Warner Bros. shuts down three game studios

The studios behind the Middle-earth games and MultiVersus are no more.

Warner Bros. Discovery Inc. is closing three video game studios of Monolith Productions, Player First Games and Warner Bros. Games San Diego and halting work on a highly anticipated Wonder Woman title in a bid to boost the profitability of its interactive entertainment business.

“We have had to make some very difficult decisions to structure our development studios and investments around building the best games possible with our key franchises – Harry Potter, Mortal Kombat, DC and Game of Thrones,” the statement said. “After careful consideration, we are closing three of our development studios – Monolith Productions, Player First Games and Warner Bros Games San Diego.”

“The quality of too many of our new releases has really missed the mark,” JB Perrette, head of games and streaming for Warner Bros., wrote in the memo. “We need to make some substantial changes to our portfolio/team structure if we are to commit the necessary resources to get back to a ‘fewer but bigger franchises’ strategy.”

With this closure, the games industry loses three incredibly storied studios. Monolith Productions, which had been working on Wonder Woman, was founded in 1994 and acquired by WB in 2004. It’s best-known for Middle-earth: Shadow of Mordor and its sequel, Shadow of War, the former of which pioneered the lauded Nemesis system that WB successfully patented in 2021.

Player First Games, a newer studio established in 2019, was responsible for MultiVersus. The game was well-received critically and saw launch success, but underperformed relative to WB’s expectations. WB San Diego, similarly, is a newer studio established in 2019 with a focus on mobile, free-to-play games.

Developing properties in-house, as Netflix and other newer gaming entrants have discovered, is often an expensive and time-consuming process. Many media companies have opted to license their franchises to third-party gaming specialists. In its quarterly earnings report last November, Player First Games announced it was taking a $100 million impairment charge for underperforming releases like MultiVersus. The division needs to “deliver more consistency,” CEO David Zaslav said during an earnings call with Wall Street analysts.