Netflix Just Called Warner Bros Games Worthless in an $83 Billion Deal and Gamers Are Freaking Out

Hollywood just delivered one of the most consequential entertainment deals in history, and gamers are rightfully terrified about what it means for their favorite franchises. According to Bloomberg’s Lucas Shaw, Warner Bros Discovery will announce next week that they’re proceeding with Netflix’s $82.7 billion acquisition offer instead of Paramount Skydance’s competing bid. The streaming giant is buying the studio behind Harry Potter, Game of Thrones, DC Comics, and HBO in a move that reshapes the entire entertainment landscape. But here’s the part that should worry every Mortal Kombat and Batman fan: Netflix co-CEO Gregory Peters just admitted they didn’t attribute any value to Warner Bros Games when structuring the deal. Zero. None. It’s relatively minor compared to the grand scheme of things, he said.

What Netflix is Actually Buying

The $82.7 billion deal includes Warner Bros film studios, HBO and HBO Max streaming service, DC Comics intellectual property, television production facilities, and crucially for this conversation, Warner Bros Games. That gaming division includes some legitimately heavyweight studios. NetherRealm Studios created and maintains the Mortal Kombat franchise, one of the longest-running and most profitable fighting game series in history. Rocksteady developed the legendary Batman Arkham trilogy and the controversial Suicide Squad Kill the Justice League. Avalanche Software made Hogwarts Legacy, which sold over 30 million copies and generated billions in revenue.

Additionally, Netflix is getting TT Games, the LEGO game specialists behind countless licensed titles. Monolith Productions created the acclaimed Middle-earth Shadow of Mordor and Shadow of War games before Warner Bros shut them down in early 2025. The intellectual property alone is staggering: DC Comics means Batman, Superman, Wonder Woman, and the entire DC Universe. Harry Potter represents one of the most valuable entertainment franchises on Earth. Mortal Kombat has been printing money since 1992. This isn’t some indie publisher with niche titles. This is major league gaming content.

Netflix Said the Quiet Part Out Loud

During a conference call discussing the acquisition, Gregory Peters was asked whether buying Warner Bros would accelerate Netflix’s own gaming ambitions. His response was brutally honest and deeply concerning. He acknowledged that Warner Bros has great studios and great folks working there, and there’s definitely an opportunity. But then came the kicker: We actually didn’t attribute any value to that part of the business in our deal model. They’re relatively minor compared to the grand scheme of things.

Let that sink in. Netflix just spent $82.7 billion acquiring a media conglomerate, and they didn’t factor the gaming division into their valuation at all. Not undervalued. Not discounted. Completely ignored. For context, Hogwarts Legacy alone generated over $1 billion in revenue in 2023. Mortal Kombat 11 sold over 15 million copies. The Batman Arkham series is considered one of the greatest superhero game trilogies ever made. And Netflix looked at all of that and said it doesn’t matter.

Why Netflix Doesn’t Care About Games

Netflix has had an extraordinarily complicated relationship with gaming. The company launched its games initiative in 2021 with mobile titles tied to its popular shows like Stranger Things and Squid Game. The strategy was simple: use gaming as a retention tool to keep subscribers engaged between seasons of their favorite shows. Results have been underwhelming at best. Despite releasing dozens of mobile games, engagement remains minimal. Most Netflix subscribers don’t even know the games exist, and those who do rarely play them.

The company tried pivoting to cloud gaming ambitions in 2022 and 2023, exploring technology that would let subscribers stream AAA games through the Netflix app. That initiative quietly died. In October 2024, Netflix shut down Team Blue, an internal studio that never shipped a single game. They closed Boss Fight Entertainment, the developer behind Squid Game Unleashed, and sold Spry Fox back to its founders. The company publicly pivoted toward party and social games that can be played on connected TVs using phones as controllers, a strategy that sounds desperate for relevance.

What This Means for Your Favorite Franchises

If Netflix doesn’t value Warner Bros Games and has repeatedly failed at its own gaming initiatives, what happens to Mortal Kombat, Batman, and Hogwarts Legacy? The pessimistic scenario involves Netflix treating the gaming division as a legacy obligation rather than a growth opportunity. They keep the studios running on minimal investment, release sequels when contractually obligated, but never provide the resources needed to truly excel. Development teams hemorrhage talent as employees flee to studios that actually care about games. Quality declines. Franchises die slow deaths.

