Netflix’s Warner Bros deal and what it means for Hogwarts Legacy and Mortal Kombat

13 December 2025
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12 min.
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Netflix’s Warner Bros deal and what it means for Hogwarts Legacy and Mortal Kombat

Summary:

Netflix is moving to take control of Warner Bros Discovery’s studio and streaming business in a deal worth tens of billions of dollars, and tucked inside that package sits Warner Bros Games, the label behind Hogwarts Legacy, Mortal Kombat and a stack of other big names. On paper that sounds huge for players, yet Netflix co-CEO Gregory Peters has told investors that the company did not assign specific value to the games division when it built its financial model for the takeover. That sounds brutal at first glance, especially when Hogwarts Legacy has already sold well over 30 million copies and Mortal Kombat continues to perform strongly around the world. At the same time, Peters stresses that Netflix is excited about those projects and sees a clear opportunity to pull them into its wider plans.

For players, studios and anyone who cares about big licensed games, that mix of indifference in the spreadsheets and enthusiasm in the sales pitch raises a lot of questions. If games are treated as “relatively minor” in the deal, will the new owner protect these studios or trim them down if costs rise Somewhere between those two extremes sits the likeliest outcome, with Netflix looking for ways to use Hogwarts, DC and other worlds across shows, films and interactive projects while still keeping investors happy. In the sections below, we walk through what Warner Bros Games actually includes, why Netflix might talk this way in front of investors, how rival bids from groups like Paramount Skydance complicate things, and what all of this could mean for future trips to Hogwarts, Outworld and Gotham for years to come.

Netflix’s Warner Bros deal and where games fit in

To understand why people are talking so much about Warner Bros Games right now, you first have to look at the scale of the overall deal. In early December 2025, Netflix agreed to buy Warner Bros Discovery’s studio and streaming business in a transaction valued at roughly 72 billion dollars, pulling in labels like HBO, DC Studios and the main Warner Bros film operation. That is the kind of move that reshapes the map for streaming and theatrical releases, which is why regulators, unions and rival companies are all lining up to weigh in. Tucked into this package is the games division that owns and operates studios such as Rocksteady, NetherRealm, Avalanche and TT Games, the teams behind the Arkham series, Mortal Kombat, Hogwarts Legacy and various LEGO titles. For Netflix, which started life as a DVD mailer and then became the dominant subscription service for films and shows, adding such a large creative machine is a huge leap. Yet on recent investor calls, leaders have been very clear that the financial model for the takeover was built primarily around film and television, not around games, even though those teams ride along in the same bundle.

What Warner Bros Games currently includes

Warner Bros Games is not a small side label tucked in a corner of the company, it is a network of well known studios and globally recognised series. Avalanche Software is fresh from the success of Hogwarts Legacy, an open world role playing adventure that lets players live out their wizarding school fantasies in the late 1800s and has passed 30 million copies sold across platforms. NetherRealm Studios continues to release new entries and updates for Mortal Kombat, one of the most famous fighting series in the world, with a loyal competitive community and strong sales every generation. Rocksteady Studios built its name on the Batman Arkham games, which helped prove that licensed superhero projects could stand alongside the best action games in the industry. TT Games has long been trusted with family friendly LEGO projects, many of them tied to Warner owned brands as well as partners. On top of that, Warner Bros Games publishes projects from external teams and experiments with other parts of its catalogue, from DC heroes to Game of Thrones. All of that now sits on the path to Netflix, assuming the deal clears regulators and no rival offer steals the prize at the last moment.

Why Netflix calls the games business relatively minor

The part that has grabbed headlines is not that Netflix is inheriting this line up, but how little weight it claims to give those studios in its financial planning. Co CEO Gregory Peters has told investors that while Warner Bros has done impressive work in games, especially with projects like Hogwarts Legacy, the division is considered relatively minor next to the rest of the deal. He has also said that Netflix did not actually build any value from the games business into the core model behind its multi billion dollar offer. In plain language, that means the streaming giant believes the takeover already works purely on the strength of shows, films and the broader studio infrastructure, even if the games group ended up underperforming. There are a few reasons why executives might talk this way. One is simply to show discipline to investors who worry about overpaying for trendy assets. Another is to keep expectations low around an area where Netflix is still learning, which makes any future upside easier to present as a bonus. It might also reflect the reality that, compared with the cash flows from HBO series or large theatrical films, even a hit game is still just one of many pieces in a much larger financial puzzle.

