Warner Bros. has reported a sharp 48% decline in gaming revenue for the last quarter, marking a significant downturn in its interactive entertainment division. The drop comes as the company failed to release a single new game during the period, a rare occurrence for a major industry player. Analysts say the disappointing performance stems from a combination of internal setbacks, including the underperformance of Suicide Squad: Kill the Justice League and comparisons to the previous year’s massive hits, Hogwarts Legacy and Mortal Kombat 1.
Plans to expand on Hogwarts Legacy were reportedly scrapped earlier this year. Although never officially announced, an expansion and a Definitive Edition of the game were in the works but later cancelled due to concerns that the additional content lacked enough value to justify its cost. Similarly, additional content for Suicide Squad was also curtailed, with its final chapter released in January. While the game remains playable, fans criticized the conclusion as underwhelming, describing it as a rushed and unsatisfying end.
Studio Struggles and Game Cancellations Compound Losses
The fallout from Suicide Squad has been particularly significant. The game suffered from genre confusion, development delays, and shifting creative direction, which ultimately led to disappointing sales. Rocksteady, the studio behind the game, experienced layoffs as a result but is now reportedly turning its focus to a new single-player Batman title. Other planned titles, including a Wonder Woman game, were also cancelled.
Further compounding Warner Bros.’ troubles in gaming, the company ended support for its live-service fighting game Multiversus, leading to the closure of Player First Games and Monolith Productions. These setbacks resulted in a rare quarter with no major game launches, leaving a noticeable gap in the company’s entertainment portfolio. Warner Bros.’ next gaming release is expected to be Hogwarts Legacy for Nintendo’s upcoming Switch 2, aligning with the launch of the highly anticipated console.
Minecraft Movie Delivers Box Office Gold
Despite the downturn in gaming, Warner Bros. found a bright spot in its film division. The company’s motion picture arm has been enjoying strong momentum, largely fueled by the overwhelming success of The Minecraft Movie. In a recent letter to shareholders, Warner Bros. highlighted the film’s remarkable performance as a key driver of its overall entertainment earnings.
The game-to-film adaptation has brought in nearly $900 million globally since its release, with a staggering $300 million earned in its opening weekend alone. The Minecraft Movie currently stands as the highest-grossing film of 2025, solidifying Warner Bros.’ dominance at the box office, even as its gaming division regroups.
While the company faces immediate challenges in gaming, the continued success of its film business offers a counterbalance. Warner Bros. is expected to refocus its gaming strategy in the coming quarters as it looks to recover from a difficult start to the year.
