Warner Bros. is racing ahead with internal studios creating console and PC games

Warner Bros. Interactive Entertainment had a stellar year of blockbuster games in 2015. Those games included Batman: Arkham Knight, Mortal Kombat X, Dying Light, Lego Jurassic World, Lego Dimensions, and Mad Max.

Warner has succeeded in part because its titles such as the Batman Arkham series have stayed far away from movie-related stories. Fans have come to appreciate that such titles stand on their own, and they have flocked to the titles because their high quality. David Haddad, president of Warner Bros. Interactive Entertainment, told me in an interview at the Electronic Entertainment Expo (E3), the big game trade show in Los Angeles last week, that the company hasn’t adopted a schedule of releasing a major game annually with every Warner Bros. property. That allows the company’s studios to fully cook their games before launching them.

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The slate isn’t quite as full this year, but it’s still pretty busy. Warner has released Lego Marvel’s Avengers, and it has new content coming for Lego Dimensions, the toy-game hybrid that launched last year. Lego Star Wars: The Force Awakens launches on June 28. And Warner Bros. announced its Injustice 2 game will be coming in 2017 from NetherRealm Studios. But Haddad assures us that Warner Bros. isn’t backing off on its commitment to make internally produced console and PC games.

Here’s an edited transcript of our interview.

GamesBeat: Do you have any strong impressions from the press conferences?

David Haddad: It’s certainly interesting when, on the console side, there’s a hardware conversation. One of the first parties had a very aggressive, forward-looking view on hardware. Services were also being talked about, but through the lens of gamers. There was a phase where these platforms talked about services in relation to entertainment and the home and the living room. Now it’s all about gamers and things that should make interactive entertainment stronger.

We saw a lot of commitment to giving gamers great quality content, whether it was our story around Injustice 2 — the esports event on Saturday, the tournament for Mortal Kombat — or other publishers. They’re putting out great offerings. We like to see the gamer celebrated.

GamesBeat: You were probably the biggest company at E3 Live.

Haddad: E3 is constantly changing and evolving, as it should. We’re figuring out how to have the gamer participate and be involved while still keeping it a platform for announcements and critical press and business partners. We’re trying to find that balance. As a board member of the ESA [Entertainment Software Association], I think a lot about how to keep E3 as powerful and relevant as possible. I like the addition of gamers invited to play the games and talk about new games coming.

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GamesBeat: You’re one of the companies without your own press conference. How do you decide where to show different things?

Haddad: For us it’s mostly slate-driven. You look at the people that have meaningful press conferences, the big publishers — there’s a slate that holds that together. I believe that could be in our future. It didn’t make sense for us this year.

GamesBeat: The Batman Arkham VR experience: What can you say about that?

Haddad: It’s clearly early days for VR, but it’s a place where, particularly with beloved brands like Arkham and studios like Rocksteady, we just want to be in the space learning. We want our game franchises to be relevant and healthy and compelling as broadly as possible. That guides us on some of our mobile efforts, where we’re taking franchises like Mortal Kombat. We have the console game, but we also have Mortal Kombat Mobile.

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We see this as an extension of relevancy for our biggest and strongest franchises. It’s hard to report in the business of it, the return on investment and all that stuff. But it was an easy decision to put one of our greatest gaming brands with one of our greatest studios against this effort.

GamesBeat: It seems like VR needs a next-stage boost up, with the big brands and triple-A developers coming in.

Haddad: It’s mostly a personal observation, but if you look at platforms and how they scale and when they scale — broadly, for me, VR is a platform, even though there are several pieces to it – they ultimately all have some piece of defining content. The Xbox had Halo. The Wii had Wii Sports. HBO had the Sopranos that propelled them. Hopefully this holiday we’ll see more of that defining content. But given that we’re in the early stages with this, we’ll see it evolve. Once again, we think big brands can matter if they’re creatively compelling and interesting.

GamesBeat: PlayStation VR seems like a very serious effort.

