Warner Bros. Discovery reported today that its game revenue suffered a major drop this quarter from the same period last year, largely due to weak performance of Suicide Squad: Kill the Justice League.
Games revenue, under the WB Games division, dropped 41% year-over-year. Though Suicide Squad's struggles were the main culprit, it was admittedly up against stiff competition: last year's comparable included strong sales of Hogwarts Legacy, which launched in February of 2023 and continued to do exceedingly well throughout the year that followed. It sold 22 million copies in 2023 alone, and has since reached 24 million.
Suicide Squad, meanwhile, was panned by critics and called "disappointing" by WB Discovery boss David Zaslav last quarter, and resulted in a $200 million impairment charge in that report. An impairment charge is a practice businesses use when they need to write off or report a reduction in the value of some of their assets that they previously thought would have a higher value.
Speaking of impairment charges, Warner Bros. Discovery undertook a massive one this quarter outside of games. The company reported revenue of $9.7 billion, but an overall net loss of $10 billion, $9.1 billion of which was due to impairment charges. Officially, WB cited the charge as due to "the difference between market capitalization and book value, continued softness in the U.S. linear advertising market, and uncertainty related to affiliate and sports rights renewals, including the NBA."
The first part, about book value, is WB reevaluating the value of its TV networks segment in light of customers and advertiser interest in streaming and digital content over traditional TV. But the NBA bit was likely responsible for a hefty sum of the impairment charge too. WB's contract for NBA media rights expires after the 2024-2025 season, and the NBA appears to have opted to take its business to Amazon instead. Though WB has since attempted to exercise what it says are its rights to match Amazon's offer and is suing the NBA over them, it doesn't seem likely to win.
While all that sounds fairly dismal, WB's subscription services were up 3.6 million from last quarter, bringing its total to 103.3 million. This is the first time the company has passed 100 million subscribers.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to [email protected].
