AT&T Looking to sell WB games.

[GordoSan]

Funny how so many people were stating that this deal wouldn't include WB properties like Harry Potter, LoTR, and DC. I just watched a Rand Al Thor vid where he says it too. Let me make it clear that there is NO way that WB is asking for $4B for the MK rights alone. He says that they'd have to pay for additional licensing, which may also be true... eventually. Still there is still NO way that for $4B, it isn't already pre-packaged in there, even if that licensing is only for a limited run until renewing at some point later in time. I have already stated at how with theme parks and movie rights, these deals are labeled "in perpetuity". In those cases, the licensing does get renewed, but unless they misrepresent the characters or leave them idle for too long, it is basically forever. I mean, WB are selling off their gaming division! They are not likely going to piecemeal the thing to multiple companies, either. They actually have done that with theme parks, but it is not an ideal situation, so I doubt it. They are giving up the rights to the games that they themselves would make, plain and simple.

Whomever is going to cough up $4B will get the kit and kabootle. You can pretty much take it to the bank!

 

[yankeessuck]

lulz, reading and people going super anti-MS acquiring WB because batman/dc will be exclusive to xbox/pc...

Meanwhile spiderman, no problem with that....

Well I would point out that Batman is in a much better position right now than Spider-man was. If I was a PS only owner I would feel worse about losing high quality Batman games than I would if I was an Xbox only owner losing Activision Spidey cash grabs.

 

[OneBadMutha]

I don't know how ATT sells the whole thing at once unless Tencent joins in. I do not believe the buyer is Microsoft if it's all or nothing. I believe Microsoft is looking for a major purchase. Would be surprised if this is it. Microsoft likes to own their IPs. Nadella has made a point of not taking a hatchet to recent Microsoft purchases and WB has a lot of baggage while not enough IP. A big publishing arm, mobile gaming, and a slew of studios who've never made anything but games for kids toys. Having the right to rent ATT's licenses doesn't sound like something in line with the Xbox strategy. They're looking to use Game Pass to build up mindshare of IP they own so they can monetize beyond gaming (see Minecraft and Halo). There's a chance that if whoever buys WB Games doesn't get the licenses extended, they lose the artists who work closely with DC Comics.

My only counter-argument to what I just said is that Microsoft feels that the mindshare boost to Game Pass offsets all the risk, waste and lack of long term IP. Kind of like how Netflix used the Disney relationship and Marvel licenses to bolster Netflix. A 10 year WB licensing arrangement allows them to bolster Game Pass and put another face on the service (Batman) until their own new IPs are established.

 

[Mcmasters]

Hmm. You know, the more I think about this stuff, I think Microsoft would be idiots to let this acqusition slip away. They'd see such an increase in GP subs and console sales almost immediately. I hope they snag em!

 

[GordoSan]

I don't know how ATT sells the whole thing at once unless Tencent joins in. I do not believe the buyer is Microsoft if it's all or nothing. I believe Microsoft is looking for a major purchase. Would be surprised if this is it. Microsoft likes to own their IPs. Nadella has made a point of not taking a hatchet to recent Microsoft purchases and WB has a lot of baggage while not enough IP. A big publishing arm, mobile gaming, and a slew of studios who've never made anything but games for kids toys. Having the right to rent ATT's licenses doesn't sound like something in line with the Xbox strategy. They're looking to use Game Pass to build up mindshare of IP they own so they can monetize beyond gaming (see Minecraft and Halo). There's a chance that if whoever buys WB Games doesn't get the licenses extended, they lose the artists who work closely with DC Comics.

My only counter-argument to what I just said is that Microsoft feels that the mindshare boost to Game Pass offsets all the risk, waste and Kind of like how Netflix used the Disney relationship and Marvel licenses to bolster Netflix. A 10 year WB licensing arrangement allows them to bolster Game Pass and put another face on the service (Batman) until their own new IPs are established.

You keep mentioning "lack of long term IP", but I've already given very clear examples of how this kind of licensing is often defined as "in perpetuity". Sony Pictures has Spider-Man in perpetuity. This is basically a legal term for [Batman] forever.

Now, I'm not saying that this is exactly what this is. We do not know the terms of the deal. What I am saying is that licensing characters "in perpetuity" is not at all unprecedented. Actually, Warner did EXACTLY this not too long ago with DC and Looney Toons characters to be used in Six Flags amusement parks. In fact, Universal has Marvel characters in their own parks in perpetuity, etc. Again, not unprecedented AT ALL. Especially when you throw out the ba-ba-Billion metric. I'm going to walk back my earlier statement of believing that they are 100% going to get everything... but for $4B, you'd better believe that if this isn't for everything, than it's for something "in perpetuity".

