Hasbro Profile
Hasbro, Inc. (Hasbro) operates as a play and entertainment company.
Hasbro delivers engaging brand experiences for global audiences through gaming, consumer products and entertainment, with a portfolio of iconic brands, including MAGIC: THE GATHERING, DUNGEONS & DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG, as well as premier partner brands.
Hasbro is guided by the company’s purpose to create joy and community for all people around the world, one game, one toy, one story at a time.
For more than a decade, the company has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media, one of the World’s Most Ethical Companies by Ethisphere Institute and one of the 50 Most Community-Minded Companies in the U.S. by the Civic 50.
Brand Portfolios
In 2022, the company organized and marketed owned, controlled and licensed intellectual properties within its brand architecture under the following five brand portfolios, such as Franchise Brands; Partner Brands; Hasbro Gaming; Emerging Brands; and TV/Film/Entertainment.
Franchise Brands: Key brands include MAGIC: THE GATHERING; NERF; PLAY-DOH; PEPPA PIG; TRANSFORMERS; MONOPOLY; MY LITTLE PONY; and BABY ALIVE.
Includes the company’s flagship owned or controlled brands, which can deliver significant revenues, profits and growth over the long term.
In 2022, MAGIC: THE GATHERING benefited from a number of successful card set releases, including Kamigawa: Neon Dynasty, Double Masters 2022, Dominaria United, Streets of New Capenna, Commander Legends: Battle for Baldur's Gate and The Brother's War.
The PEPPA PIG brand growth was supported by a full year of revenue from Hasbro’s own PEPPA PIG product line, launched in the second half of 2021.
In November 2022, partnering with Nickelodeon and Paramount, the company released the computer-animated television series Transformers: EarthSpark on Paramount+, as well as a new related TRANSFORMERS product line.
PLAY-DOH holiday feature item Play-Doh Ice Cream Truck was a strong performer in 2022.
Partner Brands: Key brands include MARVEL, including SPIDER-MAN and THE AVENGERS; LUCASFILMS' STAR WARS; BEYBLADE; FORTNITE; GHOST BUSTERS; and INDIANA JONES.
Includes those brands the company licenses from other parties for which it develops toy and game products. Partner brand revenues fluctuate based primarily on the entertainment releases around these brands in any given year.
The company holds global toy and game licensed merchandise rights for major Disney entertainment properties Marvel and Star Wars, each for multi-year terms. The company’s products were also supported by numerous streaming and broadcast television series of its partners.
Hasbro Gaming: Key brands include DUNGEONS & DRAGONS; DUEL MASTERS; JENGA; OPERATION; CONNECT 4; CLUE; THE GAME OF LIFE; TWISTER; TRIVIAL PURSUIT; and many others.
Includes the company’s face-to-face and digital game experiences played as board, off-the-board, digital, card, electronic and role-playing games.
In 2022, Hasbro acquired D&D Beyond, the premier digital content platform for DUNGEONS & DRAGONS. New fall introductions included: Connect 4 Spin, Wordle: The Party Game and Clue Escape.
Emerging Brands: Key brands include PJ MASKS; FURREAL FRIENDS; POWER RANGERS; STARTING LINEUP; GI JOE; SUPER SOAKER; POTATO HEAD; PLAYSKOOL; and LITTLEST PET SHOP.
Includes those brands the company owns or controls, which have not yet grown to the significance of a franchise brand, many of which it could be potential franchise brands. The company also launches new brands in this portfolio. During September 2022, Hasbro re-launched its line of sports collectibles from STARTING LINEUP with its NBA series and announced plans to expand the product line with an NFL partnership.
TV, Film & Entertainment: eOne programming includes Television Series, such as Yellowjackets, Cruel Summer, The Rookie, and The Rookie: Feds; Film, such as Deep Water and The Woman King; and eOne also has numerous TV and Film distribution rights, including Stillwater and Fear The Walking Dead.
Includes all film, TV and other entertainment related revenues that are not Hasbro-branded.
