HBO Entertainment, which produces HBO and Cinemax video games, is losing money for the first time in seven years.
Its quarterly net income fell $2.2 billion to $9.2 million, the company reported on Tuesday, down from $11.2 in 2015.
The loss was primarily due to the $1.1 billion cost of operating a video game business, the report said.
“The company is also facing a decline in net income attributable to our video games division as the games market has shifted away from traditional video game titles and more toward new and innovative interactive entertainment,” it said.
The company said it expects the loss to come in the fourth quarter, with a more detailed financial outlook to be released in the coming months.
“We are very happy with the performance of the video games business, which has grown in scale, revenue and customer base,” HBO CEO Michael Lombardo said in a statement.
“However, we have experienced a decline and our business is in a downward spiral.
We believe that in the longer term, this is a necessary correction to better serve our customers.”
HBO is part of Time Warner, which owns The CW.