Today, during Warning Bros. Discovery's quarterly financial conference call, chief executive officer David Zaslav talked about Mortal Kombat 1, Hogwarts Legacy, and the company's gaming business.
During the prepared remarks of the livestreamed conference call, Zaslav mentioned that the company sees a particular opportunity in gaming since research has shown that Generation Z and Generation Alpha prefer gaming to any other form of entertainment including social media, television, music, and movies.
The executive described the company's gaming studio as an "asset in its arsenal" and a "critical differentiator and a real growth opportunity."
He also boasted about the success of Hogwarts Legacy as the number-one console release this year, with the Switch version still to come next week. He also added that fans have played over 700 million hours to date.
According to Zaslav, that kind of engagement doesn't just help the games business for Warner Bros., but it also "revitalizes the entire Harry Potter franchise" and the company knows that fans want more.
Games have been a "successful and steady segment" for Warner Bros., having been profitable in each of the latest 15 years, averaging more than $400 million in EBITDA earnings in the last three years. As such, Warner believes that they are a "valuable and critical asset for the company with a great potential for growth."
Zaslav added that games have enjoyed one of the highest returns on investment among all of Warner's business, mentioning that the company is "clearly punching above its weight and is just getting started."
Moving on to Mortal Kombat 1, the executive revealed that it has sold nearly 3 million copies since it launched in September. As a result of this gaming success, Warner intends to continue to invest more capital and resources into the business.
Zaslav also mentioned that we can expect the company to embrace the GAAS model:
"Our focus is on transforming our biggest franchises from largely console and PC-based with 3-4 year release schedules to include more always-on gameplay through live services, multiplatform, and free-to-play extensions, with the goal of having more players spending more time on more platforms. U
Ultimately, we want to drive engagement and monetization over longer cycles and at higher levels where per specific capabilities we're currently under scale, and see significant opportunity to generate greater post-purchase revenue"
Within the company's financial presentation, we also read that "games revenue increased meaningfully due to the Q3 release of Mortal Kombat 1 and continued performance of Hogwarts Legacy."
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