On November 17, 2022, the company announced that the Hasbro's Board of Directors authorized the initiation of a marketing process of certain parts of its eOne TV and film business not directly supporting the company’s Branded Entertainment strategy. Hasbro will continue to develop and produce animation, digital shorts, scripted TV and theatrical films for audiences related to core Hasbro IP.
Brand Portfolio Realignment
Effective for the first quarter 2023, the company is realigning its brand portfolios to correspond with the evolution of its Blueprint 2.0 strategy. The company plans to focus on fewer, bigger, more profitable brands that showcase its leadership in preschool, games, creativity, outdoor and action brands.
The company’s new product categories beginning in the first quarter of 2023 are as follows:
Franchise Brands - A refreshed group of the company’s most profitable brands that includes PEPPA PIG, TRANSFORMERS, MAGIC: THE GATHERING, DUNGEONS & DRAGONS, PLAY-DOH, NERF and HASBRO GAMING as a whole.
Partner Brands - The Partner Brands category will continue to include those brands the company licenses from other parties, such as Disney's STAR WARS and MARVEL, as well as other partners, for which the company develops toy and game products, however it intends to concentrate on those key Partner Brands that give it the biggest growth potential and where it can lead and innovate in the category.
Portfolio Brands - The company’s Portfolio Brands category will include those brands the company owns or controls which it feels has upside in revenue and profitability that have not yet grown to the significance of a franchise brand.
Reportable Segments
The company operates through Consumer Products; Wizards of the Coast and Digital Gaming; and Entertainment segments.
Consumer Products
This segment engages in the sourcing, marketing and sales of toy and game products around the world. The company’s Consumer Products business also promotes its brands through the out-licensing of its trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products, such as toys and apparel. Additionally, through license agreements with third parties, it develops and sells products based on popular third-party brands.
The company’s toy and game products are supported by cross-functional teams including members of its global development and marketing groups. The company’s global development teams develop, design and engineer new products alongside the redesign of existing products, driven by its understanding of consumers and using marketplace insights while leveraging opportunistic toy and game lines and licenses. The company’s global marketing function establishes a cohesive brand direction and assists its selling entities in establishing local marketing programs. This strategy leverages efforts to increase consumer awareness of the company’s brands through the company's entertainment experiences, including film and television programming and digital gaming.
As of December 25, 2022, the company had offices supporting its Consumer Products business in more than 35 countries contributing to sales in more than 120 countries.
Wizards of the Coast and Digital Gaming
This segment engages in the promotion of the company’s brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast properties.
Wizards of the Coast offerings include popular games, such as the collectible card game MAGIC: THE GATHERING and the fantasy tabletop role-playing game DUNGEONS & DRAGONS, as well as other digital games developed for mobile devices, personal computers and video gaming consoles including Magic: The Gathering Arena. Additionally, the company out-licenses certain of its brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.
Entertainment
This segment engages in the development, production, distribution and sale of world-class entertainment content, including film, scripted and unscripted television, children's programming, digital content and live entertainment.
Film and TV operations produce film and television content, which is sold worldwide to distributors, broadcasters, television networks and streaming platforms with an increasing focus on Hasbro branded entertainment. While maintaining ownership of the content rights, the company sells content for specific time periods to generate broadcast license fees from television content and to collect minimum guarantees and overage participations from films.
Feature length film and television programming based on the company’s owned and controlled brands provide both immersive storytelling and the ability for its consumers to enjoy these properties in different formats, which also drives product sales, results in increased licensing revenues, and expands overall brand awareness.
Competition
The Discovery Family Channel, the company’s cable television joint venture with Discovery Communications, Inc. in the U.S., competes with a number of other children’s television networks for viewers, advertising revenue and distribution fees.
