The ongoing challenges for animation, VFX, and video game studios show no signs of abating this week. Following the recent collapse of Technicolor and the closure of Montreal’s On Animation Studios, Warner Bros. Discovery has made a surprising announcement about the shutdown of three of its video game development studios. This decision underscores the turbulent times faced by the industry.
The three Warner Bros. Games companies affected by this closure are Monolith Productions, Player First Games, and Warner Bros. Games San Diego. While the exact number of layoffs remains unclear, it is projected to be in the hundreds, highlighting the significant impact on the workforce.
According to JB Perrette, Warner Bros. Discovery's CEO and president of global streaming and games, the quality of recent releases has been unsatisfactory. In a memo obtained by Bloomberg, Perrette emphasized the need for substantial changes to the portfolio and team structure to focus on a strategy of "fewer but bigger franchises."
Warner Bros. CEO David Zaslav has previously indicated a strategic shift for the company’s game division to concentrate on four core franchises: Hogwarts Legacy, Mortal Kombat, Game of Thrones, and DC’s Batman.
Monolith Productions, based in Kirkland, Washington, was founded in 1994 and became part of Warner Bros. Games in 2004. Known for titles such as Middle-earth: Shadow of Mordor, F.E.A.R., and Blood, the studio was working on a Wonder Woman video game, which has now been canceled due to the closure.
Acquired by Warner Bros. last year, Los Angeles-based Player First Games developed the free-to-play platform fighter game Multiversus. Despite its promise, the game’s poor performance led to a nearly $100-million impairment charge for Warner Bros., as revealed in a recent earnings call.
Founded in 2019, Warner Bros. Games San Diego's projects remain undisclosed at the time of closure. The shutdown of these three studios is part of a broader trend of reductions within WB Games, including the recent layoff of nearly 100 workers at WB Games Montreal.
Despite these closures, Warner Bros. Discovery continues to own at least nine video game studios. The company is expected to provide further insights into its video game strategy during the upcoming fourth-quarter earnings report on Thursday.
As the industry grapples with these developments, the focus remains on how Warner Bros. Discovery will navigate the challenges to achieve its strategic goals in the evolving video game landscape.
