WB is being Audited by Discovery before MK1 was developed

[Bulletz4Breakfast]

This is something I first heard from Pig Of The Hut on a debate stream and suddenly it all made sense why this game and MK11 was micro transactions heavy. From what I've heard they owe over $250M which is more than all 3M copies they sold. For them to make that money back to be in profit would require 21M $10 skins sold. Which is insane. It suddenly makes sense why MK1 was rushed, why they already dropped the price of base game to $50 and why there's so many micro transactions.

I looked it up and Discovery is in fact auditing WB and that's including MK1 among many other games.

 

[theotherguy]

they owe over $250M

Who is they? NRS or WB? If it's WB then it makes no sense that NRS should have to make up the 250mill alone, considering WB has a menagerie of brands and IP's. If it's NRS, well how did they let them rack up that much debt before reigning things in?

I'm sure there's probably some truth in that, but honestly think it's the people at the top being greedy. We got away with $5 skins 5 years ago, lets go to $10 and see how much we can grab.

 

[Marlow]

From what I've heard they owe over $250M

Not sure who "they" is. NRS is a subsidiary owned by WB Games, a division within Warner Bros Discovery. If they owe anything, it's an intercompany loan, which isn't that important depending on what the subsidiary structure looks like.

I looked it up and Discovery is in fact auditing WB and that's including MK1 among many other games.

I'm not sure what that even means. Companies routinely do internal audits all the time, and a publically traded company like WB Discovery is required to have an annual external audit, which likely includes specific external stand alone audits for all of their subsidiaries. That's standard business practice, not something out of the ordinary.

I'd have to hear more context, but I'm wondering if Pig might not know what he's talking about, and might be misunderstanding something, or heard something wrong.

 

[Juxtapose]

Companies routinely do internal audits all the time...

Yup. And while I can't speak for the US, but here, the government can do regular audits of companies as well. Or random audits.

Audits are nothing out of the ordinary, as you mention.

Companies having debt, even profitable companies, is also not out of the ordinary.

 

[Marlow]

Just looking at WB's most recent financial disclosures, their current Related Party Receivable balance is $346 Million, I highly doubt $250M of that is from NRS alone, that would be crazy.



See page 31: https://s201.q4cdn.com/336605034/files/doc_financials/2023/q3/WBD-2023-09-30-10Q-Filed-Copy-11-08-23.pdf

 

[Bulletz4Breakfast]

Just looking at WB's most recent financial disclosures, their current Related Party Receivable balance is $346 Million, I highly doubt $250M of that is from NRS alone, that would be crazy.

View attachment 21280

See page 31: https://s201.q4cdn.com/336605034/files/doc_financials/2023/q3/WBD-2023-09-30-10Q-Filed-Copy-11-08-23.pdf

Get a hold of Pig because he supposedly talked with NRS and said WB owes a lot and WB has like 7 different games companies being audited and MK1 is one of them and apparently something is going on internally because the audits have been going on for a couple years.
He said like 3M copies (I assume $70ea) which is $210M but I have no connections with NRS or WB so I can't say what's what but I know Pig has contact with NRS

 

[CrimsonShadow]

I think there's some confusion here. WBD, as whole, is in a ton of debt $30 billion. As a result of that total debt, they have audited a lot of their internal companies to figure out where they can cut costs, generate more income, and make up the shortfall. So the overall goal is to try to spend less and squeeze out more revenue.

 

[Bulletz4Breakfast]

I think there's some confusion here. WBD, as whole, is in a ton of debt $30 billion. As a result of that total debt, they have audited a lot of their internal companies to figure out where they can cut costs, generate more income, and make up the shortfall. So the overall goal is to try to spend less and squeeze out more revenue.

Do you have any details because I'm no expert on auditing or taxes. Pig was saying NRS upper staff said WB was in a bad place and basically have very limited funding and resources for MK1 but did it because they knew MK would sell. NRS does it for the love of fighting games.
Do you think this is why it was rushed? I know Pig and a few at NRS think so

 

[CipherJ]

MK1 had a 4 year development cycle. Yet felt as rushed as any of their games that had 2 year cycles. Covid can only take so much of the blame.

