But that excitement seems to center more on the characters and worlds than the existing business framework.
This raises possibilities that feel both intriguing and slightly uneasy. Netflix could license the IP to external developers, restructure the studios, or even shift their focus entirely to align with its subscription-driven model. The language around the division being “minor” suggests the company will likely not hesitate to make significant changes if that’s what its long-term strategy demands.
All of this sits against the backdrop of one of the largest entertainment acquisitions in history. The $82.7 billion price tag reflects the tremendous value of HBO, Warner Bros.’ film library, and powerhouse franchises like Game of Thrones. With Paramount also making a hostile bid for Warner Bros. Discovery, the outcome remains uncertain. Still, Netflix’s stance offers a revealing glimpse into how tech-driven companies now view legacy media. Content libraries remain the crown jewels, while traditional game publishing is increasingly seen as unpredictable, perhaps even secondary.
It’s a fascinating shift, and one that, I think, will continue to spark debate about how gaming fits into the broader entertainment ecosystem.
Frequently Asked Questions
Q. Did Netflix buy Warner Bros. Games?
A. Netflix has an agreement to acquire Warner Bros. Discovery, which includes the games division. However, the deal still needs regulatory approval and faces a competing bid from Paramount.
Q. Why did Netflix call WB Games “relatively minor”?
A. The revenue from the gaming division is small compared to the billions generated by movies, TV shows, and HBO subscriptions. Recent flops also reduced the division’s perceived reliability.
Q. Will Netflix shut down Rocksteady or NetherRealm?
A. No plans are confirmed. However, the “zero value” comment suggests Netflix is not attached to the current structure. They could keep the studios, sell them, or change their focus to support Netflix IP.
Q. Does this affect Hogwarts Legacy 2?
A. Development on a sequel is likely safe due to the first game’s massive success. Netflix executives specifically praised Hogwarts Legacy as an example of the value WB’s IP holds.
Q. What happens if the deal does not go through?
A. If regulators block the deal or Paramount wins the bid, Warner Bros. Discovery will remain independent or join Paramount. The gaming division would then continue under its current management or new owners.
