Warner Bros. Games Revenue Drops 29% in Q4 as Company Shuts Down Multiple Studios

Warner Bros. has released its Q4 and full-year 2024 financial results, reporting a 29% year-on-year decline in Q4 gaming revenue, citing underperformance compared to the previous year. While specific financial figures for the gaming division were not disclosed, the company stated that titles like Hogwarts Legacy and Mortal Kombat 1 performed better in Q4 2024 than they did in the same period the previous year.

Despite the downturn in gaming, Warner Bros.’ overall Studio segment (the division that includes film, television, and gaming) revenue grew by 16% to $3.65 billion for the quarter, though full-year revenue dropped 5% to $11.6 billion. Warner Bros.’ total revenue for the fourth quarter declined 1% year-over-year to $10 billion, while full-year revenue fell 4% to $39.3 billion compared to 2023.

The company attributed the sharp decline in gaming revenue to a disappointing year for its games business, which triggered a major restructuring that led to the closure of three studios: Monolith Productions, Player First Games, and Warner Bros. San Diego.

The shutdown of Monolith Productions, best known for its acclaimed Middle-earth series, resulted in the cancellation of its highly anticipated Wonder Woman game. Monolith had built a strong reputation for its innovative Nemesis System, first introduced in Middle-earth: Shadow of Mordor (2014), which won numerous Game of the Year awards. Its sequel, Middle-earth: Shadow of War (2017), expanded and improved the system further; with Warner Bros. holding the Nemesis System patent and Monolith now shut down, the mechanic will remain unavailable until the patent expires in 2036.

Monolith’s closure marks the end of a studio that had been shaping action-adventure games since its founding in 1994, with earlier hits like F.E.A.R., Shogo: M.A.D., Blood 2, Condemned, and No One Lives Forever. Despite Monolith’s track record of innovation and commercial success, Warner Bros. opted to eliminate the studio entirely.

In a letter to shareholders, Warner Bros. emphasized that its restructuring is aimed at “refocusing resources” on proven franchises. Moving forward, the company will prioritize four billion-dollar IPs: Harry Potter, Game of Thrones, Mortal Kombat, and DC properties, particularly Batman. The company pointed to Hogwarts Legacy’s continued success as a validation of this strategy, reaffirming its goal to produce “high-quality games with long-term engagement”. Warner Bros. expects its gaming division to return to profitability in 2025.