Hasbro, Inc. (HAS) Has Huge Toy Hit Coming With Star Wars Angry Birds 2

Hasbro, Inc. (NASDAQ:HAS)Hasbro, Inc. (NASDAQ:HAS) has long counted on licensing partnerships to help it become one of the two largest toymakers in the United States. The company has seen revenue increase over the last five years on the success of boys and girls toys, and also a growing demand for interactive toys. The company has a partnership that could transform the interactive segment and produce strong returns for shareholders.

Hasbro, Inc. (NASDAQ:HAS) will launch toys in partnership with Rovio’s “Angry Birds Star Wars II.” The game follows up the highly successful “Angry Birds Star Wars”, which has seen more than 100 million downloads. The game will be released Sept. 19 on mobile phones and tablets. For the first time in the Angry Birds game line, interactive toys will be released. Thirty telepods, which are physical versions of characters, will be playable through a phone or tablet’s camera.

The game’s plot will center around the three prequel Star Wars movies. New characters like Mace Windu and Darth Maul will be introduced. (No word yet on if Jar Jar Binks will be included and what power he will have from the slingshot.) As a mobile game, telepods won’t be included and will have to be purchased from physical stores. This gives Hasbro, Inc. (NASDAQ:HAS) the upper hand in interactive gaming.

In the first quarter, Hasbro, Inc. (NASDAQ:HAS) saw revenue increase 2% to $663.7 million. Revenue increased 4% in North America and was relatively flat in international markets. The company’s Angry Birds line was noted as a strong seller in the quarter. Expect strong sales of the Angry Birds line to contribute to fiscal-year revenue and earnings. Hasbro could be in for several strong quarters and should see shares trade higher after results.

In the third quarter, which includes September and initial sales of Angry Bird Star Wars toys, analysts expect Hasbro, Inc. (NASDAQ:HAS) to post revenue of $1.35 billion. This amount is only 0.3% higher than the previous year. I have to think that Hasbro, Inc. (NASDAQ:HAS) could shatter that estimate with strong Angry Bird-related sales. Earnings per share are estimated at $1.29 for the quarter, which could also come in higher with high margin telepod sales.

The telepods will come in packs ranging in price from $5.99 to $39.99. The cheapest will include several figures, while the big packs are being labeled the “Star Destroyer set”, with a possible toy included. The first “Star Wars Angry Birds” game had 100 million downloads. If 25% of users bought a telepod pack, sales would be $150 million. That amount would be split between Hasbro and Rovio, but should boost estimates for the quarter by at least $50 million.

Another interesting point to consider is the recent development from Activision. Rival video-game maker Activision Blizzard, Inc. (NASDAQ:ATVI) will be bringing the first “Star Wars Angry Birds” game to consoles. This move, mentioned on The Motley Fool, should boost product sales from Hasbro and Rovio centered on the first game.

In August, The Walt Disney Company (NYSE:DIS)’s interactive business segment will launch an interactive toy game, “The Walt Disney Company (NYSE:DIS) Infinity.” The game, which was supposed to be released in June, allows customers to purchase additional characters from The Walt Disney Company (NYSE:DIS) and Pixar movies to use as playable characters in the game. The game will be available for consoles.

I wrote about how the launch of “Disney Infinity” could be the savior to Disney’s money-losing interactive division. In fiscal 2012, the interactive business segment posted an operating loss of $0.2 billion. This was the only segment to lose money on the year. Revenue declined 14% to $0.8 billion for Disney Interactive, the company’s smallest segment.

Having interactive toys to use in video games is nothing new. In fact, Activision Blizzard, Inc. (NASDAQ:ATVI) has made quite a large sum of money off of it. Since “Skylanders Spyro’s Adventure” was launched in October of 2011, Activision Blizzard, Inc. (NASDAQ:ATVI) has seen sales of $1 billion from the interactive game.

The game has turned into one released sequel – “Sylanders Giants” – and the upcoming highly anticipated third Skylanders game, “Skylanders Swap Force.” The company saw huge success in releasing a game with several toys and then selling the additional interactive characters as two-packs and three-packs. Sales of the toys were strong on Amazon and Ebay as the company saw overwhelming demand keep supply off the shelves.

Rovio has long been thought of as a one-trick pony with Angry Birds. The company has released several sequels to the highly downloaded mobile game and now entered new territory with Star Wars characters. I expect Rovio to continue to expand the game to other well-known characters. The obvious winner in this is Hasbro. With an already existing deal with Rovio, Hasbro will profit from toys related to the Angry Birds line of games. Future releases could significantly help Hasbro’s sales and reach blockbuster status.

Disney continues to be a great company going forward. Acquisitions of Pixar, Marvel, and Star Wars have added billions of dollars in sales across all business segments. I expect to see strong sales of “Disney Infinity” and think the turnaround of Disney Interactive could help beat analysts’ projections for revenue and profits.

The pressure continues to be on Activision to pump out blockbuster video games. With strong sales of the Call of Duty, Starcraft, Diablo, and World of Warcraft franchises, Activision has found another hit with Skylanders. If sales are strong for “Disney Infinity” in August, Activision shares could drop off due to the competition.

The article Hasbro Has Huge Toy Hit Coming With Star Wars Angry Birds 2 originally appeared on Fool.com and is written by Chris Katje.

Chris Katje is long Activision Blizzard shares. The Motley Fool recommends Activision Blizzard, Hasbro, and Walt Disney (NYSE:DIS). The Motley Fool owns shares of Activision Blizzard, Hasbro, and Walt Disney. Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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