There was a time, not so very long ago, when toy companies primarily made toys and board games. Take Hasbro: The owner of such iconic brands as Monopoly and Sorry! did well by selling simple experiences made of plastic and cardboard, and fanciful playthings around which children would create whole worlds in their imaginations.
Hasbro today, however, looks nothing like the the game maker of old. Although it's paired toys with movies for decades, these days, it's thinking more about other screens than plastic figurines.
In an investor presentation last week, the company outlined how it wants to develop all its brands into multi-channel "franchises," complete with movie development, video games, and mobile apps. CEO Brian Goldner described it this way:
In practice, here is how it plays out. It begins with TV but goes beyond commercials to include storytelling and content, film and television programming on all screens. First, we drive the scale and reach of our branded message to get them to like us. Next, we create more interaction through digital ads, exclusive video content, games or social media, to move the consumer from like to love. And finally, if we have done our job right, they want the product.
The model is Transformers, which has made about $500 million in toy sales and royalties off each installment in the blockbuster film series -- that was a huge chunk of the company's $4.08 billion in revenues in 2013 (meanwhile, Mattel is struggling to catch up). "Transformers" isn't a movie, really, as much as it is an extended infomercial. "Michael is truly an incredible partner and a friend, and a most innovative brand steward," said Goldner, of director Michael Bay.
That brand stewardship has helped shift most of Transformers' revenue into entertainment:
That's also why the company announced last month that it's developing a movie franchise around Magic: The Gathering, the card game that has a fanatical fan following but not much in the way of media development. Films can only have so many sequels, after all, before petering out -- so Hasbro needs to keep the pipeline full.
The problem is, not every popular toy really lends itself to big or small screens -- Furbies and Play-Doh, for example, are some of Hasbro's best sellers. And it would take a lot of imagination to build a plot line or a game structure around those.