If WBD truly is $30 billion in the hole, may be they could make up some of those losses by selling NRS.

If NRS was to be sold off who would be a good parent company? Who would be a bad one?

Bad-Microsoft or EA, although Bethesda seems like it would be good fit.
Good-Valve

 

[Eji1700]

MK1 had a 4 year development cycle. Yet felt as rushed as any of their games that had 2 year cycles. Covid can only take so much of the blame.

If WBD truly is $30 billion in the hole, may be they could make up some of those losses by selling NRS.

If NRS was to be sold off who would be a good parent company? Who would be a bad one?

Bad-Microsoft or EA, although Bethesda seems like it would be good fit.
Good-Valve

Valve is probably a very questionable company for a fighting game. They were a perfect fit for DotA and CS after TF2 showed they could do a freemium/loss leader model successfully, but I'd be very curious if their development style could even handle it.

I'll also add that MS, while not perfect, does have KI under it's belt which is easily one of the best fighters period.

Further, I think your guesses are both VERY optimistic. IF such a sale were to happen, the most valuable thing is probably the IP, not the game. MK slot machines is a lot more likely of an outcome than EA MK.

 

[Shania Twain]

I think there's some confusion here. WBD, as whole, is in a ton of debt $30 billion. As a result of that total debt, they have audited a lot of their internal companies to figure out where they can cut costs, generate more income, and make up the shortfall. So the overall goal is to try to spend less and squeeze out more revenue.

I don't really think there is a debate to be had or confusion. Discovery saw an opportunity because most of their content like HGTV, Discovery, etc is made at a very low cost, watched by many and rated G. Dentists office every play these channels on repeat, they probably generate massive diverse AD revenue so what better way to get their content merged with HBO, DC, etc. They now have the famous name of their own with WB plus now own the intellectual property rights of franchises. This is where they have to get rid of the kings in the castle that have to be overpaid and/or these CEOs need to say...we can do that however they need to request higher pay for QC talent instead of relying on pro-players. Also, they are trying to capture the Gen-Z audience which is fine but how are they supposed to go to college/work/social lives and pay for it. Fighting games are also somewhat of a niche' audience. Tekken, Street Fighter are popular worldwide while MK is largely popular in NA and Brazil, and Parts of Europe and Australia.

The story mode can easily be seen on youtube since day 1 as all other of the games simply as a movie. If you want to unlock the story unlockable you just pause the cutscene in game and hit skip. I won't lie ... for the most part I was largely not playing the 3D era games after maybe 3 months. I also recall Boon saying that lines from Annihilation were terrible yet they were owned by WB. That is not kind to the franchise that owns the intellectual property or they actors especially when they had to save Midway from filing Bankruptcy.

I don't think WBD getting involved more with NRS is a bad thing, or saying things like "what can we do and provide to make the game a lot better?" And people are attending these events in Vegas or wherever largely to have something to do and have a good time. And this is not just video games it is across the board. And this is not a jab at you. Everyone deserves to have a good time and money and good jobs. and world peace! and we are all here because we love the franchise and game. let us not forget that.

 

[Bulletz4Breakfast]

What I've heard was WB is in a serious $ issue. They cut funding to MK1 3/4 through and only funding 4 public promotion announcements and pushed the cost of DLC and Pro Tour on NRS themselves. So NetherRealm is funding the game now.
I can definitely see that there was some sort of money issue going on behind the curtain. Something happened because I've never seen a MK game missing so much basic core features before. This game was like half Beta when it dropped.
I'm sure a lot of fixes and changes are coming but when is the question, middle of KP1 or just at KP2?

 

[Son ov Timett]

Boon is going to be pulling street corner tricks for John's with brow fetishes.

 

[CipherJ]

Valve is probably a very questionable company for a fighting game. They were a perfect fit for DotA and CS after TF2 showed they could do a freemium/loss leader model successfully, but I'd be very curious if their development style could even handle it.

I'll also add that MS, while not perfect, does have KI under it's belt which is easily one of the best fighters period.

Further, I think your guesses are both VERY optimistic. IF such a sale were to happen, the most valuable thing is probably the IP, not the game. MK slot machines is a lot more likely of an outcome than EA MK.

