MARCH 25, 2013 • Later this year Warner Bros. Interactive Ent. (WBIE) will open a new studio dedicated to developing and publishing free-to-play mobile, social and browser-based games from the Bay Area. WB Games San Francisco will be headed by senior vice president of digital games Greg Ballard. Ballard is a veteran of the games industry, with stints as chief executive at Glu Mobile and 3Dfx Interactive, among others. The new Northern California studio will not only be tasked with creating mobile content, it will also oversee publishing of all other mobile games developed within WBIE.

Impact: Whether through acquisitions or outside partnerships, Warner Bros. Interactive has made a succession of smart moves in recent years. We have been pleasantly impressed at the division’s patience and restraint at managing its growing portfolio of digital franchises. That is not something we are used to seeing from motion picture studios during the last 20 years where rashly jumping into the games business before hastily retreating soon after is the norm.

WBIE has gotten high marks for its game franchises like Batman.

The bedrock under WBIE this go round is marketing quality content that consumers actually want to play. Both the Batman and Lego franchises readily come to mind. Sure, the focus is primarily on studio IP, but that is fine as long as the quality is there. That’s why we are optimistic about WBIE’s new mobile studio. Mobile is a tough segment to make money at with the flood of content bombarding consumers. The social and browser segments are over-saturated with content, as well. In an environment when operating expenses must be kept lean to make money off of customers not given to spending a lot of cash on their mobile games, especially Android smartphone owners, establishing a costly mobile headquarters would normally strike us as potentially excessive overhead. Yet WBIE’s past focus on patience and quality leads us to the conclusion that the division likely intends to manage its growing mobile slate with as much care as its console side. Nestling next door to Apple, Facebook and Google is also a smart strategy. Yet even the best intentions may end up beached on the rocks ringing of San Francisco Bay given the current odds against profiting big from mobile game publishing. Time will tell.