Warner Bros. Games Restructures Amid $600M in Write‑Downs

• Warner Bros. Games restructures around key IPs after $600M in write-downs and studio closures.

• New divisions formed for Harry Potter, Game of Thrones, Mortal Kombat, and DC titles.

• Leadership shifts aim to boost franchise accountability with a decentralized development and support model.

Warner Bros. Games is shaking up its internal structure after taking close to $600 million in write-downs tied to its gaming unit. Announced on June 17, 2025, the company said it’s reorganizing around its biggest franchises, forming three new divisions that’ll each handle one or more of its top IPs.

The structural shift aligns Warner Bros. Games more closely with its most valuable franchises. Yves Lachance, formerly of WB Games Montréal, is now Senior Vice President for all Harry Potter and Game of Thrones titles. Shaun Himmerick of NetherRealm Studios has taken charge of the Mortal Kombat and DC Universe portfolio. Steven Flenory, previously with WB Games New York, will lead shared services, including tech, QA, publishing, and customer support. All three report to JB Perrette, President of Global Streaming & Games.

Lachance and Himmerick will oversee development, production, and tech teams tied directly to their assigned IPs. This is to reinforce a decentralized model based on franchise accountability. Flenory’s group retains central infrastructure responsibilities. Publishing remains under Perrette.

The shake-up comes amid ongoing financial strain. Public filings show a 48% year-over-year decline in games revenue in Q1 2025. Despite Mortal Kombat 1 selling over 5 million units, it missed internal expectations, sparking concerns about the company’s content strategy and product-market fit. In Q3 2024, Warner Bros. Discovery recorded $100 million in impairments tied to MultiVersus and Quidditch Champions, and a $200 million charge linked to Suicide Squad: Kill the Justice League. Across 2024, total reported gaming-related losses approached $300 million.

This realignment follows earlier cost-cutting measures. In February 2025, Warner Bros. Discovery shuttered Monolith Productions, Player First Games, and WB Games San Diego, and cancelled the Wonder Woman game, which was already under development. The company stressed that these closures aimed to refocus resources on higher-return franchises, and no additional layoffs or studio closures occurred in this latest reorganization.

The leadership transition however began in January 2025, when David Haddad stepped down after a twelve-year tenure. He had overseen major successes like Hogwarts Legacy and more recent misfires. His departure was described as a proactive move ahead of a lighter release calendar and broader strategic shift.

This restructuring also supports the larger Warner Bros. Discovery corporate split, approved by bondholders on June 16, 2025. Under that plan, Warner Bros. Games and HBO Max will be grouped into a new “Streaming & Studios” entity, separate from traditional cable operations by mid-2026. Debt covenants were amended to enable a significant buyback and capital structure realignment ahead of the spinoff.

Since the reorg began, Warner Bros. Games has released Mortal Kombat 1: Definitive Edition, launched the mobile RPG DC World Collide, and ported Hogwarts Legacy to the Nintendo Switch 2 on June 5. These are the first releases under the new setup, so how they perform will help show if the strategy is on track.

Looking ahead, investors will track how efficiently sequels and updates are delivered by each division. The narrower franchise scope and new leadership will be central to whether Warner Bros. Games can regain stability and relevance in a volatile games market.