Hogwarts Legacy, Mortal Kombat and the real value of these series

When you zoom in from corporate spreadsheets to the games themselves, however, it becomes hard to see them as minor. Hogwarts Legacy pulled in more than 30 million sales and drove huge conversation across social media, streaming platforms and fan communities, all while keeping the Wizarding World brand in the spotlight between film projects. Mortal Kombat continues to perform strongly with each new entry, combining cinematic story modes with a committed competitive scene and regular downloadable characters that keep players engaged. Both series can spin off into merchandise, live events and themed attractions, often for years after launch. From a brand perspective, they are also powerful proof points that Warner Bros can turn its famous worlds into games that people actually enjoy, which is not as easy as it sounds. Measured this way, it is fair for players and developers to feel that the public messaging from Netflix underplays the real cultural and commercial weight of the games division. At the same time, the lack of explicit valuation in the deal model does not automatically mean that leadership sees no future for these projects. It can also mean they regard any success that comes from integrating Hogwarts Legacy, Mortal Kombat or the Arkham formula with their streaming empire as a pleasant upside rather than a pillar they are forced to chase at all costs.

What Gregory Peters’ comments signal for the studios

So what do Peters’ remarks actually suggest for the people inside those studios When he says Warner Bros Games is “relatively minor” in the grand scheme and that no value was assigned in the model, the main message is aimed at shareholders rather than designers and programmers. He wants to assure investors that the company did not get carried away by hype around Hogwarts Legacy or by fear of missing out on gaming, especially with rival bidders like Paramount Skydance circling Warner Bros with even larger offers. At the same time, Peters has gone out of his way to praise the quality of the teams and to say that Netflix is genuinely excited to explore how Hogwarts, DC and other properties can be woven into what it already offers. In corporate speech, that combination usually means leadership does not want to be locked into specific growth promises around a new area, but also wants the flexibility to invest more if early experiments go well. For the studios, that probably translates into a period of uncertainty while the deal closes, followed by a phase where they are encouraged to pitch crossover ideas that tie into Netflix shows and movies.

How Netflix’s existing gaming plans line up with Warner Bros strengths

Netflix has not been sitting still in games over the last few years, even if its efforts have not yet produced a giant hit that everyone talks about. It has built a library of mobile titles tied to shows like Stranger Things, acquired smaller studios and experimented with cloud streaming technology in a few regions. The company has made clear that it sees interactive projects as a way to keep subscribers engaged between seasons and to offer extra reasons for people to stay in its ecosystem. When you compare that approach with what Warner Bros Games already does, you can start to see some interesting overlaps. Hogwarts Legacy is a classic example of a big single purchase game that extends the life of a film and book franchise, while the Arkham series and various DC projects show how superhero stories can thrive in an interactive format. Under Netflix, you could easily imagine more projects that are built side by side with new shows, or even smaller spin offs that arrive directly within the Netflix app. The challenge will be balancing that experimentation with the depth and polish players expect from these brands, rather than drifting into shallow tie ins that exist mainly to support marketing beats.

Potential upside for players and subscribers if things go right

From a hopeful point of view, there are several ways this situation could turn into a win for players. One obvious upside is stability. A successful subscription business with a massive audience can give studios room to plan long projects, knowing there is a broad platform waiting at the end. If Netflix chooses to keep Warner Bros Games largely intact and simply plugs it into its own distribution channels, we might see more projects that have time to breathe instead of being rushed to fill gaps in a film slate. Another potential benefit is flexibility in how you access games. Imagine being able to sample a Hogwarts spin off or a smaller Mortal Kombat experience directly from the Netflix app on your television or mobile device before deciding whether you want a full release on dedicated hardware. Cross promotion between shows, films and games could also lead to more varied stories, with side characters getting their own interactive moments rather than being stuck in the background. None of that is guaranteed, of course, but the combination of strong intellectual property and a platform hungry for reasons to keep subscribers engaged sets the stage for creative experiments that would have been harder to greenlight in a more traditional studio environment.

Risks and worries for studios and staff

Alongside the potential, there are very real fears around what happens when a giant streaming company decides that a games division is not central to its valuation. When a business line is described as minor inside a deal of this size, it can become an easy target if cost cutting ever rises to the top of the agenda. Developers have watched similar stories play out across the industry in recent years, with talented teams closed or downsized shortly after mergers when financial goals are not met quickly enough. Commentators have already raised concerns that, if a rival bid like Paramount Skydance wins the tug of war for Warner Bros, some studios might face restructuring or even closure. Even if Netflix ultimately prevails, staff may worry that corporate priorities will tilt heavily toward projects that can be tied directly to subscriber growth, leaving more experimental ideas out in the cold. For players, that could mean fewer risks, more focus on safe sequels and an even tighter link between what happens in games and what happens in shows and films. It is understandable that people who love these series are nervous, even as they try to stay optimistic about the possibilities.

