Netflix has revealed a $82.7 billion deal to acquire Warner Bros.' Streaming & Studios division, which includes Warner Bros. Games and its prominent studios behind titles like Mortal Kombat and Hogwarts Legacy. The acquisition, announced on December 5, 2025, is expected to close in 12-18 months pending regulatory approvals. This move brings major gaming IPs such as Batman: Arkham and Lego series under Netflix's umbrella amid the streamer's mixed history in gaming.
Deal Overview
Netflix's co-CEOs Ted Sarandos and Greg Peters announced the $82.7 billion cash-and-stock deal (including debt) during a conference call on December 5, 2025. The acquisition targets Warner Bros. Discovery's Streaming & Studios segment, following its planned split from Global Networks, and encompasses film, TV, and gaming assets. Warner Bros. Games, a key component, features studios like Rocksteady (Batman: Arkham series), NetherRealm (Mortal Kombat), Avalanche Software (Hogwarts Legacy), and TT Games (Lego titles). Sarandos stated, "Our mission has always been to entertain the world," emphasizing the merger's potential to blend Warner Bros.' library with Netflix originals like Stranger Things.
Impact on Gaming
Warner Bros. Games has faced challenges, including a 48% revenue drop earlier in 2025 due to no major releases, the flop of Suicide Squad: Kill the Justice League (a $200 million loss), layoffs at Rocksteady, and cancellations like Monolith Productions' Wonder Woman game and a Hogwarts Legacy expansion. Leadership changes saw publishing head David Haddad fired after over a decade. Current projects include Hogwarts Legacy sequel (following 30 million+ sales as 2023's top game), a potential new Arkham title from Rocksteady, next Mortal Kombat or Injustice from NetherRealm, Lego Batman: The Legacy of the Dark Knight (slated for 2026), and a Game of Thrones RTS in 2026.
Netflix's gaming efforts have been turbulent: it shuttered its AAA studio, sold indie developer Spry Fox after three years, and shifted to mobile and party games tied to shows like Squid Game. Gaming was minimally addressed in the announcement, lumped under "Games & Consumer Product & Experiences." Industry observers question Netflix's AAA commitment, given its focus on streaming synergies, though cross-promotions like Lego Stranger Things could emerge.
Broader Concerns
The Directors Guild of America, led by Christopher Nolan, plans to meet Netflix over acquisition impacts. Sarandos defended Netflix's role, saying, "We’re saving Hollywood," while downplaying theaters' accessibility. Warner Bros. Discovery CEO David Zaslav noted the deal will "drive shareholder value."
This consolidation raises questions about AAA gaming's future under a streaming giant with limited experience.