BTW, there are ways to split licensing deals for merchandise. Microsoft doesn't own Mega Blocks, for instance. In another instance, Marvel and Sony Pictures split the merchandise sales on Spider-Man (movie-related) toys. This kind of deal for game or movie related tie-ins happens all of the time. Sure, they now have 100% of Minecraft merch, but if they could get a piece of that WB merch too...

 

[OneBadMutha]

You keep mentioning "lack of long term IP", but I've already given very clear examples of how this kind of licensing is often defined as "in perpetuity". Sony Pictures has Spider-Man in perpetuity. This is basically a legal term for [Batman] forever.

Now, I'm not saying that this is exactly what this is. We do not know the terms of the deal. What I am saying is that licensing characters "in perpetuity" is not at all unprecedented. Actually, Warner did EXACTLY this not too long ago with DC and Looney Toons characters to be used in Six Flags amusement parks. In fact, Universal has Marvel characters in their own parks in perpetuity, etc. Again, not unprecedented AT ALL. Especially when you throw out the ba-ba-Billion metric. I'm going to walk back my earlier statement of believing that they are 100% going to get everything... but for $4B, you'd better believe that if this isn't for everything, than it's for something "in perpetuity".

BTW, there are ways to split licensing deals for merchandise. Microsoft doesn't own Mega Blocks, for instance. In another instance, Marvel and Sony Pictures split the merchandise sales on Spider-Man (movie-related) toys. This kind of deal for game or movie related tie-ins happens all of the time. Sure, they now have 100% of Minecraft merch, but if they could get a piece of that WB merch too...

You're not wrong with those examples but the problem is if you don't own the IP, you have creative limitations. Also Microsoft's strategy consists of building up their own IPs so they can be the ones selling the licenses for toys, books, etc.

Other risks buying at a publisher level: exodus of leadership and creatives. Generally when Microsoft buys Indies, they can get assurances that leadership will stay a certain amount of years and get a feel if the key creatives are on board. Most companies do that to avoid what happened with Rare all those years ago where almost every creative lead bolted when Microsoft took over and the owners retired. Microsoft had it on good assurance for example, that Fargo would delay his retirement at InXile. That Feargus, Sawyer and Parker were staying at Obsidian. That Christenson was staying at Ninja Theory. That Shaefer wasn't going to leave Double Fine. You can be left with expensive developer head count, buildings and a messy situation that requires hands on micromanagement if your leads bolt. At least if you're buying a studio with IP like they did with Rare, you have something to fall back on. IP attracts talent. Microsoft's fast expansion requires them to be hands off. They cannot be successful sending in execs to micromanage a bunch of studios at once.

It sounds sexy on paper but this reminds me of when a sports team over-spends in a free agency period to grab a big name who doesn't really fit and then have their hands tied the next 3 years with someone eating up their payroll and keeping them from filling their needs efficiently. If Microsoft comes out in 2 weeks showing all those small and medium sized Indies are now capable of putting out AAA looking games due to proper expansion, outsourcing and central support, I believe they should continue that path. Keep buying studios with good creative leads and help them expand. Playgrounds Fable team and Rare's Everwild team have mostly been assembled the past 2 years for example.

Just pointing out why I don't think it's realistic. I believe Microsoft is kicking the tires only to try grabbing some of the studios. If WB won't break them up, I don't think Microsoft is buying them. If WB is willing to sell, Rocksteady, Netherrealm or Monolith separate, they should jump all over that. Even over-pay if they can get the leads to stay. Boone has wanted to expand and do something other than fighting games. That studio and the MK license would be an amazing fit. They will be buying more studios and shopping continuously. Not getting into a messy publisher buyout should keep their hands free to jump on good deals over the course of the entire generation.

 

[GordoSan]

You're not wrong with those examples but the problem is if you don't own the IP, you have creative limitations. Also Microsoft's strategy consists of building up their own IPs so they can be the ones selling the licenses for toys, books, etc.

Other risks buying at a publisher level: exodus of leadership and creatives. Generally when Microsoft buys Indies, they can get assurances that leadership will stay a certain amount of years and get a feel if the key creatives are on board. Most companies do that to avoid what happened with Rare all those years ago where almost every creative lead bolted when Microsoft took over and the owners retired. Microsoft had it on good assurance for example, that Fargo would delay his retirement at InXile. That Feargus, Sawyer and Parker were staying at Obsidian. That Christenson was staying at Ninja Theory. That Shaefer wasn't going to leave Double Fine. You can be left with expensive developer head count, buildings and a messy situation that requires hands on micromanagement if your leads bolt. At least if you're buying a studio with IP like they did with Rare, you have something to fall back on. IP attracts talent. Microsoft's fast expansion requires them to be hands off. They cannot be successful sending in execs to micromanage a bunch of studios at once.

