Netflix has agreed to buy Warner Bros, including game developers behind Mortal Kombat, Hogwarts Legacy
If approved, Netflix will own Rocksteady, TT Games, and more
Netflix has agreed a deal to acquire the film and streaming business of Warner Bros Discovery, which also includes its video game arm.
After weeks of bidding from companies including Comcast and Paramount Skydance, the pair announced a deal worth $82.7 billion in enterprise value on Friday.
Warner Bros. owns IPs such as Harry Potter, Game of Thrones, and DC Universe. It also owns video game developers like Mortal Kombat’s NetherRealm Studios, Batman: Arkham creator Rocksteady, Hogwarts Legacy’s Avalanche, and Lego game studio TT Games.
According to Netflix, the deal “brings together two pioneering entertainment businesses”, combining “Netflix’s innovation, global reach and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling”.
The US competition regulator is likely to get involved before the deal closes, and Netflix is offering a $5 billion breakup fee if regulators don’t approve the deal, according to Bloomberg.
“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix. “By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends—with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”
Greg Peters, co-CEO of Netflix, added: “This acquisition will improve our offering and accelerate our business for decades to come. Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities.
“With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
David Zaslav, President and CEO of Warner Bros. Discovery said: “Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most.
“For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
It’s not clear what the deal could mean for Warner’s games business, and Friday’s announcement makes no mention of it. Netflix has made a muted push into the video game space for some years, hiring experienced talent and pushing video games playable in the Netflix app to its millions of users.
So far, Netflix’s game experiences have been mostly smaller, mobile-style titles rather than console-style blockbusters.
Netflix’s games boss, the experienced industry exec Mike Verdu, was replaced last year by former Epic VP Alain Tascan, who made widespread changes to its video game arm, including shutting down numerous aspects of it in an attempt to reorganise the interactive side of its business.
