WarnerMedia to join Discovery – but fate of games businesses remains uncertain

After speculation over the last year that parent company AT&T might be up for selling Warner Media, which includes Warner Bros Interactive Entertainment, a deal has finally come out into the light. Although for the games segment things are still less than clear.

What’s certain is that in the main, WarnerMedia will merge with Discovery to create an entertainment powerhouse that can compete with other streaming giants on the market.

However, the fate of the games studios and publishing capability of Warner Bros Interactive Entertainment is less clear. There have been many reports, all drawn from one single short quote attributed to an AT&T spokesperson via Axios that reads.

“Some of the gaming arm will stay with AT&T and some will go with the new company.”

WBIE consists of 11 different subsidiaries, including Avalanche, Monolith, NetherRealm, Rocksteady and TT Games. But there’s been no specific announcement on the plan for these games business. And these are studios responsible for huge titles and for key elements of even larger IPs.

Even if staff internally have been informed, it must be somewhat frustrating, especially given games’ profile over the last year, that it wasn’t spelt out proudly in the various communications that have gone out to date.

It doesn’t make much sense for any of the named developers of big IPs to stay with AT&T, given that the whole point of the deal is to divide the media-creation part of the business away from the telecommunications backbone.

To divide those studios away from the IP-holder that they rely on would be strange in the extreme. For example, Rocksteady makes (incredibly successful) DC Universe games, if it stayed at AT&T it would need to license the IP from its previous company.

Of course, little about all this makes a lot of sense admittedly. The whole move is something of a U-turn after AT&T’s 2018 acquisition of Time Warner, which was done in order to bolster its media arsenal, a move now looks like a strategic misstep as it shifts those assets elsewhere.