AT&T is in discussions to sell off its Warner Bros. Interactive Entertainment gaming division, the owners and publishers of the Mortal Kombat video game series, in a deal that could be worth around $4 billion. Warner Bros. Interactive Entertainment is the video gaming development and publishing arm of Warner Bros. Entertainment Inc., which is part of the WarnerMedia conglomerate (formerly Time Warner) purchased by AT&T back in 2018.
WB Interactive owns several game development studios, including TT Games, Rocksteady Studios, NetherRealm Studios, Monolith Productions, Avalanche Software, and WB Games Boston, Montréal, and San Francisco. Some of their recent titles include LEGO Jurassic World, Harry Potter: Wizards Unite, The LEGO Movie 2 Videogame, and Mortal Kombat 11 (which just released its Aftermatch DLC). The company is also set to distribute Cyberpunk 2077 in North America on behalf of the game’s developer and publisher CD Projekt Red.
According to a report by CNBC, some of the potential buyers of WB Interactive include Take-Two, Electronic Arts, and Activision Blizzard, although nothing is set or final at this stage of the potential sale. None of the three companies mentioned have commented or spoken out in response to the report. CNBC mentions that one of AT&T’s investors, activist hedge fund Elliott Management, is calling for the company to divest some of its businesses to reduce its debt, which could put WB Interactive on the chopping block. The sale could also be motivated by the deepening recession caused by the ongoing global pandemic.
Several of the video game series that WB Interactive develops or publishes feature intellectual properties that Warner Bros. or WarnerMedia owns, including Harry Potter, Mortal Kombat, DC Comics (for the Batman Arkham and Injustice series), LEGO, and more. Of course, AT&T may be looking to still earn some revenue after it’s sold off WB Interactive through licensing agreements for its IPs, as it’s expected that the properties would remain to be under the ownership of AT&T and WarnerMedia.
If a sale does occur, it will be worrying to see what could potentially happen to some of the studios under WB Interactive, as well the potential disaster the deal could hold for publishing rights the company currently holds. With ten studios under it belt, it wouldn’t be surprising if some of the them didn't survive a sale to AT&T. WB Interactive has also been publishing IO Interactive’s Hitman games for a few years now, but it looks like the studio’s latest game, Hitman 3 ( announced at the recent PlayStation 5 showcase) won’t be published by WB Interactive. Whether that situation is a direct effect of the potential sale or not is unclear, but the publisher's studio developers and customers should all be prepared for radical change.
Source: CNBC