Warner Bros. Faces $300 Million Loss Amid MultiVersus Struggles and Strategic Shift to Core Franchises

Warner Bros. Discovery has acknowledged that MultiVersus, its free-to-play Smash Bros.-style brawler, has fallen short of expectations, resulting in an additional $100 million writedown for its gaming division in 2024.

In July, Warner Bros. Games acquired Player First Games, the developer of MultiVersus, just two months after the game’s relaunch on PS4, PS5, PC, Xbox One, and Xbox Series X|S. Player First Games co-founder Tony Huynh expressed optimism at the time, noting that joining Warner Bros. Games would strengthen MultiVersus by integrating the development team with the publisher’s resources.

Yet, in a recent earnings call, Warner Bros. Discovery executives, including CEO David Zaslav and CFO Gunnar Wiedenfels, revealed that MultiVersus' underperformance has further impacted the company’s financials, adding to a $200 million writedown earlier in the year and bringing the total impairment for the gaming segment to over $300 million.

The company’s only new title for the third quarter of 2024, Harry Potter: Quidditch Champions, also saw minimal traction. “The games division is currently performing well below its potential,” Zaslav remarked. Wiedenfels further explained that the additional writedown primarily stemmed from MultiVersus, contributing to a notable decline in studio profits.

Player data from SteamDB indicated just 686 concurrent players for MultiVersus at the time of reporting, with a 24-hour peak of 1,741 players—far from its peak of 153,433 players set over two years ago, before the game was taken offline and overhauled. Player counts for other platforms remain undisclosed.

With Season 4 launching on November 12, Warner Bros. has not specified what’s next for MultiVersus. However, earlier in the year, plans were reportedly scaled back for other underperforming titles, such as Suicide Squad: Kill the Justice League, leading to layoffs.

Warner Bros. Games reported a 31% revenue decline year-over-year in Q3 2024, citing a strong prior-year performance from Mortal Kombat 1 as a contrast to this year’s slate. In the current quarter, Warner Bros. anticipates stable or slightly improved results, with last year’s Switch release of Hogwarts Legacy balancing out lower costs.

Going forward, Warner Bros. plans to concentrate on its major franchises, including Hogwarts Legacy (a sequel is in development), Mortal Kombat, Game of Thrones, and DC, with an emphasis on Batman. This strategy includes new projects like Batman: Arkham Shadow on the Meta Quest 3 and a Wonder Woman game from Monolith Productions. "Our focus is now on developing core franchises with proven studios to improve success rates," Zaslav stated.