Seasonality
As a result, the company launched incremental year-over-year promotional activity behind key holiday toy and game items to reduce inventory on hand and at retail and is continuing to manage inventory levels to ensure adequate supply of new product while clearing excess supply to mitigate the risk of inventory obsolescence. Historically, the company commits to the majority of its inventory production and advertising and marketing expenditures for a given year, prior to the peak fourth quarter retail selling season. The company’s accounts receivable balances typically increase during the third and fourth quarters as customers increase their purchases to meet expected consumer demand in the holiday season. Due to the concentrated timeframe of this selling period, payments for these accounts receivable are generally not due until later in the fourth quarter or early in the first quarter of the subsequent year (year ended December 25, 2022).
The company’s entertainment business is also subject to seasonal variations based on the timing of film, television, streaming and digital content releases, which are often determined based on the timing of prime television seasons, certain geographic release dates and competition in the market.
Marketing and Sales, Customer Concentration and Advertising
Marketing and Sales
While the company’s global development function focuses on brand and product innovation and re-invention, its global marketing function establishes brand direction and messaging and assists the selling entities in establishing local marketing programs. The global marketing group works cross-functionally with the global development function to deliver unified, brand-specific consumer experiences. In addition to the global marketing function, the company’s local selling entities employ sales and marketing functions responsible for local market activities and execution.
The company’s products are sold globally to a broad spectrum of customers, including mass-market retailers, distributors, wholesalers, discount stores, specialty hobby stores, drug stores, mail order houses, catalog stores, department stores and other traditional retailers, large and small, as well as ecommerce retailers and direct-to-customer through its fan-focused Hasbro Direct business. The company’s own sales forces account for the majority of sales of its products with remaining sales generated by independent distributors who, for the most part, sell its products in areas of the world. The majority of the company’s product sales are to large chain stores, distributors, e-retailers and wholesalers.
Customer Concentration
During 2022, net revenues from the company’s top five retail customers accounted for approximately 35% of its consolidated global net revenues, including its largest customers, Wal-Mart Stores, Inc. and Amazon.com who represented 11% and 10%, respectively, of consolidated global net revenues. Net revenues from the company’s major customers are reported within the Consumer Products segment, Wizards of the Coast & Digital Gaming segment and the Entertainment segment.
Advertising
The company advertises many of its products extensively and brands through digital marketing and on television.
The company’s Blueprint 2.0 strategy includes focusing on reinforcing storylines associated with its brands through several mediums, including television, film, digital gaming and live action experiences. The company’s brands obtain marketing and advertising support through entertainment appearing on major networks globally, theatrical releases as well as on various other digital platforms, such as Netflix and Apple TV. A recent example of this was the November 2022 release of the computer-animated television series Transformers: EarthSpark on Paramount+ in partnership with Nickelodeon and Paramount.
Many of the company’s new toy and game products are introduced to major customers within one to two years leading up to their year of retail introduction. The company’s advertising expenditures are impacted by its product mix in any given year. For example, brands based on major motion picture releases generally require less advertising as a result of the promotional activities around the motion picture release, whereas leading into a major digital gaming launch, the company’s Wizards of the Coast business will have substantial increases to advertising, marketing and promotional expenses to acquire players and promote gaming releases.
Producing, marketing and distributing films and television programming can involve significant costs and the timing of a film’s release can cause its financial results to vary.
Product Development
For the year ended December 25, 2022, the company’s product development expense totaled $307.9 million.
Government Regulation
The company’s toy and game products sold in the United States are subject to the provisions of The Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, (as amended, the CPSIA), The Federal Hazardous Substances Act (the FHSA), The Flammable Fabrics Act (the FFA), and the regulations promulgated thereunder. In addition, a few of the company’s products, are also subject to regulation by the Food and Drug Administration.
The company’s Human Rights and Ethical Sourcing program is dedicated to ensuring that facilities involved in the production of its toys and games, or licensed consumer products, comply with the company’s Global Business Ethics Principles. The company’s business is subject to other regulations, such as the General Data Protection Regulation in the European Union, which restricts the collection, use, and retention of personal information, as well as data protection laws in the United States and other countries. The company plans to comply with applicable regulations and directives of the Investment Canada Act and the Minister of Canadian Heritage.
History
Hasbro, Inc. was founded in 1923. The company was incorporated in 1926.
