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Warner Bros. was one of the Hollywood studios that saw a long time ago that video games could be a source of primary revenue, not ancillary revenue related to movie or TV properties.
And Warner Bros. Interactive Entertainment is reaping the fruits of that vision today. The company has 10 internally owned studios across the U.S. and Europe, and it has had big hits this year with Mortal Kombat 11, a triple-A game, and the ongoing mobile hits Game of Thrones: Conquest and Golf Clash.
WBIE has some big games coming, like Harry Potter: Wizards Unite, and it is distributing Cyberpunk 2077 for publisher-developer CD Projekt Red. Both of those titles have powerhouse brands behind them, with the force of J.K. Rowling’s Harry Potter franchise as well actor Keanu Reeves, who will appear in Cyberpunk 2077. And Lego Star Wars: The Skywalker Saga is coming in 2020.
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I talked with Haddad about those titles, as well as trending topics like the growing realism of games, cloud gaming, the new consoles, and WBIE’s ongoing support for E3.
Here’s an edited transcript of our interview.
GamesBeat: How do you feel about the consoles right now? It seems like it’s a good thing that they’re not all going to come in on top of each other. We might get, at the most, two in one year. But doesn’t sound like Nintendo is ready to do anything soon. It sounds like there will be a staggered schedule for when these things will appear.
David Haddad: I like that there’s clarity, at least from two of our partners. They believe there’s another generation of high-definition gaming on a console. That’s a big foundation of getting Warner Bros. into this business. It’s certainly changed from when we entered the business, but we still believe — for our fans, with some of our biggest franchises, with some of our great studios — that building must-have premium content for a great gaming experience in the home in high definition is still a great business. We’re excited about that.
GamesBeat: It seems like a good thing that the consoles will be similar enough again because they’re using AMD chips. It’s a good development environment.
Haddad: We have tools and tech that are essential to succeeding and having high-quality games in this space. Having a good line of sight on what it will take to make great games is important.
GamesBeat: As far as your lineup is concerned, how do you feel about this year relative to past years?
Haddad: It’s going to be a good year for us. It’s a great year for us so far. The two primary engines are–first, Mortal Kombat. It was the largest launch in franchise history. NetherRealm has been delighting fans for 27 years. The fact that this was the largest launch in history is a testament to both the studio and our ability to create a lot of excitement around this. In two weeks–here at the show we’re announcing a new character coming with this, which is a key way we keep fans engaged in Mortal Kombat. We’ll continue that this year and through next year. That starts on the 27th.
Our mobile portfolio, also, is doing remarkably well. We’re moving into the top 10 grossing publishers in the United States, driven by a couple of key games in our portfolio. Golf Clash has moved into its third calendar year and continues to be meaningful and growing. Game of Thrones Conquest, from our Boston studio, is on a remarkable growth track, partially because we activated around the season. There’s so much excitement around the IP. That studio is doing a fantastic job of building features and roadmaps to keep a growing audience happy. Those, along with Mortal Kombat, and Justice in our portfolio–we’re having a very strong year in our mobile publishing.
GamesBeat: It still feels like Game of Thrones is an underserved property in games.
Haddad: Our partners at HBO were very disciplined about how they chose to go to the market. We’re finding an enormous appetite for this. The game continues to grow. Frankly, we think that appetite is also growing. There’s a lot of fandom out there, for sure.
GamesBeat: You could do a different ending for your mobile fans.
Haddad: [laughs] I’m not gonna comment on the show. You always try to get me to be a showrunner, and I won’t do that.
GamesBeat: Do you think more books coming will help the game, whatever happens in that department?
Haddad: It’s a very rich environment with a lot to turn to. I’m sure we’ll have a lot of ways to keep that live game relevant for the fanbase.
GamesBeat: It looks like the timing will be great for Star Wars, too, with the movie coming.
Haddad: Right. We’ve announced the game for next year, but if you’ve seen it, it’s a very ambitious game. TT and the studio are not only bringing, for the first time, all nine movies together in a definitive offering of characters and vehicles and environments and worlds, but also a new foundation of technology to bring different game design, stronger game design, more player agency and autonomy, and very improved visual representation in that game. All of that together represents one of our most ambitious efforts in the Lego business, which has been a foundation of our business for a long time.
