To what extent should gaming be part of a legacy media company's overall growth efforts -- as a shadow of sorts of their higher-profile efforts around streaming?
This question is at the forefront as Warner Bros. Discovery posts a strong, out-of-the-box effort for its Hogwarts Legacy new video game.
Since its February 10 launch, the game wiz-ed up $850 million in sales for Warner Bros. Games -- the biggest global launch in the company's history. Hogwarts Legacy is now among some of the fastest-selling video games ever.
For years, media companies have toyed with the effort to build business. But mostly ceded big efforts to the major video game publishers --Activision Blizzard, Nintendo, Electronic Arts, Take-Two Interactive, and others.
In part the effort around video gaming was to be a hedge in seeking the next generation of young consumers/viewers/users to get into its entertainment universe. This is something the likes of Disney has done for years -- not just with gaming, but with its theme parks.
Then premium streaming came along and quickly media companies realized their older skewing linear TV businesses would almost instantly get young viewers when airing the same TV episode on streaming platforms.
Viola! Legacy TV-based media companies now had a way out of criticisms; they were doing nothing to capture the next generation of video consumers/users. Trouble is streaming platforms continue to look to need lots of capital expenditure for growth in terms of new TV and movie production. Mind you, costs can be high to develop or acquire new video games.
During these years and through the pandemic -- video game revenues continue to climb. Coupled with all of these was the ability of video game consoles to access CTV and other video platforms for their young consumers. Again, a great match to grab young user reach.
The rub, of course, comes not just in gaining revenues from paid video game subscriptions but companies being able to leverage their massive and experienced advertising sales infrastructure against all new media platforms.
Video games can be difficult in that regard, as young consumers need game owners to bow to the sanctity of the game: That means no interruption; no word from “our sponsors.”
Many have tried to find a lighter touch way of offering special deals to users when it comes to pre-roll messaging, sensitive to all video game users needs.
The question for Warner Bros. Discovery as it gets out from under the merger and restructuring financial issues can they make video games a bigger deal?
Or will they -- like a video game loser in a bit of frustration -- just throw down the controller?