Netflix closed an $82.7 billion deal to acquire Warner Bros on Friday, and buried in all the headlines about HBO Max and Game of Thrones is a detail that should terrify gamers. Warner Bros Games is part of the acquisition. That means Netflix, a company that has spectacularly failed at gaming multiple times, now owns NetherRealm Studios (Mortal Kombat, Injustice), Rocksteady Studios (Batman Arkham series), Avalanche Software (Hogwarts Legacy), TT Games (LEGO), and every other development team under the WB Games umbrella. A Warner Bros Discovery spokesperson confirmed the gaming division is included in the transaction, which is expected to close in the third quarter of 2026 after regulatory approval.
What Netflix Is Getting
Warner Bros Games controls some of the most valuable intellectual property in gaming. NetherRealm Studios has been producing Mortal Kombat games since 2011, with the franchise generating billions in revenue. The studio also created the Injustice series, bringing DC superheroes into fighting game arenas. Rocksteady Studios defined the modern superhero game with the Batman Arkham trilogy, setting standards that developers still chase today. Avalanche Software recently delivered Hogwarts Legacy, which sold over 15 million copies and generated more than $1 billion in revenue.
TT Games has been the custodian of LEGO video games for nearly two decades, creating kid-friendly versions of Star Wars, Harry Potter, Marvel, DC, and countless other franchises. Portkey Games oversees Harry Potter gaming projects. WB also operates studios in Boston, Montreal, New York, and San Francisco working on various projects. This is a massive gaming operation that employs hundreds of developers and generates substantial revenue annually.
Netflix’s Gaming Track Record
Here’s the problem. Netflix has tried gaming multiple times and failed spectacularly every time. The company launched Netflix Games in 2021 with mobile titles that almost nobody played. Despite acquiring studios like Night School Studio (Oxenfree) and Next Games, engagement remained abysmal. Reports showed less than 1% of Netflix subscribers ever touched the gaming section. The company pivoted strategies repeatedly, experimenting with cloud gaming, then shutting down its AAA game studio before it even released anything.
In October 2024, Netflix shut down its Southern California game studio that was developing an AAA title, laying off veteran developers including former Overwatch executive producer Chacko Sonny. That studio never shipped a single game. Multiple gaming executives have left Netflix due to strategic confusion and lack of commitment. The company’s gaming initiatives have been characterized by poor planning, minimal marketing, and a fundamental misunderstanding of what makes games successful. Now this same company controls studios that make some of gaming’s most beloved franchises.
What Could Go Wrong
The nightmare scenario is Netflix treating these studios like content farms for its streaming service rather than respecting them as game developers. Imagine Mortal Kombat 2 being cancelled mid-development because Netflix executives decide fighting games don’t drive enough subscriber growth. Picture Rocksteady being reassigned to create a cheap Batman mobile game instead of the next Arkham title. Consider the possibility of Netflix demanding these studios pivot to live service models or free-to-play monetization because that’s what streaming executives think gaming should be.
Warner Bros Games recently underwent significant layoffs in 2025, cutting staff at Player First Games (MultiVersus), WB San Diego, and Monolith Productions (Wonder Woman game). Multiple projects were cancelled. The division was already struggling under Warner Bros Discovery CEO David Zaslav, who treated gaming as an afterthought compared to film and television. Now these studios face ownership by a company with zero proven ability to manage game development successfully.
The Best Case Scenario
The optimistic take is that Netflix sees Warner Bros Games as an established, profitable division and leaves it alone to operate independently. The company’s press release emphasized maintaining Warner Bros’ current operations and building on its strengths. Co-CEO Ted Sarandos stated the acquisition aligns with Netflix’s mission to entertain globally through compelling narratives, which could theoretically include games if leadership understands their value.