GamesBeat: You’re still strongly supporting E3, while a lot of other big companies aren’t. Do you wish everybody would still participate here?
Haddad: We still find enormous value in E3. As an industry, when we all come together, we’ve consistently proven that more press, more influencers, more engagement, more tweets, more views, more fandom, even in a distributed way–more people are watching what we do, paying attention to what we do. That’s an amazing environment to be able to talk about our games, launch games, and talk about our live games. We still value that.
I’m a strong believer that we do that because we’re the industry at large. Warner Bros. has a board seat at the ESA, and as I sit on that board seat, I encourage all publishers to keep that in mind, because we really are better together when we’re creating an industry event.
There was news at the show about new platforms, new entrants, and new technology. But I also think that what our listening, social listening is doing–this show is still about games. It’s still about the biggest games. It’s a reminder to all of us, and as a publisher, we’re heartened by that. It’s fundamentally what we do. What’s getting talked about the most are the games that people are most excited about. We’re thrilled that one of those is Cyberpunk, but there are others out here. It’s a reminder that that’s really what gamers spend their time thinking about.
GamesBeat: Does it make you wonder if the show still needs some changes? Or do you feel like it still has a nice formula?
Haddad: I think everything, every industry, should be tuning and optimizing all things. There are chances for improvement around that. I think our industry, whether it is influencers or whether it is fans that really do want hands-on and will travel, as well as important partners that want to hear about games and play games–I think tuning all of that will continue to make sense for us.
GamesBeat: As far as Cyberpunk goes, how did you guys get involved with that?
Haddad: We’ve been associated with CD Projekt for a very long time, back to the first Witcher. We have a long relationship with them. While we’re not publishing this game — they’re publishing the game — we’re helping them with the distribution. We couldn’t be more pleased and proud to be associated with them, to support them in key territories, to make this what we believe is going to be one of the biggest games of next year. It comes with a very long history of involvement and engagement with that team.
GamesBeat: It gets into an interesting realm where there are very few games like this. You have Grand Theft Auto V, Red Dead Redemption 2. The ambition behind that game feels very similar.
Haddad: And a lot of anticipation. Gamers have long been tuned into both this studio and this game is on the radar. What I’m feeling from the show — and again, we’re pleased that they’re part of our booth, as we help them show this game — the fan excitement and energy around this couldn’t be higher. Just look at the line. Credit to that team and that studio for what they’ve built.
GamesBeat: It feels like one of these titles that don’t show up every year. Maybe once every five to seven years you see something big that blows everything else out of the water.
Haddad: In the rest of our portfolio, we have a lot of work going on at studios we’re not talking about. But our general mindset is very similar. Outside of the Lego business, where we regularly ship new games each year, we don’t have an annualized strategy. The last Mortal Kombat came in 2015. It took this long for the team to think about what innovations and what gameplay additions and what mix of characters would delight gamers. It took that long to build it. We have conviction, for us, that that’s the best way to handle our fans, our franchises, and our studios.
GamesBeat: How do you feel about what some of the next-generation titles should be like?
Haddad: There’s more power, more capacity. Load times will be better. Our devs are excited. I don’t know how much else I can say, but that’s a great starting point. What is this, generation nine that we’re in? There’s a pattern of consoles innovating with the tools for game creators to build better experiences. I think this next generation will be the same.
GamesBeat: I got a look at Call of Duty, and I wasn’t too happy with some lines that I think they crossed, going from fantasy to realism, to more graphic violence and more controversial subject matter. Targeting women and children in the game. It almost feels like if we go to this kind of realism in the next generation of consoles, there are things I would worry about. It’s now a technology that has to be used responsibly. This game, this year, is a red flag for me, and I think of what the consoles could do in the next generation.
