Warner Bros. Acquires Remainder of Machinima, Underscoring Studio's Move Into Digital

Time Warner's (TWX) Warner Bros. film studio is getting further into gaming.

In a deal to bolster the studio's digital video offerings, Warner Bros on Thursday said it had acquired the remainder of Machinima, the video gamer enthusiast site that was among the earliest and most popular platforms on Alphabet's (GOOGL) YouTube. The website will become a part of the studio's recently created Warner Bros. Digital Networks, Time Warner said in an emailed statement. It did not disclose terms of the transaction.

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Warner Bros. took stakes in Machinima in 2014 and 2015, investing roughly $42 million in a production house that has become the country's 10th-largest digital video producer, the company said, citing comScore. Machinima's work is often featured on Sony's (SNE)  Playstation Vue, Amazon (AMZN) Prime Video, Verizon's (VZ) Millennial-focused platform go90, China's Sohu (SOHU) and the CW Network, jointly owned by Time Warner and CBS (CBS) .

The deal comes just weeks after AT&T (T) announced an agreement to acquire Time Warner in a cash-and-stock transaction valued at $85.4 billion, and just days before it unveils DirecTV Now, its multichannel streaming service. DirecTV Now will feature a package targeted at mobile users, mostly younger consumers who might also be Machinima followers.

"Machinima also produces great, high-quality content for their community, and together we can create an even more compelling experience and do some really exciting things involving our key franchises, Craig Hunegs, president of the Warner Bros. Television Group, said in the statement. "This acquisition is another meaningful move forward as Warner Bros. develops more direct relationships with our consumers."

As for Machinima, CEO Chad Gutstein described the deal as affording the website a far larger sales and distribution network to continue to grow the website and brand.

"We'll now be able to take full advantage of Warner Bros.' intellectual property, sales and distribution, while still creating content for social and premium digital platforms that gamers and geeks love," Gutstein said. "Plus, we'll be fully embedded and can help Warner Bros. continue their incredible digital marketing successes."

The Machinima management team will remain in place.

Other Machinima investors include Google, MK Capital, Redpoint Ventures, Coffin Capital and Machinima founder Allen DeBevoise, Variety reported.

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