Valve would not be the developer in my scenario, NRS would be. Valve would just be the parent company. Valve doesn’t seem to buy big properties, which IMO MK is one. The few games that Valve (excluding Half-Life) owns were small teams who made mods.

Microsoft has botched so many IPs IMO. Their successes are Halo, Forza, KI while so many others are just sitting in a storage closet. They overpaid for Activision-Blizzard both of which were being mismanaged before the acquisition. I hope Bethesda can get out of their slump—Fallout, Elder Scrolls, and Doom are all potential huge money makers. Do they own Heretic and Hexen? If I were one of their execs I would put the Doom guys on making a reimagined Hexen pronto.

NRS has been very successful so they can survive turmoil at WB. I like how they heavily discount their games as time goes on—as an effort to market for their new game. I just wish QoL and balance could be better implemented.

Would lower prices earn more than high prices on premium skins and fatalities? $8 does seem high for a character. I bought the premium edition to avoid that, but some of the griping is the cost of that dlc. Which every fighting game developer has these days.

 

[Juxtapose]

Their successes are Halo, Forza, KI while so many others are just sitting in a storage closet. They overpaid for Activision-Blizzard both of which were being mismanaged before the acquisition. I hope Bethesda can get out of their slump—Fallout, Elder Scrolls, and Doom are all potential huge money makers. Do they own Heretic and Hexen?

A few comments on Xbox Game Studios here:

You forgot Gears of War, which is a fantastic IP. I was completely surprised by how excellent Gears of War 4 was, and it was the first major Unreal Engine 4 title on the market. It felt like classic Gears (in a good way), showed The Coalition could make a proper Gears of War title, was Unreal Technology leading for it's time, and launched the fantastic Xbox Play Anywhere program (Something Sony and Nintendo still have no answer to).

Gears 5 is another fantastic technical accomplishment with great gameplay and open world elements added in, shows they could further the franchise in their own direction, and the "Hivebusters" DLC is a fantastic take on Gears as well. Digital Foundry not only praised the game from a tech standpoint, but stated the cinematics are up there in quality with the likes of Naughty Dog. They also praised how fantastic the PC ports of both titles are; and how it's a console to PC game done right.

Gears Tactics is a fantastic strategy game that really works in the setting. Very reminiscent of XCOM, it's the kind of experience that's lacking on other consoles.

For Activision-Blizzard, that remains to be seen. Blizzard Entertainment is still a huge money maker, inspite of the issues the studio has faced. Both Overwatch 2, Diablo IV, and World of Warcraft are still raking it in. Call of Duty is, of course, the big title, and in 10 years, Microsoft can pull that from PlayStation if they so choose. Assuming the IP keeps going as it has, that'll be huge.

DOOM: Eternal is fantastic; modern id Software doesn't make bad games at this point. Fallout and The Elder Scrolls have been focused on their MMO titles, and this was a thing before the aquisition. Here's hoping The Elder Scrolls VI will be solid.

Not sure who owns the rights to the Heretic and Hexen franchies, though I'd love to see another title. Digital Foundry has been asking for this as well.

The thing about Xbox Game Studio's first party titles is they often release in a state very similar to Mortal Kombat 1: unpolished and having needed more dev time. Once they do get polished up though, they're games are fantastic with exceptional gameplay loops and extremely high replay value. Halo: Infinite is an excellent example of this. Interestingly, The Coalition is the exception, releasing highly polished games from launch.

Personally, I think Valve would be a poor parent company, while in comparison, I think Xbox Game Studios would be an excellent one. They are the only other company out there with a proper western fighting game under their belt.

 

[CipherJ]

A few comments on Xbox Game Studios here:

You forgot Gears of War, which is a fantastic IP. I was completely surprised by how excellent Gears of War 4 was, and it was the first major Unreal Engine 4 title on the market. It felt like classic Gears (in a good way), showed The Coalition could make a proper Gears of War title, was Unreal Technology leading for it's time, and launched the fantastic Xbox Play Anywhere program (Something Sony and Nintendo still have no answer to).

