Netflix Has the Controller Now: What’s Next for Warner Bros. Games?

Just when it looked like the Warner Bros. tug-of-war was over, someone lit another fuse. After word spread that Netflix had a deal to take over Warner Bros. Discovery, Paramount reportedly jumped back in with a fresh, all-cash tender offer. In other words: the battle you thought ended may not be done yet.

Paramount crashes the party

Paramount has, per multiple reports, launched a tender offer to buy every outstanding share of Warner Bros. Discovery for $30 a pop. That pegs the enterprise value at about $108.4 billion. If that actually lands, it would blow up Netflix’s plan. If it doesn’t, Netflix still ends up with the keys to the Warner library and everything under that umbrella.

Quick refresher: Warner Bros. Discovery is the parent company that holds the Warner film and TV operations, plus its gaming arm. So this is the whole house, not just a few rooms.

So... what happens to WB Games?

This is where things get interesting. The obvious prize for Netflix is the film and TV IP. But there is real money and potential sitting in WB Games, which includes several major studios whose future suddenly looks very TBD.

• TT Games - the LEGO game specialists
• Rocksteady Studios - the Batman: Arkham team
• NetherRealm Studios - the Mortal Kombat house

According to The Hollywood Reporter, even though the game division makes money and regularly spins up IP Hollywood likes to mine, it is not in the top three assets Netflix plans to prioritize if it ends up owning the company. That does not scream top priority.

Netflix and games: awkward fit, so far

Joost van Dreunen, who teaches at NYU Stern and wrote 'One Up: Creativity, Competition, and the Global Business of Video Games,' is not exactly sold on Netflix as a gaming steward. Netflix dipped into games in 2021 with casual mobile titles tied to its own shows, but van Dreunen’s read is that those were more like marketing add-ons than a real strategic push. He points out that Netflix once talked about games like they were going to be transformative, but the execution never matched the pitch. His take: it is not for lack of IP or talent, it just has not clicked as a natural fit at Netflix.

'I read the acquisition pitch deck, and they mentioned the word "games" exactly twice and the plan is never described.'

He is still optimistic they could land on something reasonable eventually, but he also thinks the games pot has been moved to the back burner.

The bottom line

If Netflix wins, expect the near-term focus to be movies and TV first, with WB Games getting less attention than its financials might deserve. If Paramount’s bid somehow succeeds, we are in a whole different conversation. Either way, the games division is a valuable piece that feels oddly sidelined in all the big talk about this deal. And for a company with studios like NetherRealm and Rocksteady, that is a wild thing to say out loud.