Rival bids, regulation and what comes next for Warner Bros Games

Complicating everything is the fact that Netflix is not the only company interested in Warner Bros Discovery. Shortly after the Netflix deal was announced, Paramount Skydance launched a hostile offer worth more than 100 billion dollars that aims to buy the entire company, including cable networks and other assets Netflix is not touching. That move has turned what was already a huge story into a full blown bidding war, with Warner’s board and shareholders having to decide which mix of price, structure and regulatory risk feels most attractive. For Warner Bros Games, that means the identity of the future owner is still not set in stone. If Netflix’s plan wins out, the division becomes part of a company that sees games as a supporting piece in a larger streaming puzzle. If Paramount Skydance or another bidder takes control, the strategy could look quite different, possibly leaning more on traditional film and television thinking or on their own plans for interactive projects. On top of that, regulators in the United States and Europe will have plenty to say about whether any of these deals should be allowed in the first place, given how much market power the combined companies would hold. Until those decisions are made, studios, staff and players are left watching from the sidelines.

What this moment tells us about the future of media and gaming

Regardless of which bidder eventually wins, the way games are being treated in this saga says a lot about where the wider industry is heading. On one hand, we have a streaming giant that is willing to spend more than 70 billion dollars on studios and rights but publicly describes a successful games division as a minor part of the package. On the other hand, we see players, developers and many commentators instinctively treating Hogwarts Legacy, Mortal Kombat and the Arkham series as central pillars of Warner’s creative identity. That gap between how spreadsheets classify value and how fans experience it is not new, but it feels especially sharp here. It suggests a future where games are increasingly tied to huge media ecosystems, yet still have to fight for respect inside boardrooms compared with long running shows or film franchises. For anyone who cares about interactive projects, the takeaway is clear. The worlds we love are going to be shaped more and more by mega deals, cross platform strategies and investor calls, not just by what happens inside a single studio. Staying informed, supporting projects that take creative risks and speaking up when decisions feel harmful will matter more than ever as this story unfolds.

Conclusion

Netflix’s move to buy Warner Bros Discovery’s studio and streaming business is one of those moments that will be studied for years, and Warner Bros Games sits right in the middle of it. On paper, the division is treated as a minor add on in a deal driven by HBO series, DC films and a huge back catalogue of shows and movies. In reality, it contains some of the most recognisable interactive worlds in entertainment, from Hogwarts classrooms to Mortal Kombat arenas and Batman’s Gotham. Gregory Peters’ comments about assigning no value in the deal model may sound harsh, but they mostly reveal how cautious Netflix wants to appear in front of investors rather than a secret desire to shut everything down. For players and developers, the coming years will likely bring a mix of experimentation, crossovers and uncomfortable uncertainty as ownership questions are settled and new strategies are tested. The best case scenario is a future where these studios get the backing they need to build bold projects that make the most of Netflix’s reach. The worst case is another round of cost cutting that treats beloved series as expendable. Right now, all we can do is watch the bidding, read between the lines of executive statements and keep hoping that the magic of Hogwarts and the brutal charm of Mortal Kombat are given room to grow under whichever flag ends up flying above the studio gates.

FAQs
  • Why did Netflix say it gave no value to Warner Bros Games in the deal
    • Netflix’s leaders told investors that the financial model behind the takeover already worked based on film and television alone, so they did not assign extra value specifically to the games division. That framing helps them appear disciplined on price and avoids promising aggressive growth targets in an area where they are still building experience, even though they have praised the quality of Hogwarts Legacy, Mortal Kombat and the teams behind them.
  • Does this mean Netflix is not interested in games at all
    • No, the company has repeatedly said it sees opportunity in Warner Bros Games and is excited about how those projects can fit into its wider plans. Netflix has already invested in smaller studios and mobile titles, and it views interactive projects as a way to keep subscribers engaged. The lack of explicit valuation in the deal model is more about financial presentation than a lack of interest in the medium itself.
  • What could change for Hogwarts Legacy and future games in that series
    • If the deal closes with Netflix as the owner, future Hogwarts projects are likely to be planned with a closer eye on how they support shows, films and other experiences based on the Wizarding World. That could mean more cross promotion, potential experiments with cloud streaming and possibly new types of spin offs. The core appeal of exploring Hogwarts as a player is unlikely to disappear, but timelines, budgets and platforms could shift as new strategies roll out.
  • Should fans of Mortal Kombat and the Arkham series be worried about studio closures
    • There is understandable anxiety whenever a major merger takes place, especially when executives describe a division as minor. So far, Netflix has not announced any plans to close specific studios, and it has praised the talent inside Warner Bros Games. That said, both Netflix and potential rival bidders will face pressure to keep costs under control, so fans and staff will be watching closely for signs of restructuring once ownership questions are settled.
  • How do rival bids like Paramount Skydance’s offer affect the future of Warner Bros Games
    • Paramount Skydance’s hostile bid to buy all of Warner Bros Discovery has turned the situation into a true bidding war. If that offer were to succeed, the games division could end up inside a very different corporate structure with its own priorities and strategies. Until a final decision is made and regulators rule on any deal, studios and players are stuck in limbo, unsure whether their future will be shaped by Netflix, Paramount Skydance or another unexpected player.
Sources
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