Hasbro, Inc. (HAS): Does This Mobile Game Acquisition Make Sense?

Page 1 of 2

Hasbro, Inc. (NASDAQ:HAS)On July 8, toy maker Hasbro, Inc. (NASDAQ:HAS) announced the acquisition of a 70% stake in privately held mobile game company Backflip Studios. You may ask: Why would a toy company that owns some of the most rock solid iconic brands from G.I. Joe to Transformers want to buy a company operating in an unproven industry such as mobile gaming? That’s a good question. Let’s examine….

Fickle market

You’re right in the fact that mobile gaming lies in unproven frontier territory. Moreover, mobile gaming represents a luxury that people can live without paying for. Mobile gaming company Zynga Inc (NASDAQ:ZNGA) provides evidence of this fact.

Zynga Inc (NASDAQ:ZNGA) experienced a decline in revenue of 18% along with a 30% decline in monthly unique players in its most recent quarter. The company decided to bring in a new CEO, Don Mattrick from Microsoft Corporation (NASDAQ:MSFT) to try and straighten things out.

A number of people believe that mobile gaming represents the future of video gaming altogether. Video game maker Electronic Arts Inc. (NASDAQ:EA) showed losses from 2009 to 2011 and showed profit margins of less than 3% for fiscal years 2012 and 2013. However, the company showed “significant” increases in internet and mobile derived products to the tune of 24%.

Skills and marketing acquisition

Recently, Hasbro, Inc. (NASDAQ:HAS) entered into an agreement with Electronic Arts Inc. (NASDAQ:EA) to develop mobile games for popular traditional board games such as Monopoly, Scrabble, and Battleship. However, this leaves Hasbro, Inc. (NASDAQ:HAS) out in the cold when it comes to the intricacies of developing games pertaining to its other brands.

Hasbro, Inc. (NASDAQ:HAS)’s subsequent acquisition of Backflip Studios represents an effort on its part to gain skills in an area that could prove useful in moving forward with its brand blueprint. This gives the company greater control in the areas of utilizing mobile gaming to advance its branding initiatives and improving the chances of adding value to its brands. In addition, Hasbro, Inc. (NASDAQ:HAS) has inherited a new set of popular mobile gaming brands.

The financials weren’t disclosed but Hasbro, Inc. (NASDAQ:HAS) had this to say about Backflip, “Backflip Studios has become one of the fastest growing and most profitable mobile game studios with more than 300 million downloads of its popular games.” This gives indication that Backflip’s financials lay on more solid footing.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!