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Haddad: You obviously saw the announcement, that we decided to be at launch with them with Arkham VR. They already know the target audience that wants it. They have the machine there, the PS4s that can plug and play to offer it up. There’s an early elegance to leveraging a gaming platform. There’s a clarity that a lot of gaming content will go into that. Interactive video and 360 video and other elements — the consumer still has to figure out the content in this space and what they want to consume. We felt comfortable with Arkham that it goes to a gaming audience and a gaming platform as a strategy.

GamesBeat: Do you see any paths to an experience comparable to a $60 game that could be done there? For now this seems like a shorter experience.

Haddad: So far that seems to be where the industry is. I don’t know the answer personally, but I asked that question of our game developers myself. They’re the ones that will help us crack the code on that. We don’t know yet. The industry is still evolving. Somebody is going to try to make that game, certainly, if they don’t already have it in development. But that’s not where we started.

GamesBeat: How is the slate this year? Does it reflect more resources coming into your game business thanks to having a good year last year?

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Haddad: We’re thrilled with Injustice 2 coming, our next big core game. We’ll have a stellar Lego year this year with the continuation of Lego Dimensions. Lego Star Wars launches on June 28. That’ll be one of the biggest titles ever for us. Introducing Lego Worlds, moving that great brand into a more digital environment, and the addition of multiplayer — it’s certainly a very strong Lego year. But we’re also thrilled to talk about core games.

Games are an increasingly core component of the Warner Bros. business. We’re now clearly the third production arm of the company — movies, television, and now games. We’re getting a lot of support because our role inside the company is very important.

GamesBeat: Lego Dimensions and the toys-to-life market are still interesting in light of Disney Infinity closing down?

Haddad: We’re still under a year in the market, but it’s a large and important market to participate in. We have the power of our partner. Lego is the biggest toy company in the world, and we have the creative vision of TT to build great content. We continue to believe it’s important, and we want to participate in it.

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GamesBeat: In some ways, do you feel like you’re taking breathers in between major launches? Or do you feel like the slate is just nonstop?

Haddad: My team might say it feels nonstop. One important thing that maybe distinguishes us from other publishers, though, is that we have not taken the approach of annualized franchises. Our slate is different in that respect. We’re not doing a game every year in franchises like Arkham or Mortal Kombat.

One thing we are doing, though, and we’ve had a lot of success in the first half of the year with this, is the way we approach Mortal Kombat. It was a top 10-selling game last year. We’ve added new content to that. We’ve engaged with gamers. We keep adding new characters and providing new offerings, both digital and physical. We have the mobile game with a million DAU on average.

Instead of launching a Mortal Kombat game every year, we’ve chosen to make the life cycle as long as possible and as healthy as possible, and we’ve chosen not to release new games until we’re sure they’re ready. We talked about that a lot last year. We believe, because the big are getting bigger, because gamers have fewer choices but tend to play their games for longer—gamers really care about quality and engagement and longevity, more than ever before. To be in the top 10 we have to commit to that.

GamesBeat: How do you start making decisions now about which of the new consoles to support? Microsoft’s already announced theirs. Nintendo is coming.

Haddad: We have great relationships with all the console platforms. We believe we play a role in each of them. What I saw with the announcements that were made at the show — I’m fairly bullish about he console cycle, about gamers spending time on them and finding great content, about publishers being able to find returns on increasing investments in that space. We’re constantly deciding how to navigate that, but supporting them is not a question for us.

GamesBeat: Is internal development going full speed ahead, as compared to third parties and licensing?

Haddad: Certainly on console. We’re blessed to have some great studios internally that have great franchises associated with them, that own their own tech. We’re keeping them as strong, healthy, and vibrant as possible, from both a talent point of view and a technical point of view.

At the moment I don’t see external development as a key strategy for console. It’s a bit different in mobile. There are great, proven mobile teams out there. We already have a mix of internal and external development on mobile today. We still have a strong point of view about centralized mobile publishing, because we think the network effect on the mobile business is important. But third-party development in mobile is something we’re still going to use.

GamesBeat: Are you still cooking up new IP?

Haddad: At Warner Bros., we feel blessed to have some great IP that could make great games. We’ve talked about how it has to be game IP. A developer has to say, “I see this world and this character translating into a great game design” But we think there’s more to do from our family of other content.