Netflix will acquire Warner Bros. in a cash-and-stock transaction valued at $27.75 per share — roughly $82.7 billion in total — with the deal expected to close by Q3 2026, the company announced.

The acquisition transfers Warner Bros.' entire video game operation to Netflix alongside the film and television business. Nine studios are affected: Avalanche Software, NetherRealm Studios, Portkey Games, Rocksteady Studios, TT Games, WB Games Boston, WB Games Montréal, WB Games New York and WB Games San Francisco.

That roster makes Netflix an overnight player in premium game development. NetherRealm carries Mortal Kombat, one of the best-selling fighting franchises in the industry. Rocksteady built the Batman: Arkham series. Avalanche Software develops Hogwarts Legacy, which shipped past 20 million units in its first year under the Portkey label tied to the Harry Potter IP. TT Games handles the LEGO game catalogue, and WB Games Montréal delivered Gotham Knights in 2022.

The deal gives Netflix something its internal games strategy has lacked since the company began pushing into interactive entertainment in 2021: proven AAA development capacity and, more importantly, control of licensed IP with a century of brand equity. Netflix has so far built its games offering around mobile titles bundled with subscriptions — including ports and licensed adaptations of its own properties such as Stranger Things and Squid Game — plus a handful of studio acquisitions aimed at original content. Adding nine studios with shipped console and PC titles changes the scale of that ambition entirely.

Whether Netflix retains all nine studios is an open operational question the announcement does not address. Tech and media mega-acquisitions routinely trigger portfolio reviews, divestitures and headcount restructuring as the buyer hunts for synergies. Netflix says it expects to realize at least $2-3 billion in annual cost savings by the third year after closing, and that the deal will be accretive to GAAP earnings per share by year two — targets that will pressure every cost line, including studio operations.

"Our mission has always been to entertain the world," said Ted Sarandos, co-CEO of Netflix. "By combining Warner Bros.' incredible library of shows and movies — from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends — with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we'll be able to do that even better."

Co-CEO Greg Peters framed the deal as a long-term growth play: "This acquisition will improve our offering and accelerate our business for decades to come. With our global reach and proven business model, we can introduce a broader audience to the worlds they create — giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders."

Warner Bros. Discovery President and CEO David Zaslav cast the merger as continuity for the studio's catalogue. "By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world's most resonant stories for generations to come," he said.

Netflix says it will maintain Warner Bros.' current operations, including theatrical film releases, and plans to expand U.S. production capacity while growing original content investment. For developers and publishers across the industry, the implications cut several ways: a new first-party publisher with subscription economics enters AAA, licensing deals tied to WB IP (DC, Harry Potter, LEGO) gain a deep-pocketed owner, and competitors now face a combined entity controlling both the largest streaming platform and one of Hollywood's largest content libraries.

The transaction still requires regulatory clearance and shareholder approval before the projected Q3 2026 close — the regulatory review timeline, particularly around content-market concentration, is the signal worth watching.