Warner Bros. Discovery's failed Suicide Squad game highlights industry problems

Warner Bros. Discovery (NASDAQ:WBD) recent loss of $200 million due to poor performance of its Suicide Squad: Kill the Justice League The video game is the latest sign of trouble for the beleaguered video game industry.

During WBD's earnings conference call, chief financial officer Gunnar Wiedenfels called The game's launch was “disappointing” and he blamed it for the more than $400 million year-over-year decline in first-quarter revenue for its studio segment.

The game, widely criticized among critics and playersalso significantly underperformed last year's best-selling product, hogwarts legacy, added CEO David Zaslav.

Developed by Rocksteady Studios, suicide squad It was released in early February to negative critical reception and low player counts on the video game distribution platform Steam.

According steam graphics, the game has averaged 204 players in the last 30 days. Player numbers peaked at over 13,000 at launch.

On the contrary, Sony (SONY) helldivers 2 has averaged 115,000 players over the last 30 days, with over 458,000 peak players in February.

difficult year ahead

The first months of 2024 have been quite dry for major video game releases, and the rest of the year isn't looking much better.

Nintendo (OTCPK:NTDOY) said earlier this month that it will unveil the successor to its Switch console sometime before the end of the fiscal year, as the company forecast a sharp drop in profits amid the decline in Switch sales. Nintendo's fiscal year ends in March 2025.

Media reports in February said the Japanese entertainment and gaming giant was delaying the new console until next year.

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However, the game may not be released until late 2025 or 2026 as production has fallen behind schedule, the report added.

Electronic Arts' (EA) fourth-quarter profits and sales fell year-over-year as the video game developer failed to release any major titles.

According to research firm Circana, total U.S. video game sales in March grew just 4% to $4.89 billion, while hardware sales fell 32%. Mobile spending accounted for 89% of the growth.

So far this year through March, U.S. video game sales rose 6% to $14.67 billion, and hardware sales fell 24%.

“Total US video game spending increased 6% in the first quarter of 2024 despite a 24% drop in hardware spending and *looks at everything else* shows how diversification has made the market be more resilient. I still maintain my -2% forecast for 2024, for now, but there is a clear path to annual growth,” said Circana analyst Mat Piscatella in a twitter.com/MatPiscatella/status/1785676696466997699″ target=”_blank”>mail on x (formerly twitter).

Even though video game sales have held up, it has been a difficult year for people who create video games.

In January, Tencent's (OTCPK:TCEHY) (OTCPK:TCTZF) Riot Games announced it would be laying off 11% of its workforce. Unity (U) also announced a 25% reduction in its workforce, while amazon's (AMZN) live streaming site Twitch announced plans to cut about 35% of its workforce.

Last month, Take-Two (TTWO) said it would reduce its workforce by about 5%. Microsoft (MSFT) is reportedly closing four video game studios under its Bethesda banner. The news follows Microsoft's announcement earlier this year that it was eliminating about 1,900 positions from its video game workforce.