It sounds sexy on paper but this reminds me of when a sports team over-spends in a free agency period to grab a big name who doesn't really fit and then have their hands tied the next 3 years with someone eating up their payroll and keeping them from filling their needs efficiently. If Microsoft comes out in 2 weeks showing all those small and medium sized Indies are now capable of putting out AAA looking games due to proper expansion, outsourcing and central support, I believe they should continue that path. Keep buying studios with good creative leads and help them expand. Playgrounds Fable team and Rare's Everwild team have mostly been assembled the past 2 years for example.

Just pointing out why I don't think it's realistic. I believe Microsoft is kicking the tires only to try grabbing some of the studios. If WB won't break them up, I don't think Microsoft is buying them. If WB is willing to sell, Rocksteady, Netherrealm or Monolith separate, they should jump all over that. Even over-pay if they can get the leads to stay. Boone has wanted to expand and do something other than fighting games. That studio and the MK license would be an amazing fit. They will be buying more studios and shopping continuously. Not getting into a messy publisher buyout should keep their hands free to jump on good deals over the course of the entire generation.

Fair enough. That is definately a good argument against. Overextending is a real pitfall for any business. It seems to actually be a problem for AT&T/Warner Media already, or they wouldn't be looking into taking some weight off in the first place.

Still, everything does hinge on the specifics of the deal, IMO.

 

[OneBadMutha]

Fair enough. That is definately a good argument against. Overextending is a real pitfall for any business. It seems to actually be a problem for AT&T/Warner Media already, or they wouldn't be looking into taking some weight off in the first place.

Still, everything does hinge on the specifics of the deal, IMO.

Yeah of course. What makes a good or bad deal is the cost and stipulations.

Personally I think Netherrealms at 1 billion with the MK license included is a better fit for Microsoft than everything at 4 billion. Could see them growing another team making games in other genres within the MK universe. I could see all types of business and creative opportunities and that's one of the studios that could pay itself back quickly.

 

[yankeessuck]

Yeah of course. What makes a good or bad deal is the cost and stipulations.

Personally I think Netherrealms at 1 billion with the MK license included is a better fit for Microsoft than everything at 4 billion. Could see them growing another team making games in other genres within the MK universe. I could see all types of business and creative opportunities and that's one of the studios that could pay itself back quickly.

If they would be willing to sell NRS separately I think even Sony would be interested

The studios getting split up in some way would really be the best case scenario regardless of who got who

 

[OneBadMutha]

If they would be willing to sell NRS separately I think even Sony would be interested

The studios getting split up in some way would really be the best case scenario regardless of who got who

Agree and agree. If they split up the studios, it would open up the bidding to more buyers. It would also result in the best fit for all the studios. It's a more difficult sale but could result in the best case for all involved....including the WB employees.

 

[GordoSan]

If they would be willing to sell NRS separately I think even Sony would be interested

The studios getting split up in some way would really be the best case scenario regardless of who got who

Originally, splitting up would be better for all parties, financially.... However, there is one big downside. WB would have scattered properties, with many leashes. It makes quality control nearly impossible. This also inherently leads to a general inconsistency between their properties.

It's a complicated matter, but I can see both sides of this, honestly... But if I were WB, I'd be looking for a quality purchaser for all properties with deep pockets, first. It's just much cleaner that way. If they screw up, they can get it all back at once. Having your properties scattered around could be much more messy, and require much more legal attention.

 

[karmakid]

 

[JinCA]

Looks like they've changed their minds and won't be selling it off after all.

AT&T looks to have changed its mind about selling its gaming studios

Warner Bros. Interactive Entertainment, owner of studios such as Rocksteady, NetherRealm, and TT Games, is seemingly no…

www.eurogamer.net

 

[pravus]

Well if they aren't getting ready to sell, they certainly are getting lean for some other reason.

 

[JinCA]

Well if they aren't getting ready to sell, they certainly are getting lean for some other reason.

They let go of a ton of DC employees it sounds like.

Was just reading about the effort to sell the gaming division, it seems like even the MK IP wasn't going to go with NRS, they wanted to sell the studios and then include exclusive licensing deals with whoever bought the studios. So basically not only would the buyer have a specified amount of time with the exclusive rights to whatever franchises they could but they wouldn't own anything. It would also mean over time that the buyer would have to renew those deals and pay fees to keep franchises they've been building/investing in going.

 

[mb1025]

Well if they aren't getting ready to sell, they certainly are getting lean for some other reason.

Because they couldn’t sell this is now the outcome of it.

 

[Spiritech]

They let go of a ton of DC employees it sounds like.

Was just reading about the effort to sell the gaming division, it seems like even the MK IP wasn't going to go with NRS, they wanted to sell the studios and then include exclusive licensing deals with whoever bought the studios. So basically not only would the buyer have a specified amount of time with the exclusive rights to whatever franchises they could but they wouldn't own anything. It would also mean over time that the buyer would have to renew those deals and pay fees to keep franchises they've just invested in going.

Yea only an idiot would have gone for that. Guess you gotta try though.