The optimistic scenario is that Netflix realizes they accidentally acquired valuable IP and talented studios they can leverage properly. Hogwarts Legacy 2 is basically a guaranteed billion-dollar release if they don’t mess it up. A proper Batman Arkham sequel from Rocksteady after the Suicide Squad disaster could restore that studio’s reputation. Mortal Kombat has a dedicated competitive scene and consistent sales that generate reliable revenue. Maybe Netflix assigns someone who actually understands gaming to oversee the division and lets the studios do what they do best.

The Paramount Counteroffer Complication

This story isn’t over yet. Lucas Shaw reports that Warner Bros will announce next week they’re proceeding with Netflix’s offer, but Paramount Skydance has submitted a hostile counterbid worth $108.4 billion. That’s significantly more than Netflix’s $82.7 billion offer. Paramount’s bid includes taking on Warner Bros Discovery’s approximately $30 billion in debt and keeping the entire company together rather than splitting off cable networks like TBS, TNT, and CNN into a separate entity.

If Paramount wins, the gaming division’s fate might be different. Paramount acquired several studios in recent years as part of their own transmedia push. They understand that franchises need to exist across movies, TV, and games simultaneously. A Batman game launching alongside a new Batman movie creates synergistic marketing that benefits both. Game of Thrones could support an MMO or action RPG that keeps fans engaged between seasons. Paramount might actually see value in Warner Bros Games that Netflix doesn’t.

However, Shaw reports that Netflix matched Paramount’s $5 billion breakup fee, signaling extreme confidence they can get regulatory approval despite the deal’s size. That $5 billion doesn’t mean much to a company worth over $450 billion, but it demonstrates Netflix is serious about closing this acquisition. Governments will review the deal extensively. Paramount may fight the outcome in court. This battle could stretch well into 2026 before resolution.

Warner Bros Games Was Already Struggling

To be fair to Netflix, they’re not inheriting a thriving gaming division. Warner Bros Discovery’s Q1 2025 earnings report showed games revenue dropped 48 percent year over year, driven by a lack of new releases and the catastrophic failure of Suicide Squad Kill the Justice League. That game reportedly lost Warner Bros hundreds of millions of dollars and damaged Rocksteady’s reputation after the studio spent nearly a decade building goodwill with the Arkham trilogy.

In February 2025, Warner Bros shut down three major studios: Monolith Productions, Player First Games (developers of MultiVersus), and WB San Diego. The Wonder Woman game that Monolith was developing got cancelled despite enthusiastic fan interest. Reports suggested Mortal Kombat 1 underperformed expectations, with future DLC allegedly cancelled. WB Discovery management indicated the games division wasn’t profitable and reported $384 million in impairments due to game failures.

So Netflix is acquiring a gaming division in crisis, one that Warner Bros Discovery itself didn’t know how to fix. The question isn’t whether WB Games is currently successful, because it clearly isn’t. The question is whether Netflix will invest in turning it around or simply let it continue declining until the franchises become worthless.

Community Reaction is Overwhelmingly Negative

Reddit discussions about Netflix’s comments regarding Warner Bros Games have been brutal. Gamers are expressing genuine fear about what happens to these franchises under ownership that explicitly doesn’t value them. Multiple highly upvoted comments predict the gaming division will be gutted within months of the merger completing. Others point out that without IP ownership, most studios have no value, and Netflix could simply shut them down and license the properties to other publishers.

Industry analysts are equally pessimistic. Symbol Zero CEO Rafael Brown stated he expects Warner Bros Games to start hemorrhaging talent a few months after the merger completes. When employees realize they’re working for a company that considers their entire division worthless, they leave for studios that actually want them. Brain drain accelerates. Institutional knowledge disappears. The studios that remain are hollow shells of what they once were.

The Irony of Netflix and HBO

There’s delicious irony in Netflix acquiring HBO. Former Time Warner chief Jeff Bewkes once dismissed Netflix as the Albanian army, a weak force that posed no threat to HBO’s dominance in prestige television. Netflix responded by saying their goal was to become HBO before HBO could become Netflix. Fifteen years later, Netflix is buying HBO outright. The streaming wars produced a clear winner, and legacy media lost spectacularly.

But that victory doesn’t necessarily translate to gaming. Streaming and gaming require fundamentally different expertise, infrastructure, and creative approaches. Netflix succeeded by understanding how people consume television and movies, then building technology and content libraries to serve that consumption better than anyone else. Gaming requires understanding interactive entertainment, gameplay loops, monetization strategies for premium and live service titles, community management, and entirely different creative processes. Netflix has failed repeatedly to crack that code.

