Warner Bros. Games spent most of the past year as a rounding error in someone else’s merger math. First Netflix said it wasn’t paying extra for the studios behind Mortal Kombat and Hogwarts Legacy. Then Paramount Skydance outbid Netflix entirely, and now those same studios are on track to become part of a company that just spun up its own in-house games division from scratch.

The bidding war Netflix lost

Netflix agreed on December 5, 2025 to acquire Warner Bros. Discovery in a deal valued at $82.7 billion in enterprise value, or $72 billion in equity — a transaction that would have handed it WBD’s film and TV library alongside WB Games studios like Rocksteady, NetherRealm Studios, Avalanche Software, TT Games, and WB Games Montreal. On an investor call about the deal, Netflix co-CEO Gregory Peters said the streamer “didn’t attribute any value” to the games side, calling it “relatively minor compared to the grand scheme of things” despite praising the studios’ work.

That math didn’t survive contact with a rival bidder. Paramount Skydance came back with a higher, all-cash offer, and on February 26, 2026, Netflix said it would not match it, effectively dropping out of the race. WBD shareholders approved Paramount’s $31-a-share offer in April 2026, valuing the deal at roughly $81 billion in equity — about $111 billion including debt. The Department of Justice’s Antitrust Division cleared the deal the following month.

A merger that’s still not finished

Regulatory sign-off didn’t end the fight. On July 13, 2026, attorneys general from 12 states led by California sued to block the merger, arguing it would reduce competition across film distribution, cable television, and streaming. A federal judge briefly issued a temporary restraining order pausing the transaction, and on July 24, Paramount agreed with the state AGs to hold off closing until five days after an antitrust trial concludes, or until June 1, 2027 — whichever comes first. No trial date has been set.

The original target close was September 30, 2026, and the merger agreement includes a “ticking fee” that pays WBD shareholders an extra 25 cents per share each quarter the deal runs late — a cost to Paramount of roughly $7 million a day past that deadline. Whether the games studios change hands this fall or sometime in 2027 now depends on a courtroom timeline, not a corporate one.

Paramount already has a games studio waiting

While the WBD deal was tied up in litigation, Paramount wasn’t sitting still on gaming. On June 5, 2026, at Summer Game Fest, CEO David Ellison’s company unveiled Paramount Games Studio, led by president Tony Driscoll, folding Skydance’s existing game teams together with Paramount’s own IP under one division. Its announced slate includes Teenage Mutant Ninja Turtles: The Last Ronin, Marvel 1943: Rise of Hydra, a Star Trek title called Shadow Frontier, an Avatar Legends fighting game, and an untitled Star Wars project.

That’s a real bet on games as a strategic pillar alongside film, TV, and streaming — not the kind of company that treats a games division as an afterthought, which is precisely the opposite of how Netflix approached WB Games in its own bid.

What it means for Mortal Kombat, Batman, and Hogwarts Legacy

If and when the Warner Bros. Discovery deal closes, Paramount Games Studio inherits a far bigger catalog overnight: Rocksteady’s Batman: Arkham series, NetherRealm’s Mortal Kombat, Avalanche Software’s Hogwarts Legacy sequel, TT Games’ LEGO franchise, and WB Games Montreal, plus licensing rights to Harry Potter, Game of Thrones, and the DC universe to develop alongside Paramount’s own Star Trek, Star Wars, and Marvel properties. For studios that spent the past year treated as a footnote in someone else’s spreadsheet, landing inside a company actively building out a games division — rather than one that publicly said it saw little value in them — is a meaningfully different outcome, even if the closing date is still up in the air.

For more on how consolidation is reshaping who owns what in games right now, see our look at EA’s $55 billion take-private buyout, another deal reshuffling a major publisher’s ownership in 2026, and our coverage of PlayStation’s live-service strategy collapse for a look at how big platform bets have been going wrong elsewhere in the industry this year.