Reports that AT&T is considering selling its Warner Bros. Interactive Entertainment gaming division has ignited a bidding war among video game publishers. Activision Blizzard, Electronic Arts (EA), Take-Two Interactive, and Microsoft are all eyeing the operation. Warner’s licenses to develop games based on the DC Comics and Harry Potter franchises are the main prize, and those companies looking to develop new services like cloud gaming will be particularly keen to win the race.

Exclusive rights to major franchises will drive the bidding

The exclusive licensing of Disney-owned properties such as Spider-Man (by Sony) and Star Wars (by Electronic Arts) has been a major success. Sony has reportedly raked in $455m from Marvel’s Spider-Man on the PlayStation 4, with over 13 million units, while Electronic Arts has sold more than 10 million copies of Star Wars Jedi: Fallen Order since it launched in November 2019.

Given these numbers, it is unsurprising that game publishers are eager to acquire the rights to Warner Bros’. intellectual property. Warner also owns studios such as Rocksteady, NetherRealm, and Monolith, which will allow game publishers to bolster their development set-ups.

Microsoft and EA are potential leaders in the Warner Bros. bidding war

Microsoft is expected to be an early bidder, and an acquisition would benefit its focus on new Xbox Series X consoles and xCloud platform. It has already partnered with AT&T for 5G, cloud, and edge computing solutions, and will look to build on this relationship as part of its strategy to outflank Sony’s PS5 consoles and PS Now cloud gaming service.

Microsoft has acquired several game studios in recent years as it seeks to expand its library of first-party games. Acquiring Warner Bros. Interactive Entertainment would allow it to add DC properties on Xbox to challenge Sony’s Disney-owned exclusives.

EA is also expected to join the bidding, primarily to add Warner games and AT&T’s 5G capabilities to its upcoming cloud gaming service, Project Atlas. Its experience of licensing gaming properties from Disney and proven ability to create compelling content around them will be a factor for AT&T to consider.

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Activision Blizzard and Take-Two will aim to improve their portfolio of games

Activision Blizzard has less experience than EA in game licensing and lags behind Microsoft in game services, but should consider a move for the Warner operation to expand its role-playing game (RPG) line-up with Mortal Kombat, Batman, Hitman, and Harry Potter titles.

It would also allow it to add Warner’s mobile titles alongside Call of Duty Mobile and challenge the likes of Tencent, Take-Two Interactive, and EA in the market.

Take-Two Interactive has plans to launch 93 games over the next five years, of which 21 are planned specifically for mobile. With less experience in mobile gaming, it will need titles that can replicate the popularity of Fortnite Battle Royale and Call of Duty Mobile.

The addition of Warner Bros. games such as Harry Potter: Wizard’s Unite and Game of Thrones: Conquest to its line-up will help attract users faster than new, non-franchise titles.