Warner Bros. Interactive Entertainment is no longer for sale. Sources say AT&T Inc. has decided its video games business is too valuable to sell, at least for now.
People familiar with the situation say AT&T believes the video game company has a huge potential for growth, according to Bloomberg. The decision comes as the telecommunications conglomerate searches for ways to cut costs and streamline. It is also trying to pay down its debt, which swelled after the company's acquisition of DirecTV and its $85 billion purchase of Time Warner Inc. in 2018. The latter saw AT&T acquire Warner Bros. Interactive Entertainment.
AT&T's plans to sell the video game developer and publisher were first reported in June. The potential price tag for Warner Bros. Interactive Entertainment at the time was estimated to be $4 billion. While it was on the market, it attracted interest from Electronic Arts Inc., Activision Blizzard Inc. and and other major companies including Microsoft Corp.
Warner Bros. Interactive Entertainment is home to a number of notable video game franchises, including the Batman: Arkham series and Mortal Kombat. It owns the licensing gaming rights to the Mad Max, Lord of the Rings and Harry Potter franchises. It also possesses the rights to LEGO-based video games, which includes a number of crossover titles, including Batman, Jurassic Park and Marvel Superheroes.
In addition to the video game company's perceived growth potential, other factors may have also influenced AT&T's decision. One such factor could be that the U.S. gaming industry is experiencing a massive boost during the ongoing coronavirus (COVID-19) pandemic. With movie theaters shuttered and social distancing encouraged, many are turning to video games as a source of entertainment. There also appears to be a great deal of optimism surrounding an upcoming Harry Potter title which will allow players to explore Hogwarts.
Warner Bros. Interactive Entertainment experienced a change in leadership in July when Chief Operating Officer John Stankey took over as chief executive officer. Stankey has reportedly told investors in the past the company is always open to selling off any of its properties.