While the $111 billion merger with Warner Bros. Discovery Inc. comes under regulatory scrutiny, David Ellison is quietly positioning Paramount Skydance Corp. to compete for the latest attention magnet in entertainment: video games.
The Hollywood-based media powerhouse announced June 5 it will combine Skydance Interactive and Skydance New Media into a unified gaming studio with Paramount’s intellectual property, Variety first reported. The new entity, named Paramount Games Studio, would mark a shift from the conglomerate’s previous majority practice of licensing IP to third party gaming developers and instead make its own games directly from the home base.
Variety confirmed that backlogs from Skydance New media, including “Marvel 1943: Rise of Hydra” and an untitled Star Wars game, are still in development. The new studio also announced its first project – “Teenage Mutant Ninja Turtles: The Last Ronin” – at Hollywood’s Dolby Theater during Summer Game Fest June 5. Tony Driscoll, who concurrently serves as head of corporate strategy and development, would helm the new division along with Skydance executives Dan Prigg and Shawn Kittelsen.
“This division launch marks a meaningful evolution in how we think about games – not as an extension of our business, but as a core pillar of our content strategy alongside film, television and streaming,” Driscoll told Variety.
Industry trends
The gaming pie grows larger still. Statista data shows that the worldwide gaming market generated almost $522.5 billion in 2025, while San Francisco-based market research firm Grand View Research projected the market to reach more than $600.7 billion by 2030. Other entertainment companies have joined suit in capitalizing on gaming IP, including Warner Bros. Pictures who last year produced the $960 million blockbuster “A Minecraft Movie.” Netflix Inc. also rolled out its own mobile games based on popular IP, such as “Stranger Things,” in 2021.
While profitable, the gaming industry is seeing some headwinds. The Walt Disney Co.’s close collaborator Epic Games Inc. slashed over 1,000 jobs in March to cope with a “downturn” in its flagship game “Fortnite.”
“This layoff, together with over $500 million of identified cost savings in contracting, marketing, and closing some open roles puts us in a more stable place,” Epic Chief Executive Tim Sweeney said in an announcement to staff. “Some of the challenges we’re facing are industry-wide challenges: slower growth, weaker spending, and tougher cost economics; current consoles selling less than last generation’s; and games competing for time against other increasingly engaging forms of entertainment.”
