How Warner Bros. Plans to Lure Fanboys to Games and Movies via Machinima Deal

Natalie Jarvey
The Hollywood Reporter

As Warner Bros. continues to stock up on superhero fare like Suicide Squad and Wonder Woman (out June 2), the studio is making a bet on digital network Machinima that could bolster that box-office strategy.

On Oct. 17, Warners agreed to buy Machinima, a gaming and fandom-centric online brand with the tagline "Heroes Rise," for what sources peg at less than $100 million. The deal, which follows on Warners' two investments into the digital content producer since 2014, comes as Machinima CEO Chad Gutstein has broadened the company's focus from gaming to other genre content. Earlier this year, CW Seed aired its e-sports docuseries Mortal Kombat X: Machinima's Chasing the Cup.

As such, Machinima's 150 million monthly viewers are exactly the audience the studio wants to reach to promote not just movie franchises like Batman but also video game titles like Mortal Kombat.

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Warners has a robust video game business, a segment lumped in with other revenue that generated $367 million during the third quarter of 2016. Craig Hunegs, president of Warner Bros. Digital Networks, noted when announcing the deal that Machinima has "high engagement with audiences that play our games and are big fans of DC films and television shows."

As part of the studio's newly created digital networks division, which includes subscription video acquisition DramaFever, Machinima also adds to Warners' efforts to build out its over-the-top presence.

It's a strategic play for the studio that does not outright own any distribution outlets (CW is a joint venture with CBS) and one that Drexel Hamilton analyst Tony Wible notes "gives them more exposure to OTT networks that may soon be part of traditional TV bundles." 

This story first appeared in the Dec. 2 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.