Skip to Content

Warner Bros. Interactive Expands, Opening New Free-to-Play Video Game Studio in San Diego

Warner Brothers might be more familiar for its shows and movies, but the company also turns out some big game hits with its Interactive Entertainment division. Now Warner Bros. Interactive Entertainment is expanding with a new games studio in San Diego.

The new studio, WB Games San Diego, doesn't just mark a growing gaming empire. It's a stake in the growing free-to-play mobile games market as the new studio will focus specifically on the genre.

"This new studio is a testament to our continued evolution in the mobile games space, as we have grown to become one of the top grossing mobile games publishers due to the tremendous success of our portfolio, including Game of Thrones: Conquest and Golf Clash," David Haddad, President of Warner Bros. Interactive Entertainment, said in a statement.

The mobile games market, especially when it comes to free-to-play games, has proved lucrative spawning mobile editions of game franchises like Fallout and Elder Scrolls, traditionally reserved for PCs and consoles.

"They've specifically chosen free-to-play because of the dynamic of the market. They're not over exposed to that market," IHS Markit analyst Piers Harding-Rolls says. "They have a couple of studios [that make mobile games], but that's an opportunity where they can further develop."

The news of a new game studio opening also serves as a bright spot for the industry. Many other studios have seen layoffs or have shuttered altogether. A key difference between the new WB Games San Diego studio and those ill-fated gaming studios is its mobile focus.

New and better games that play well on mobile (and, importantly, bring in money) are proving to be a source of industry growth. SuperData's 2018 year end report found that free-to-play games made up a whopping 80% of all digital game revenue, bringing in $88 billion. Mobile games, meanwhile, earned $61 billion.

"They see the broader competitive landscape and they're reacting to that," Harding-Rolls says. "Obviously some doors are being closed in some ways [as studios lay off staffers and close], but in other ways there are new opportunities on the table."

More must-read stories from Fortune:

—How Reliance Jio became India’s wireless wonder
—Google is cracking down on internal political debates
Apple card review: A (mostly) rewarding way to pay
—No humans needed: Chinese company uses A.I. to read books and the news
—ProPublica: How Amazon and Silicon Valley seduced the Pentagon
Catch up with Data Sheet, Fortune's daily digest on the business of tech.