Warner Bros. gaming division reportedly to be broken up in AT&T, Discovery merger

This could change a lot for Mortal Kombat and other WB gaming properties.

Image via Warner Bros.

AT&T is officially backing off on portions of its previously acquired Time Warner assets in a new merger deal with Discovery, which will result in a new company led by Discovery CEO David Zaslav.

In the $43 billion deal, WarnerMedia and Discovery combined their assets into one entertainment entity, which aims to rival the likes of Disney with the intellectual properties and content offerings on its services. While most people are focused on HBO Max, Discovery+, and the streaming or film-centric portions of the merger, there are significant implications for the Warner Bros. gaming division. 

Notably, this new company that will be created will at least partially own DC Comics and the rights to all of its IP, including the likes of Batman, Superman, and much more. According to IGN, however, only portions of Warner Bros. Interactive Entertainment and other Warner Bros. games assets will be sold off or included as part of the deal. 

Warner Bros. Interactive is made up of 11 different game studios, like Monolith Productions and NetherRealm Studios, which have worked on internal WB properties like Lord of the Rings and the Batman Arkham series, along with the Mortal Kombat developers at NetherRealm Studios. 

AT&T reportedly wanted to sell off parts of its gaming division last June while searching for ways to part with non-core assets to offload debt. Those sale talks reportedly ended last September. We don’t know which studios will be sold, which will fall under the new company, or what AT&T will keep directly, if any, and likely won’t know until full details of the merger are shared in the future. 

Because this is a merger and not an acquisition, Discovery essentially bought in to co-own many valuable IP and put itself in a competitive position in the streaming wars. It also allows AT&T to move off of some of its nearly $200 billion debt.