AT&T backs out from selling Warner Bros. Interactive Entertainment

Warner Bros. Interactive Entertainment logo

Due to a ballooning debt that sees AT&T wanting to offload some of its assets, the company has contemplated selling its video game unit, Warner Bros. Interactive Entertainment. But a changing situation and perspective see the company backing out from that choice.

Warner Bros. Interactive Entertainment is home to the industry’s popular IPs, including Harry Potter and Mortal Kombat. An asset that finds appeal from major enterprises and, if sold, could reap AT&T no less than $4 billion, as per CNBC.

Interested Parties

Anonymous sources claim the Dallas-based company was conferring with LionTree Advisor earlier this year about the prospect of selling the business. Companies that saw interest include Electronic Arts, Inc., Microsoft, Inc., Activision Blizzard, Inc., and Take-Two Interactive Software, Inc.

But other sources claim that the giant telephone company is balking from the proposition, citing the positive business prospect of gaming. One being the soon-to-launch Harry Potter: Wizards Unite, a mobile title that will tap on a rather large market.

Another reason is the effect of the COVID-19, which sees the allusion of gaming as an alternative experience to movie theaters. Essentially, attributing blockbuster successes to video game releases amid an ongoing pandemic.

In addition, AT&T’s change of leadership also played a significant role in its ostensive change of heart. Just last month, the company saw John Stankey’s transition from the COO to CEO, replacing Randall Stephenson, who remains as chairman.

While the aforementioned are strong reasons enough not to pursue the sale, there are also other factors at play. On the technical side of things, selling WBIE would be a complicated feat, considering the licensed contents in the games. Which, if anything, would connote strings to the buyer in the long term.

A Necessary Measure

Back in 2018, AT&T acquired Time Warner Inc., which includes the video game maker, for $85 billion. This procurement, in addition to the acquisition of DirecTV, caused the company to accrue massive debt, subsequently causing it to find ways to cut costs to keep the business, including the option to unload existing assets.

With Stankey at the helm of AT&T, the company saw bids for its estate, including DirecTV, which is finding a shrinking market as a satellite-TV service. Other resources that see the potential for sales are Xandr and Crunchyroll, the digital advertising unit, and streaming service, respectively.

Acknowledging the issue at stake, Stankey admits to investors last October of its willingness to make certain moves to direct the business in the right way.

“We have no sacred cows—we’re always open to making portfolio moves.”

Image used courtesy of Zul Fiqha/YouTube Screenshot

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