Warner Interactive's first game, a 2005 World of Warcraft-like online title based on the sci-fi film "The Matrix," was a costly flop. The division struggled to find a hit for several years, but Warner home entertainment group President Kevin Tsujihara, Tremblay's boss and the driver of the studio's video game strategy, remained undeterred. With a DVD distribution operation that could add games at little cost and a library of well-known characters, he believed Warner possessed two of three factors needed for success.
"We already had competitive advantages," Tsujihara said. "But we didn't have the ability to make games."
To get there, Tsujihara went on a spending spree, buying five game production companies and founding another over the last four years. Warner Interactive's biggest franchises — Lego, Mortal Kombat and Arkham — were acquired along with the development teams that make the games.
Warner Interactive spent more than $200 million to buy Lego games maker Traveller's Tales in 2007. Its games, including Lego Batman and Lego Harry Potter, perennially rank among the industry's top 10. Traveller's Tales' success is the primary reason Warner Interactive was profitable from 2008 to 2010, Tremblay said.
Midway Games, the 23 year-old company behind classic arcade titles like Mortal Kombat and Joust, was bought out of bankruptcy in 2009 for $33 million. With it, Warner is seeking to rejuvenate a company that nearly died under its former owner, media mogul Sumner Redstone.
"We were in this building with leaky roofs and power problems, and the first thing Warner did was to move us to a new location with state-of-the-art technology," Mortal Kombat creator Ed Boon said. The ninth Mortal Kombat game, the first released by Warner, was launched in April. It has sold more than 3 million units and made the Midway acquisition profitable.
