Warner Bros. Interactive Entertainment launched Mortal Kombat 11 in April -- the unit's biggest video game release since it became part of AT&T (NYSE:T). Most of the attention and analysis surrounding the telecom giant's big acquisition of Time Warner has understandably centered on the film and television assets that were brought into the fold, but the company's newly integrated gaming business has potential that's being overlooked.
The latest Mortal Kombat is putting up killer sales
Mortal Kombat 11 ranked as the best-selling video game through the first half of 2019, according to data published by NPD Group in July. The last two Mortal Kombat games were big successes for Warner, and MK 11 is on track to be the franchise's best-performing entry.
The game's publisher issued a press release shortly after its launch indicating that it had posted the best opening in series history. According to research from SuperData, Mortal Kombat 11 managed to sell 1.8 million copies digitally in its launch week. For context, Mortal Kombat X posted 400,000 digital sales in its first week.
That it's on course to surpass its predecessor is a notable feat: Mortal Kombat X currently stands as the best-selling game in the franchise, having moved roughly 11 million units, and delivered strong player engagement that translated to impressive expansion-content sales. Mortal Kombat X was North America's eighth-best-selling title of 2015, and there's a good chance that Mortal Kombat 11 will manage to close out 2019 with an even better rank on the sales chart.
AT&T and Warner have video gaming strength beyond Mortal Kombat
Time Warner's video game division actually received a lot of plaudits and fanfare back in 2015, as performance for Mortal Kombat X and Batman: Arkham Knight played a leading role in powering the entertainment company to better-than-expected earnings. The combined sales power of these two titles made Time Warner America's biggest game publisher by revenue for the first half of 2015.
Other big game franchises in the Warner Bros. unit include Lego, Lord of the Rings, and Heads Up. The unit also recently launched a Game of Thrones mobile game, is readying a new Harry Potter game, and is also working to launch new properties. The publisher announced that it had partnered with developer Turtle Rock studios (known for the popular Left4Dead franchise) for the creation of Back 4 Blood -- a multiplayer zombie-survival game.
Warner has even been stepping up as a distributor, most notably publishing games in developer CD Projekt's Witcher series. That relationship helped lay the groundwork for the two companies to partner for the Polish game company's Cyberpunk 2077 -- one of the most anticipated games in the world right now, and one that has massive potential to be a breakout hit.
Content is king
Technology giants including Alphabet, Apple, and Amazon are pushing to build bigger positions in the video game space, and interactive entertainment is viewed by large platform holders as an important hook that can bring users in and keep them engaged in their ecosystems. AT&T made a big bet on content as a keystone of its services ecosystem when it acquired Time Warner in a $100 billion deal that saw it pay $85 billion for the company and assume the entertainment giant's debt. Warner's film and television assets were the driving factors in AT&T's acquisition move, but the significance of its gaming assets still seems broadly overlooked.
With AT&T gearing up to launch its HBO Max video streaming service, and strong indications that streaming will become much more popular as a distribution method for interactive entertainment, it's natural to think that the telecom giant could eventually incorporate video games into its streaming package. Games could also be used as promotional hooks, similar to the way it has used television franchises like Game of Thrones to promote the company's mobile wireless service.
Mortal Kombat isn't a draw of the same magnitude as Fortnite or Grand Theft Auto, but the franchise's recent entries have reliably put up great performances. There's still potential for the property to grow, and the franchise gives AT&T a strong position in the fighting-game genre, as well as a property that could be used to bolster the appeal of its other offerings. All in all, there's a good chance that the telecom giant's new strength in interactive entertainment will eventually attract a lot more attention.