We're going to be releasing 12 films, 6 games. We have a lot of points to be very excited about. CFO Gunnar Wiedenfels grouped movie and game releases together in the latest earnings call: The good news is that WBD management seems to realize the similarity between games and movies. It was previously reported that FIFA upped the price for its license to over $1 billion per four-year World Cup cycle and Jackson (EA exec) admits money was a factor in the decision to rename the franchise. The deal with FIFA is set to end partially because of money. Licensing fees can grow to be rather large expenses for gaming companies, as EA's deal with FIFA showed: Note that WBD Games would have higher margins than other gaming companies, given it is essentially paying the IP licensing fees to itself while other gaming companies pay it to others. WBD can boost studios' margins by leaning into games (compiled from WBD earnings report and Seeking Alpha's financials page) If they can do that, games can bring in multi-billion dollars every year to the company's studio business at a higher margin, leading ultimately to higher EBITDA and free cash flow. Investors would reap enormous rewards if the company can indeed improve and invest in its gaming companies in order to reimagine all of its amazing IP, whether its Harry Potter, Game of Thrones, the Matrix, or DC. With the successful launch of Hogwarts Legacy 2 weeks ago, we reimagined one of the biggest global franchises in the world. Zaslav briefly touched on what the strategy looked like for Harry Potter. In the latest earnings call, CEO David Zaslav described games as a core part of the company's strategy. Games in general cost less than movies to produce but can produce higher revenue. That's on par with the average Harry Potter movie (although the movies would cost more if adjusted for inflation). Not only can it be as big, but it is also more profitable Hogwarts Legacy reportedly cost $150 million to produce. This trend shows that gaming can grow to become as big a business unit for WBD as the movie studio business. It is also not the first time that a video game outpaced the box office performance of a movie with the same IP "Marvel's Spider-Man" game's first three days sales crushed that of "Spider-Man: Homecoming" on opening weekend. movie since the Joker in 2019 (although the game could surpass the Joker as well over time). But the game isn't just outselling Harry Potter movies, it actually has the highest sales compared to any Warner Bros. This isn't an apples-to-apples comparison given box office numbers aren't adjusted for inflation. While the box office performance is in the US only while the game's sales are global, Hogwarts Legacy is yet to be released on PS4 and Nintendo, so its sales numbers are likely to increase even more. Hogwarts Legacy's sales numbers in its first two weeks saw it recognize $850 million in revenue, multiples of any Harry Potter movie ever generated. Hogwarts Legacy absolutely destroys all Harry Potter movies () Games Are as Viable as the Movie Theater BusinessĬonsider the box office performance of Harry Potter Movies: It will also briefly discuss Q4 results, arguing that the cash flow generation of the business remains strong in the long-term. This article will discuss the relevance of the game's financial performance and why gaming can be a crucial part of the company's business going forward. Discovery's ( NASDAQ: WBD) announcement that Hogwarts Legacy has generated $850 million in sales two weeks after its release shows why the gaming unit could boost the stock. Unfortunately for those that have already put their name down for this game, no upgrade options have been announced by Warner Bros Games, the publishers, effectively disregarding this customer-friendly approach towards fans.Ivanastar/iStock Unreleased via Getty Images ![]() Hogwarts Legacy is currently priced by UK retailers as follows: Read more: Hogwarts Legacy: Release Date, Gameplay Trailer and Everything We Know So Far However, that does not appear to be the case for Hogwarts Legacy. So far, we have seen other titles such as Horizon Forbidden West offer up £10 upgrade fees for those that have upgraded their gaming software. Hogwarts Legacy has been advertised as an open-world AAA title that will immerse fans in and around the famous School of Witchcraft and Wizardry. ![]() Read more: Hogwarts Legacy Delayed Until 2023, Insider Claims At the time of writing, Avalanche Software, the developers of the game, announced that the game will be launched by 'Holiday 2022', despite reports suggesting that gamers will have to wait until 2023.
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