Warner Bros Buys Gamer-Focused Video Maker Machinima
Warner Bros. Entertainment announced in a press release today that it was buying Machinima Inc., the company best known as a YouTube channel focused on creating original scripted content using in-game video game animation. The amount paid for Machinima was not disclosed, but various online reports including Variety.com put the valuation of Machinima at about $100 million.
According to the press release, Machinima will become part of the new unit called Warner Bros. Digital Networks which was founded in June 2016 and operate as a wholly owned subsidiary company. According to Variety, Warner Bros. was the lead investor in both an $18 million funding round for the company in 2014, and a $24 million follow-on round in 2015. The release quoted CEO Chad Gutstein saying “Since making their first investment in Machinima in 2014, Warner Bros. has been an active business partner in our transformation, so we already have proof points as to how the companies can work together to accelerate Machinima’s growth plans.”
Gutstein goes on to talk about how being “embedded” in Warner Bros. will give it greater access to the parent’s intellectual property, much of which is made up of DC Entertainment content. In addition, Machinima’s first live action hit, Mortal Kombat: Legacy, is based on IP now owned by Warner Bros. How the purchase will affect non-Warner Bros. properties, like Street Fighter: Assassin, is not addressed.
Also still to be made clear is how the new home at Warner Bros. Digital Networks will affect the distribution deals Machinima has made in the past two years as it attempted to expand beyond the ad revenue coming from YouTube-only distribution. According to Variety, those partners include Sony PlayStation Vue, Amazon Prime, Go90 from Verizon, China’s Sohu and the CW Network.
Investors aside from Warner Bros. include Redpoint Ventures, MK Capital, Coffin Capital, and founder Allen DeBevoise in the second round, and MK Capital, Redpoint Ventures, and Google Capital in the first.
