According to IGN, Netflix co-CEO Greg Peters stated the company attributed zero value to Warner Bros.’ video game business in its $82.7 billion acquisition deal. This division includes major studios like NetherRealm (Mortal Kombat), Rocksteady (Batman: Arkham), Avalanche Software (Hogwarts Legacy), and Traveller’s Tales (LEGO games). Peters called the games business “relatively minor compared to the grand scheme of things,” despite Hogwarts Legacy selling tens of millions of copies. The deal itself may not close until summer 2027. This comes after a brutal period for Warner Bros. Games, which took a $200 million hit from Suicide Squad: Kill the Justice League and a $100 million loss from MultiVersus, leading to studio closures and a refocus on just four key franchises.
Netflix’s Cold Calculus
Here’s the thing: Netflix’s statement is brutally honest, not necessarily wrong from a pure acquisition math standpoint. An $82.7 billion deal is about streaming dominance, IP libraries, and global subscriber bases. Even a multi-billion dollar games division can look like a rounding error in that context. But saying it out loud? That’s a chilling message to send to the developers at those “great studios” Peters mentioned. It basically says, “You’re not why we’re here, but hey, maybe we’ll find something for you to do.” It turns the games division from a prized asset into an inherited hobby. The real question is, what does Netflix actually want from gaming? So far, its strategy has been scattershot—some mobile games based on shows, a few bigger hires, and then quick studio closures. Absorbing Warner Bros. Games doesn’t fit that pattern at all.
A Division in Disarray
And let’s be clear, Netflix is buying a games business that’s already on the ropes. The report outlines a bloodbath: a $200M Suicide Squad flop, a $100M MultiVersus failure, the cancellation of the Wonder Woman game, and the shuttering of multiple studios. They’re now trying to batten down the hatches around just four franchises: Mortal Kombat, Harry Potter, DC, and Game of Thrones. When the CEO of the parent company, David Zaslav, admits the segment is “substantially underperforming,” you know it’s bad. So in a way, Netflix’s zero valuation is just acknowledging recent reality. They’re not buying a well-oiled machine; they’re acquiring a portfolio of valuable IP and some talented, but likely demoralized, teams that come with it. The potential is there, but so is a ton of baggage.
What Happens Next?
So what happens to a Hogwarts Legacy sequel or the next Mortal Kombat? Games with long dev cycles, like the reported Lego Batman title due in 2026, will probably be fine—they’ll likely ship before the deal even closes. But anything further out is now shrouded in doubt. Will Netflix greenlight a big, expensive, single-player Batman game from Rocksteady? That doesn’t align with their current gaming model of lower-cost, service-oriented titles. Will they see the value in funding a massive AAA Hogwarts Legacy sequel? Maybe, but only if they can tightly integrate it into their subscription ecosystem in a way they haven’t figured out yet. The most likely outcome, at least initially, is more cancellations and “restructuring.” Netflix will keep the crown jewels (the IP) and maybe a few key teams, but the rest could be seen as redundant. It’s a nervous wait until 2027 for everyone at those studios.
The Bigger Picture
This whole situation highlights the weird, still-unproven place of games inside a streaming giant. Netflix wants gaming to be a value-add for subscribers, a retention tool, not a traditional hit-driven business. Warner Bros. Games is the opposite—it’s built on $70 boxed products and live-service ambitions. Those are two fundamentally different cultures and financial models. Peters’ comments, as reported by Pocket Gamer, suggest Netflix hasn’t even begun to solve that puzzle. They bought the house for the foundation and the view, and they’re not quite sure what to do with the elaborate, slightly broken game room attached to it. They might renovate it. They might just lock the door and forget about it. For fans of these franchises, that’s a terrifying limbo.
