AT&T Inc. is considering a sale of the Warner Bros. video game subsidiary for $4 billion to the company to minimize its nearly $ 200 billion in debt, CNBC reported.
According to CNBC, Activision Blizzard Inc., Electronic Arts Inc., and Take-Two Interactive Software Inc. are involved in the company's future acquisitions. The report quoted unnamed individuals familiar with the matter.
AT&T and Electronic Arts and Take-Two refused to comment. Activision did not respond to a request for comment immediately.
What happened?
The telecom company headquartered in Dallas bought the video-game manufacturer in 2018 when they purchased Time Warner Inc. for $85 billion. The news outlet said a selling deal is "not inevitable."
The contract, and an earlier DirecTV takeover, ballooned AT&T 's debt, and the company was searching for ways to cut expenses and unload properties. Incoming Chief Executive John Stankey will continue these efforts on July 1, when he takes the helm.
One difficulty is that the gaming business bases many of its titles on films and shows by Warner Bros, such as Harry Potter and the Lego Movie.
The enterprise, known as Warner Bros. Interactive Entertainment, also produces games like Harry Potter: Join Wizards and Mortal Kombat 11.
WBIE also currently owns several studios, including TT Games, Rocksteady Studios, NetherRealm Studios, Monolith Productions, Avalanche Software, and the Boston, Montreal, New York, San Diego, and San Francisco WB Games, as well as the Harry Potter Universe games label for Portkey Games. In 2018, it also purchased the Plexchat mobile games messaging network.
In 2018, AT&T completed its purchase of Time Warner, leading the firm to own many properties, including Warner Bros. and HBO.
Apparently, the gaming unit has seen many cancellations, particularly from failed adaptations of DC Comics properties. Reports have it that the company was planning a sizeable E3 show with multiple huge titles. WBIE also collaborated with IO Interactive for an undisclosed multi-IP deal last year --- though it does not appear to publish IO's Hitman 3, revealed yesterday.
The plans were canceled due to COVID-19 concerns and that some digital conference will replace it later on. Whether all this has impacted, that is uncertain in any significant way. The fans need to wait and see what happens at this point.
Is Apple Arcade interested in buying WBIE?
The news COULD be a perfect opportunity for Apple to make Mortal Kombat and Batman Arkham more compelling for its young gaming service, 9to5Mac reported.
Apple Arcade features over 100 games, many of which are exclusively supported by a $5 / month subscription to the platform. Apple, however, is not breaking out its customer count for the service in quarterly earnings calls. Some analysts assume that by the end of this year, the facility could see about 12 million paying subscribers.
Although $60 million in potential annual revenue is an excellent start for the young Apple Arcade business, it pales compared to the $13+ billion Apple received in Q2 2020 total service revenue. These users represent a small fraction of Apple's 1.5 billion active devices.