What Happens Next

Lucas Shaw reports that Warner Bros Discovery will make the official announcement next week confirming they’re proceeding with Netflix’s offer over Paramount’s counterbid. That triggers a lengthy regulatory review process where governments worldwide examine whether the deal creates monopolistic control over entertainment. The Federal Trade Commission, European Commission, and various national regulators will all need to approve. Netflix says they’re super confident it gets across the line, but that confidence might be misplaced given the deal’s size.

If approved, the acquisition closes in 12 to 18 months. During that transition period, Warner Bros Games continues operating as normal while Netflix figures out what to do with it. Projects already in development like Hogwarts Legacy 2 presumably continue. But future investments, new projects, and studio expansion plans likely get frozen until Netflix decides on a long-term strategy. That uncertainty creates the brain drain analysts predict, as top talent seeks stability elsewhere.

FAQs

Is Netflix really buying Warner Bros?

Yes, Netflix agreed to acquire Warner Bros Discovery’s studio and streaming businesses for $82.7 billion in cash and stock. The deal still requires regulatory approval and faces competition from Paramount Skydance, but Netflix and Warner Bros have entered exclusive talks.

What game studios does Warner Bros own?

Warner Bros Games includes NetherRealm Studios (Mortal Kombat), Avalanche Software (Hogwarts Legacy), Rocksteady Studios (Batman Arkham), TT Games (LEGO), and until recently Monolith Productions before it was shut down in February 2025.

Did Netflix say Warner Bros Games is worthless?

Co-CEO Gregory Peters said Netflix didn’t attribute any value to Warner Bros Games in their deal model, calling it relatively minor compared to the grand scheme of things. This suggests gaming wasn’t a factor in their acquisition decision.

What happens to Mortal Kombat and Batman games?

Unknown. Netflix has repeatedly failed at gaming initiatives and explicitly doesn’t value the Warner Bros gaming division. This raises concerns about future investment, development resources, and whether these franchises will be properly supported.

Is Paramount still trying to buy Warner Bros?

Yes, Paramount Skydance submitted a hostile counterbid worth $108.4 billion after Netflix entered exclusive talks. Warner Bros is expected to announce next week they’re proceeding with Netflix’s offer, but Paramount may fight the decision potentially in court.

When does the Netflix deal close?

If approved by regulators, the acquisition closes in 12 to 18 months. The deal still requires Federal Trade Commission approval, European Commission approval, and various national regulatory reviews given its size.

Has Netflix succeeded at gaming before?

No, Netflix has repeatedly failed at gaming. Their mobile games see minimal engagement, cloud gaming initiatives died, internal studios shut down without releasing games, and they’ve pivoted strategies multiple times without finding success.

How much money does Warner Bros Games make?

Q1 2025 saw a 48 percent revenue drop year over year due to lack of releases and Suicide Squad’s failure. However, Hogwarts Legacy generated over $1 billion, and Mortal Kombat historically performs well when properly supported.

Could Netflix sell Warner Bros Games?

Possibly. If Netflix concludes the gaming division doesn’t fit their strategy, they could spin it off or sell to another publisher. Take-Two, Electronic Arts, or even Microsoft could potentially be interested in acquiring the studios and IP.

Conclusion

Netflix calling Warner Bros Games worthless in an $83 billion acquisition represents either brutal honesty or catastrophic misunderstanding of the value they’re acquiring. Hogwarts Legacy alone generated over a billion dollars. Mortal Kombat has been a consistent performer for three decades. The Batman Arkham trilogy is considered one of gaming’s greatest achievements. These aren’t minor properties. They’re pillars of the industry that millions of fans care deeply about. The fact that Netflix looked at all of that and decided it contributed zero value to their deal model should terrify everyone who loves these franchises. Yes, Warner Bros Games has struggled recently. Studio closures, cancelled projects, and catastrophic failures like Suicide Squad have damaged the division’s reputation and profitability. But those problems stem from poor management decisions and lack of investment, not inherent flaws in the studios or IP. Under proper leadership with adequate resources, these teams could absolutely deliver hit after hit. The question is whether Netflix, a company that has failed repeatedly at gaming and explicitly doesn’t value this division, will provide that leadership and investment. Or will they treat Warner Bros Games as a legacy obligation to be managed for minimum cost until the studios collapse and the franchises die? Lucas Shaw reports the official announcement comes next week. Regulatory battles will drag on for over a year. And gamers worldwide will spend that entire time wondering whether their favorite franchises just got sentenced to death by a streaming company that considers them irrelevant. Welcome to the future of gaming under Netflix ownership. It’s probably going to suck.