Netflix acquiring Warner Bros Games could strengthen the streaming giant’s gaming ambitions by giving it established studios, proven franchises, and developers who know how to ship successful titles. Hogwarts Legacy alone demonstrated that Warner Bros Games can produce billion-dollar hits. If Netflix provides funding, removes bureaucratic obstacles, and lets developers create the games they want to make, this could work. But Netflix’s track record suggests that’s wildly optimistic thinking.
Regulatory Concerns
The deal still needs regulatory approval, and antitrust concerns are mounting. Netflix is offering a $5.8 billion breakup fee if regulators block the acquisition, demonstrating how seriously they’re taking potential obstacles. The merger consolidates enormous entertainment power under one company, reducing competition in streaming, film production, and now gaming. Theater chains have already voiced concerns about Netflix potentially ending theatrical releases for Warner Bros films.
From a gaming perspective, regulators should examine whether Netflix’s ownership helps or hurts the industry. If Netflix cannot successfully manage these studios and starts shutting them down or cancelling projects, that removes competition and reduces the number of quality games reaching consumers. The Microsoft-Activision acquisition faced intense scrutiny over similar consolidation concerns, and this deal is even larger in scope and financial value.
FAQs
Did Netflix buy Warner Bros Games?
Yes. A Warner Bros Discovery spokesperson confirmed the recently restructured video game division, which includes studios like NetherRealm (Mortal Kombat), Rocksteady (Batman Arkham), Avalanche (Hogwarts Legacy), and TT Games (LEGO), will be joining Netflix as part of the $82.7 billion acquisition.
When does the Netflix Warner Bros deal close?
The acquisition is expected to close in the third quarter of 2026, approximately 12 to 18 months from the December 2025 announcement. The deal must first receive regulatory approval and complete Warner Bros Discovery’s planned spin-off of its Discovery Global networks division.
What game studios does Netflix now own?
Netflix will own NetherRealm Studios (Mortal Kombat, Injustice), Rocksteady Studios (Batman Arkham series), Avalanche Software (Hogwarts Legacy), TT Games (LEGO games), Portkey Games (Harry Potter), and WB studios in Boston, Montreal, New York, and San Francisco.
Has Netflix been successful with gaming before?
No. Netflix launched Netflix Games in 2021 with mobile titles that saw less than 1% subscriber engagement. The company shut down its AAA game studio in 2024 before releasing any games and has cycled through multiple gaming strategies without finding success.
Will Mortal Kombat and Batman games continue?
Unknown. Netflix stated it will maintain Warner Bros’ current operations, but the company hasn’t provided specific commitments about game development. The future of franchises like Mortal Kombat and Batman Arkham depends on how Netflix chooses to manage the gaming division after the acquisition closes.
Could regulators block the deal?
Possibly. The acquisition faces antitrust scrutiny due to concerns about reduced competition in streaming, film, and gaming. Netflix included a $5.8 billion breakup fee if regulators don’t approve the deal, indicating they expect potential regulatory challenges.
How much did Netflix pay for Warner Bros?
Netflix is paying $27.75 per share for an equity value of $72 billion. When Warner Bros’ existing debt is included, the total enterprise value reaches $82.7 billion, making this one of the largest entertainment acquisitions in history.
Conclusion
Netflix buying Warner Bros Games is either the best thing that could happen to these studios or an absolute disaster waiting to unfold. There’s very little middle ground given Netflix’s abysmal gaming track record and Warner Bros Games’ recent struggles under mismanagement. Mortal Kombat fans, Batman Arkham enthusiasts, and Hogwarts Legacy players should be extremely nervous about what happens when a company that can’t figure out mobile gaming suddenly controls billion-dollar franchises and legendary development studios. The deal won’t close until late 2026, giving regulators time to examine whether this consolidation serves consumers or just makes Netflix executives richer while killing beloved game franchises. For now, all we can do is hope Netflix recognizes these studios’ value and resists the urge to turn Mortal Kombat into a Netflix Original Series tie-in mobile game. But hope isn’t a strategy, and Netflix’s history suggests we should expect the worst.