Gears 5 is another fantastic technical accomplishment with great gameplay and open world elements added in, shows they could further the franchise in their own direction, and the "Hivebusters" DLC is a fantastic take on Gears as well. Digital Foundry not only praised the game from a tech standpoint, but stated the cinematics are up there in quality with the likes of Naughty Dog. They also praised how fantastic the PC ports of both titles are; and how it's a console to PC game done right.

Gears Tactics is a fantastic strategy game that really works in the setting. Very reminiscent of XCOM, it's the kind of experience that's lacking on other consoles.

For Activision-Blizzard, that remains to be seen. Blizzard Entertainment is still a huge money maker, inspite of the issues the studio has faced. Both Overwatch 2, Diablo IV, and World of Warcraft are still raking it in. Call of Duty is, of course, the big title, and in 10 years, Microsoft can pull that from PlayStation if they so choose. Assuming the IP keeps going as it has, that'll be huge.

DOOM: Eternal is fantastic; modern id Software doesn't make bad games at this point. Fallout and The Elder Scrolls have been focused on their MMO titles, and this was a thing before the aquisition. Here's hoping The Elder Scrolls VI will be solid.

Not sure who owns the rights to the Heretic and Hexen franchies, though I'd love to see another title. Digital Foundry has been asking for this as well.

The thing about Xbox Game Studio's first party titles is they often release in a state very similar to Mortal Kombat 1: unpolished and having needed more dev time. Once they do get polished up though, they're games are fantastic with exceptional gameplay loops and extremely high replay value. Halo: Infinite is an excellent example of this. Interestingly, The Coalition is the exception, releasing highly polished games from launch.

Personally, I think Valve would be a poor parent company, while in comparison, I think Xbox Game Studios would be an excellent one. They are the only other company out there with a proper western fighting game under their belt.

Although Gears is a MS property it was Cliffy B’s/Epic’s baby originally. MS did not botch the sequels, but Gears 3 is considered to have its best MP from what I know. It has run its course and was successful in its time.

Doom 2016 and Doom Eternal predate MS acquisition of Bethesda, so they can’t claim any credit there.

Valve IMO would fund NRS and tell them to make it the best MK they can. IMO that seems how Dota 2 and TF2 and CS are treated, but those are apples compared to the oranges of MK so very hard to compare them.

NRS has all the experience they need to make the fighting game. I don’t think WB makes any developing decisions, just marketing and monetization decisions. No parent company needs to direct NRS how to make the game.

 

[Juggs]

but did it because they knew MK would sell. NRS does it for the love of fighting games.

Just giving ya a hard time, but having these sentences back to back made me laugh lol

 

[Shania Twain]

What I've heard was WB is in a serious $ issue. They cut funding to MK1 3/4 through and only funding 4 public promotion announcements and pushed the cost of DLC and Pro Tour on NRS themselves. So NetherRealm is funding the game now.
I can definitely see that there was some sort of money issue going on behind the curtain. Something happened because I've never seen a MK game missing so much basic core features before. This game was like half Beta when it dropped.
I'm sure a lot of fixes and changes are coming but when is the question, middle of KP1 or just at KP2?

NRS is owned by WBD. NRS are not funding the game at all in any way. They own the office, company, the whole shebang. Their social media accounts like twitter/linkedin can only post so much publicly. During the window of early access that weekend there was non stop tv spots in various edits on ESPN, Football games etc. I know this cuz people I knew were constantly telling me they knew of the game. Also the beginning of Football season so perfect timing. I don't doubt that cost a massive penny. I don't know for certain but I believe some edits of the game not showing gore/etc were shown during movie theatre previews. I could be wrong on that.

 

[Bulletz4Breakfast]

Just giving ya a hard time, but having these sentences back to back made me laugh lol

I get ya, it's a internal conflict of mine. I believe boon does it for the love of fighting games and martial arts and his inner kid, I mean him and Tobias coded those arcades.
But I also feel there are some NRS employees that don't care but still love fighting games just not at the competitive level like the shit Stephanie said to me.
But I've heard most at NRS are great people.
If ya get what I mean, several NRS employees may be very dedicated to making a Fun To Play fighting game where you have that Omni-Man vs Homelander the who will win factor the nerdy side and playing with friends.
That's on the casual side but I don't think those couple employees care about perfect balance down to frame data and B Tier characters being on the same level as S Tiers with similar universal tools. Like having a character that has a 6f poke into amazing mids while some others have 7-8f pokes that are -11 on block with a unusable mod close up bad hit advantage on pokes and gaps in all their starter strings like ( Cough Sub Zero)

 

[Bulletz4Breakfast]

NRS is owned by WBD. NRS are not funding the game at all in any way.

