Ask investors or gamers to name the biggest video game publishers in America, and they'll probably mention Activision Blizzard and Electronic Arts . Fewer people would likely mention Time Warner 's Warner Bros. Interactive Entertainment.
Yet WB Interactive actually became the fastest growing video game publisher in America last quarter, and that growth probably won't stall out anytime soon. Let's take a closer look at what that growth means for Time Warner's future.
Lego Dimensions will merge 14 different franchises -- including Lord of the Rings, Batman, Doctor Who, and Ghostbusters -- in a digital world. To jump on that bandwagon, rival studios are even licensing characters like the Simpsons and the dinosaurs from Jurassic World to WB Interactive.
To place them in that digital world, customers must buy collectible figures which interact with a chip-reading platform. The more figures a customer purchases, the more lively and interesting the virtual world becomes. It's a brilliant tactic which turns a video game into a foundation for hybrid physical/digital purchases. WB's starter kit, which includes three figures and a platform, costs $100. Collecting more figures could easily double or triple the final cost of the game. If Lego Dimensions is a hit, it could also serve as a promotional platform for its top franchises, including the Lego Movie and its multiple spin-offs.
Succeeding where others have failed
Time Warner's success in video games is an anomaly in the media industry. Viacom once invested in the music game Rock Band , but it took a loss of over $260 million on the franchise before selling it in 2010. Disney's Interactive unit only returned to profitability after it was downsized last year.
The growth of WB Interactive has notably offset WB's weaker performance in movies. Last quarter, WB's total revenue rose 15% annually to $3.3 billion and accounted for nearly half of Time Warner's top line. However, theatrical revenues fell 15% due to unfavorable comparisons against The Hobbit: The Desolation of Smaug in the prior year quarter.
As WB struggles to launch new movie franchises to replace multi-year cash cows like Harry Potter , The Lord of the Rings , and The Hobbit , it can fall back on strong video game sales. Based on WB Interactive's current growth trajectory, it could even overtake Activision or EA in terms of total revenues in the near future -- an incredible feat for a business that barely got any attention in previous years.
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Time Warner Inc Sells Video Games Faster Than Activision Blizzard Inc or EA originally appeared on Fool.com.
Leo Sun owns shares of Walt Disney. The Motley Fool owns and recommends Activision Blizzard and Walt Disney. The Motley Fool recommends Time Warner. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .