We're offering a 2-week trial of WrapPRO for $1. If you’ve been wanting to check out our full coverage, now’s the time. Greetings!Gaming has never been more important to Hollywood. Beloved characters like Sonic the Hedgehog or Mario and Luigi can now carry blockbuster franchises, as evidenced by the upcoming "The Super Mario Galaxy Movie" and today's tease of "Sonic the Hedgehog 4." Hot video game franchises like Fortnite and Roblox are where the next generation of audiences are spending a lot of their time. So it would make perfect sense for Paramount to bet big in this area through its acquisition of Warner Bros. Discovery, which brings a legitimate gaming studio in Warner Bros. Games. The company has a history of blockbuster AAA titles like "Hogwarts Legacy," the "Batman: Arkham Asylum" franchise and "Mortal Kombat." But given the amount of debt Paramount is taking on to complete this deal — $79 billion upon closing — it raises the question of whether David Ellison has the stomach — or financial ability — to invest in this area when he has already committed to producing 30 films a year (evenly split between Paramount and Warner Bros.) and is seeking to cut at least $6 billion in merger-related costs. Companies historically become “very risk averse” after completing mergers and typically only prioritize assets that are generating revenue and “prove out” the acquisition, Joost Van Dreunen, a video games professor at NYU’s Stern School of Business, told our Lucas Manfredi. “They buy the other firm and say they’re going to develop the cool IP that everyone knows and then also other projects. And that second part is never true,” Van Dreunen said. “Everything that’s higher-risk and half-baked and too innovative to deliver just yet are put in the freezer and you never see them again. So it’s not just people worrying about their jobs. There’s a real ebbing of creative energy because of this.” Paramount itself has had mixed success. There's the Sonic franchise, of course, but its other marquee adaptation was a live-action "Halo" series for Paramount+ that was slammed by fans and lasted only two seasons. On the gaming side, it has largely licensed its biggest properties like "Star Trek," "Teenage Mutant Ninja Turtles" and "Spongebob SquarePants," to third-party developers who have crafted games of varying success. Warner Bros. Games brings the know-how to build its own AAA titles — the big budget projects that get gamers excited and can bring in the big bucks, but come with massive risks because of their eye-watering costs. For every hit like "Hogswarts: Legacy," there's a pricey flop like "Suicide Squad: Kill the Justice League." Wedbush Securities analyst Michael Pachter noted that Ellison's Skydance Gaming unit has stuck with virtual reality for a decade, indicating a willingness to think with a long-term mindset. But with the combined company facing a cash crunch and heavy debt, it's unclear how much of a risk Ellison is willing to take. Roger Cheng Before we move on, be sure to follow me on my socials linked below for the latest updates. DMs are open for tips.    
The potential payoffs from a big video game could be huge. Franchises like "Minecraft," "Fortnite," "Call of Duty," and "Grand Theft Auto" can generate massive revenue, with Warner Bros. Games seeing some of that success (see below)... 
| ||||||||||||