I get where your coming from but the Pro Tour specifically stated NRS funded Pro Tour and WB is not funding it in any way. It was a disclaimer shown at ECT by NetherRealm

 

[Juxtapose]

Although Gears is a MS property it was Cliffy B’s/Epic’s baby originally. MS did not botch the sequels, but Gears 3 is considered to have its best MP from what I know. It has run its course and was successful in its time.

Yes it was, just as Halo was Bungie's and Bungie when through periods of being owned by Microsoft and being independent at the time. Regardless, Gears of War and Halo are and have always been considered Microsoft first party titles.

Both Gears of War 3 and Halo 3 have what's considered the best Multiplayer for their franchises, as that was roughly the height of their popularity. Their Campaigns though, left a good bit to be desired.

Gears of War is still going and doing extremely well, it's not run it's course yet.

Doom 2016 and Doom Eternal predate MS acquisition of Bethesda, so they can’t claim any credit there.

True, but I have faith in id Software to continue to make excellent games.

Valve IMO would fund NRS and tell them to make it the best MK they can. IMO that seems how Dota 2 and TF2 and CS are treated, but those are apples compared to the oranges of MK so very hard to compare them.

Yeah. Personally, I think Valve would be a poor owner for the franchise, so we'll have to disagree here.

I don’t think WB makes any developing decisions...

While I'm not involved in the development of the game, or game development itself, I do have friends at Ubisoft and work in the entertainment industry myself. Typically the publisher sets about the project mandate, and the developer needs to design their game, and their development decisions, around that. The publisher reviews the project at points to make sure things are going how they want, and notes changes/adjustments they want the developer to make. I'd be very surprised if WB Games does not have direct say.

 

[Juxtapose]

I get where your coming from but the Pro Tour specifically stated NRS funded Pro Tour and WB is not funding it in any way. It was a disclaimer shown at ECT by NetherRealm

NetherRealm Studios has their own budget, provided by WB Games. WB is the parent company, NetherRealm Studios is the subsidiary.

 

[LEGEND]

Both Gears of War 3 and Halo 3 have what's considered the best Multiplayer for their franchises, as that was roughly the height of their popularity. Their Campaigns though, left a good bit to be desired.

Gears of War is still going and doing extremely well, it's not run it's course yet.

kinda off topic here but I always thought Gears 1 was peak and everything after was luke-warm attempts at keeping the franchise alive. Nobody I know really dug the sequels, so its surprising to hear that Gears 3 is considered the best MP by some degree of people.

 

[Juxtapose]

kinda off topic here but I always thought Gears 1 was peak and everything after was luke-warm attempts at keeping the franchise alive. Nobody I know really dug the sequels, so its surprising to hear that Gears 3 is considered the best MP by some degree of people.

Gears of War is considered an excellent game for it's time, but not to the standard of the sequels. Gears of War 2 was regarded as superior in every way overall, an excellent sequel to the original. Gears of War 3 was regarded as the franchises peak, especially in terms of multiplayer.

Personally, as a fan of Campaign and Horde, I really enjoyed the first, loved the sequel, did not like the third at all and abandoned the franchise. Came back to it with Gears of War 4 earlier this year and was susprised by how fantastic The Coalition Gears of War titles are.

 

[Shania Twain]

I get where your coming from but the Pro Tour specifically stated NRS funded Pro Tour and WB is not funding it in any way. It was a disclaimer shown at ECT by NetherRealm

I stand corrected. Although I'm sure it cost a few of the higher ups at NRS just one pay check to fund and them having this there was a smart move to pitch to WBD and gave people work and promoted the brand/game. More tournaments like this should be held around the countries the game is popular so local peeps can go, even if they don't win. I mean wouldn't you love to see me at one and I say "I'm Shania Twain on TYM" only to find out I'm a single gay white blonde male? lol.