Netflix has officially valued Warner Bros. Games (WB Games) at 'zero'. WB Games is the gaming arm of Warner Bros. Discovery, housing heavy hitters like Avalanche Software, the developer behind Hogwarts Legacy, NetherRealm Studios of Mortal Kombat fame, and Rocksteady Studios, the team responsible for the Batman: Arkham series.

This news was confirmed on the 8th during an investor conference call hosted by Netflix co-CEO Gregory Peters regarding the acquisition of Warner Bros. Discovery. According to multiple reports, Peters remarked, "While it is true that they have produced excellent work in the gaming sector, we judged their contribution to the overall enterprise value to be trivial," adding, "We didn't assign any value to it from the start."

While he did suggest that, "Titles created by WB Games like 'Hogwarts Legacy' performed well, and I see potential for integrating them into Netflix’s service," he doubled down on the reality of the situation, stating, "The gaming division was not included in the transaction model." This effectively shows that Netflix’s $82.7 billion acquisition of Warner Bros. Discovery is focused primarily on transmedia content such as film and television IP.

Some observers suggest that we could see AAA titles based on exclusive Netflix IP in the long run. Netflix has been expanding its gaming division since 2021, including poaching executives from Epic Games, releasing titles based on its own IP, and bringing existing games onto its platform. Although some internal development teams were closed this year due to underperformance, the argument remains that incorporating established developers could lead to a strategic pivot.

However, looking strictly at this acquisition, it is highly likely that Netflix is not prioritizing gaming for the time being. The fact that they did not assign a separate value to the gaming division indicates that the industry carries very little weight in their post-acquisition plans. Consequently, we cannot rule out potential ripple effects on projects such as the sequel to Avalanche Software's Hogwarts Legacy, which had its development confirmed back in February.