The gaming industry has had a tumultuous year so far. There have been numerous layoffs of employees and studios liquidating in just the first two months of 2025. Numerous layoffs occurred, and studios liquidated. Sadly, Warner Bros. Games recently announced that three of its major development teams are shutting down, and an anticipated title from one of those studios is no longer in development. In this article, we will review everything we know about the current situation at Warner Bros. Games.
The Situation
This news comes courtesy of Jason Schreier, a reporter at Bloomberg. After Schreier broke the news in a report, Warner Bros. released this statement:
"We have had to make some very difficult decisions to structure our development studios and investments around building the best games possible with our key franchises — 'Harry Potter,' 'Mortal Kombat,' 'DC' and 'Game of Thrones.' After careful consideration, we are closing three of our development studios — Monolith Productions, Player First Games and Warner Bros. Games San Diego. This is a strategic change in direction and not a reflection of these teams or the talent that consists within them.
"The development of Monolith's 'Wonder Woman' video game will not move forward. Our hope was to give players and fans the highest quality experience possible for the iconic character, and unfortunately this is no longer possible within our strategic priorities. This is another tough decision, as we recognise Monolith's storied history of delivering pic fan experiences through amazing games. We greatly admire the passion of the three teams and thank every employee for their contributions. As difficult as today is, we remain focused on and excited about getting back to producing high-quality games for our passionate fans and developed by our world class studios and getting our Games business back to profitability and growth in 2025 and beyond."
Monolith Productions
Monolith Productions has been in the game industry for nearly three decades. It began as a company developing PC games in the 1990s before breaking through the console market with the critically acclaimed F.E.A.R. in 2005. Since then, Monolith developed the cult classic Condemned: Criminal Origins and, perhaps their best-known work, the Middle-earth series. Middle-earth: Shadow of Mordor was the first game in the series, and it was well-received upon its release in 2014. Particular praise went to the game's Nemesis System, which allowed NPCs to remember the player's actions throughout the game, often with later consequences during combat in the story. It was a fantastic idea, so much so that Warner Bros. Games has patented the mechanic for the next decade, which is not a great idea.
The patent for the Nemesis System means that Warner Bros. Games owns the concepts of the Nemesis System, and no other game developer or publisher can implement it into their games. On paper, this is not out of the ordinary, and patents are not uncommon in the gaming industry. The problem is that the last game to use the Nemesis System was Middle-earth: Shadow of War in 2017, and not a single Warner Bros. title has taken advantage of the mechanic. WB may have a plan for the Nemesis System in the future, but it surely will not include Monolith, who was also working on the now-cancelled Wonder Woman game.
Player First Games
Player First Games was a small team of developers responsible for the popular online free-to-play fighting game MultiVersus. The game was announced in 2021 and was in early access from July 2022 to June 2023. The game was an appealing concept, a fighting game where you get to play as iconic characters featured in Warner Bros films, TV shows and cartoons. Characters include Finn the Human from Adventure Time, Gizmo and Stripe from Gremlins, Agent Smith from The Matrix and even Tom and Jerry. The full game was released in May 2024 and got mostly positive reviews, but the game was considered a failure by Warner Bros after stating it performed below the company's expectations.
2024 was a rough year for Warner Bros. After their success in 2023 with Hogwarts Legacy, 2024 gave us Suicide Squad, Harry Potter: Quidditch Champion and MultiVersus, all games that have been considered disappointments by the company. Their huge financial losses caused the decision to shut down MultiVersus later this year. The game will remain playable offline, but WB will shut down all online capabilities and delist the game from storefronts. It's a sad situation because there was a lot of potential with MultiVersus, a Smash Bros-style fighter game featuring pop culture icons; it should have worked. But sadly, it was not to be.
Warner Bros. Games San Diego
Warner Bros. Games San Diego is the newest team of three, established in 2019. The company focused on mobile gaming, particularly free-to-play titles. At one point, San Diego was allegedly developing a AAA cross-platform game that would also be free to play. Sadly, this title is likely no longer in development due to the studio's closure. The gaming community never got to see the studio's true potential. Tom Casey, one of the senior vice presidents at Warner Bros. Games, was in charge of the studio. The San Diego team could have made something good, but it is a question we will never know.
Warner Bros. Games: What's Next?
The closure of these developers is a crucial sign that Warner Bros. Games is drastically changing its intentions for the future. Now that Monolith, Player First Games and San Diego are gone, what do we have left? The three key developers are Rocksteady Studios, Avalanche Software and NetherRealm Studios.
Rocksteady needs its next project to be a hit and restore its reputation. Suicide Squad was a complete disappointment, and the team lacked direction. The company needs to return to what it does best: single-player experiences with incredible combat, which made it a trademark name with the Arkham series.
NetherRealm Studios is known for Mortal Kombat and Injustice. After the success of Mortal Kombat 1 in 2023, the company has been hard at work on a new project for the past few years. Rumours suggest the unannounced game is the next Mortal Kombat, but some people believe it will be Injustice 3 or a brand-new IP. Whatever it is, it needs to be a success to keep the company afloat.
The company with the biggest pressure is Avalanche Software. The company has previously announced that a sequel to Hogwarts Legacy is in development. Due to the huge critical and financial success of Hogwarts Legacy, the sequel is almost certain to be a profitable asset for WB. Avalanche has to find the perfect balance for the sequel, and if they pull it off, it will be a step in the right direction for Warner Bros.
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