Challenging Times for Animation and Gaming Studios

This week has brought more unsettling news for the animation, VFX, and video game sectors. Just a day after the collapse of Technicolor and the closure of Montreal’s On Animation Studios, Warner Bros. Discovery made a surprising announcement: they are shutting down three of their video game development studios.

Studios Affected

The three Warner Bros. Games studios facing closure are Monolith Productions, Player First Games, and Warner Bros. Games San Diego. While the exact number of layoffs is still unclear, it is anticipated that hundreds of employees will be affected.

CEO’s Insights

In a memo obtained by Bloomberg, JB Perrette, WBD’s CEO and president of global streaming and games, expressed concern over the quality of recent releases, stating, “The quality of too many of our new releases has really missed the mark. We need to make some substantial changes to our portfolio/team structure if we are to commit the necessary resources to get back to a ‘fewer but bigger franchises’ strategy.”

Focus on Core Franchises

Recently, Warner Bros. CEO David Zaslav indicated that the company’s gaming division will concentrate on just four key franchises: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC’s Batman.

About the Studios

Monolith Productions, established in 1994 and acquired by Warner Bros. Games in 2004, is renowned for titles like Middle-earth: Shadow of Mordor, F.E.A.R., and Blood. Unfortunately, their upcoming Wonder Woman video game has now been canceled.

Player First Games, based in Los Angeles, was acquired by Warner Bros. just last year and is known for developing the free-to-play platform fighter game Multiversus. In a recent earnings call, WB executives revealed a nearly $100 million impairment charge due to the underwhelming performance of Multiversus.

Warner Bros. Games San Diego, founded in 2019, has not disclosed the titles it was working on at the time of its closure.

Ongoing Reductions

The closure of these three studios is part of a broader trend of reductions within WB Games. Just a couple of months ago, it was reported that WB Games Montreal laid off nearly 100 employees. Despite these closures, WBD still maintains ownership of at least nine video game studios.

Looking Ahead

Warner Bros. is set to report its fourth-quarter earnings this Thursday, where we can expect further insights into its video game strategy moving forward. This is a crucial moment for industry leaders to pay attention to the evolving landscape of game development and the implications for the broader entertainment sector.