Toy-maker, Hasbro Inc. (HAS) is all set to expand its global branded play experiences through several partnerships in the world of gaming. One such alliance was formed last week with Zynga, the world’s largest social game developer with more than 227 million monthly active users.
Under the agreement, Hasbro secured the license to develop and distribute product lines based on Zynga’s game brands. The first joint-venture product will likely be available from fall 2012. Zynga has created some of the world’s most popular social game brands including FarmVille and CityVille, both of which are immensely popular on the social media website Facebook. Hence, Hasbro’s management believes that this strategic partnership will widen its reach in the arena of social games.
Another deal Hasbro sealed last week was with Volumique, a French-based innovator and provider of technologies. The global intellectual property license agreement signed between the duo will give Hasbro the right to deploy Volumique’s proprietary technology in its new line of Hasbro zAPPed Games, based on iconic brands such as BATTLESHIP and MONOPOLY. This technology will likely be introduced in the upcoming release of BATTLESHIP zAPPed, which is due in September 2012.
This is not the end. Hasbro cut yet another deal last week with CBS Consumer Products to manufacture and globally market a variety of products based on the STAR TREK property beginning in 2013.
Growth prospects for Hasbro center around its ability to execute on its growth plan in emerging markets, its focus on core-brands, entertainment and digital gaming and continued product innovation.
We believe, Hasbro’s new arrivals are expected to take the market by storm this year. In 2011, Hasbro launched key initiatives including KRE-O and Sesame Street. KRE-O was introduced in 10 markets worldwide, and garnered a sizable early market share. The company will add 15 new markets by this year-end as well as expand the line to include Battleship, supported by its major motion picture with Universal. And Nerf, which has grown fourfold over the past five years, will likely unveil two major initiatives.
We have noticed that the Games and Puzzle category’s performance has lacked luster in 2011. Hence, we think the above-said pacts are a part of the multi-year plan Hasbro has chalked out to turnaround the category. Hasbro now seeks to stabilize this segment in 2012 and deliver growth in 2013 and beyond.
Hasbro, which competes with the likes of Mattel Inc. (MAT) and JAKKS Pacific Inc. (JAKK), currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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