Netflix Downplays Warner Bros. Gaming Arm Value in $83 Billion Acquisition

Table of Contents

Add a header to begin generating the table of contents

Netflix is reportedly nearing a monumental $83 billion acquisition of Warner Bros. Discovery, a deal that has sparked significant industry attention. However, Netflix’s co-CEO Gregory Peters has stated that the company did not factor in any specific value from Warner Bros.’ gaming division into the deal’s valuation, deeming it "relatively minor" in the grand scheme of the acquisition.

Key Takeaways

Netflix’s $83 billion bid for Warner Bros. Discovery is nearing completion.
The streaming giant has explicitly stated that Warner Bros.’ gaming arm was not a significant factor in the deal’s valuation.
Despite this, Netflix acknowledges the potential of Warner’s gaming properties, like Hogwarts Legacy, and its talented studios.
Warner Bros. Games has experienced recent successes, such as Hogwarts Legacy, but also faced challenges with titles like Suicide Squad: Kill the Justice League.

Strategic Valuation

During an investor call, Gregory Peters clarified Netflix’s perspective on the acquisition. While acknowledging Warner Bros. Games has produced "great work," he emphasized that its value was not a primary consideration in the $83 billion figure. "We actually didn’t attribute any value to that from the get-go because they’re relatively minor compared to the grand scheme of things," Peters stated.

This assessment comes despite the significant success of Warner Bros. Games’ 2023 title, Hogwarts Legacy, which has sold over 30 million units and is considered one of the best-selling single-player games in history. Netflix does see potential in integrating some of Warner’s intellectual properties into its own offerings, citing Hogwarts as a prime example. Peters also expressed enthusiasm for the "great studios and great folks working there," indicating an opportunity for collaboration.

Gaming Division Performance

Warner Bros. Games has had a mixed recent history. While Hogwarts Legacy was a major commercial success, the company also faced significant setbacks with titles like Suicide Squad: Kill the Justice League and Multiversus. These challenges led to a major restructuring within WB Games, including studio closures and project cancellations.

Netflix, which has been expanding its own gaming initiatives, views the acquisition as a way to potentially leverage Warner’s existing gaming assets and talent. However, the explicit downplaying of the gaming division’s value in the deal’s financial model suggests that the core appeal of Warner Bros. Discovery for Netflix lies primarily in its film and television studios, extensive IP library, and streaming services like HBO Max.