Haddad: We have one of the largest and fastest-growing forms of entertainment. I think the people creating that content have to weigh that thinking. There is a responsibility there, which I think is your key point. I wouldn’t disagree with that at all. As our industry grows in influence as far as what’s getting consumed, as we’re no longer touching millions of gamers but billions across a variety of devices, It’s imperative that we think through these topics.
GamesBeat: The definition of “mature” is going to change.
Haddad: As an industry we’re fortunate to have an independent body that helps us with that in the ESRB. Our industry stepped up some time ago, and it’s remained committed to that and its independence and the rigor that goes into the rating process. Ensuring compliance is incredibly important. I’m comforted that we’re organized in a way that we can continue to have that form of independent review.
GamesBeat: Was the reaction to Wizards Unite pretty good?
Haddad: Thanks for joining the first look. We feel like we got a great response out of the first look. There’s more to come on that. It’s a very ambitious game, as you know. It’s coming soon. Our partners at Niantic have been great at continuing to advance this category of augmented reality and that type of gameplay. We think it’s a perfect fit with Harry Potter, where that line between the real world and the wizarding world is always paper-thin. From a conceit point of view, we think this is a very powerful game to be putting into the market.
GamesBeat: It’s nice to see AR pushing forward. Does VR feel like it’s still in a different stage, an experimental stage?
Haddad: I’d say it’s still interesting. We have some R&D going on. It’s an interesting space. It’s not a fully commercialized category of gaming yet, but a lot of innovation is going into it. A lot of creators are curious about the space. I believe those will be the conditions that will shape a business out of it.
GamesBeat: I have a great idea for you guys on Lego: Lego blockchain. Is that funny?
Haddad: Am I allowed to comment? No. But that is funny.
GamesBeat: There are still people in the corner talking about blockchain. They aren’t all the people in the room yet, but a few people are convinced that blockchain and games are going to happen.
Haddad: Yeah, that there’s an intersection there. There’s no shortage of powerful innovation influences in our business, whether it’s more computing power, advances in AR, advances in VR, advances in tools and technology, advances like blockchain. It speaks to why the industry continues to grow so robustly. It has so much opportunity to innovate and delight the fans, so much opportunity to expand. Whether it’s advancing business models or tools to make different kinds of content than what’s been experienced before, it’s why we believe it’s a great time to be in games.
GamesBeat: Have you announced any Stadia projects yet?
Haddad: Mortal Kombat 11 will be coming to Stadia.
GamesBeat: How do you feel about the cloud in general?
Haddad: Like I just said, I think it’s one of those advances and innovations that’s going to drive the market. I personally believe that over time it will be expansionary. I hold that same thesis. As the other platforms are moving into this space, it’s exciting to take even more barriers out of that high-definition console gaming experience across multitudes of screens, giving gamers options. We’re excited by that.
I think it will be a ramp to get there. I do believe in the next generation of consoles for the home. But I believe we’ll be growing both categories.
GamesBeat: As far as triple-A games, do you think that they will be the ones that will grow the most because of the cloud platforms?
Haddad: They’re probably the best-suited right now for the cloud as we know it today, or certainly as I know it today. They seem the best-suited for that kind of experience.
GamesBeat: What about subscriptions in general? Do you think that will be difficult to sell to consumers, especially if there are too many subscription options?
Haddad: Our observation is that oftentimes it is written that streaming automatically brings subscription, because that’s what happened in other forms of media, other forms of content. I think they’re actually two different topics. I don’t believe that it will automatically come together. I do think that we’ve proven that a transactional business, as we call it, where you pay a premium price for an experience, where gamers can have 30, 40, 100 hours of play–they’ll pay a premium price for that. That’s great for us. We have a history of that transactional business.
There are gamers that want to consume way more than two or three games a year, which is sort of an average right now. There may be people that like the consumption pattern of having a subscription so that they can try more games and play more games. But the behavior today is actually fairly concentrated on players spending most of their time in a handful of games that they carefully pick and that are able to secure a premium price in the market. I think it’ll be a mixture of both.
I’d be careful about the notion that streaming will automatically bring the entire business to a subscription model. I just think there’s a lot of differences compared to other forms of media.
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