PROVIDENCE, R.I. --
PROVIDENCE, R.I. Hasbro Inc. struggled when the toy company tied its fortunes too closely to toys based on movies. But a movie based on its toys? That could be a different story.
Hasbro is banking that the July 4 release of the DreamWorks/Paramount movie Transformers — based on Hasbro's "robots in disguise" toys introduced in the 1980s — will herald a new era for the company that in the past few years has been remaking itself from a toy maker to an entertainment company.
"Transformers sort of opens another chapter for us," said Brian Goldner, Hasbro's chief operating officer, listed as an executive producer. "In the past, I think that the company may have thought too narrowly about its brands as forms of entertainment."
In 2000, the Pawtucket, R.I.-based company was struggling. The toy maker lost $144 million after fads for Pokémon trading cards and the electronic pet Furby faltered. It cut hundreds of jobs. Then-Chief Executive Alan Hassenfeld called it "a very painful year."
Part of the problem was an overreliance on movie-related toys, like tie-ins to the Star Wars franchise, said Sean McGowan, an analyst with Wedbush Morgan Securities. "They would be hot for a while, then not hot," McGowan said.
So Hasbro's executives went back to basics. They turned their focus to time-tested "core brands," names consumers knew and trusted: Playskool, Monopoly, My Little Pony, Transformers and others. They looked at the brand's core idea and thought of ways to contemporize it and parlay it into new products that would turn the company around and keep it growing.
Since then, they've developed new versions of Monopoly, released a line of Playskool products for CVS drugstores, including diapers and baby bottles, created a My Little Pony live stage show — based on the toy — to name a few.
While Hasbro still does its share of movie tie-ins — Spider-Man 3 and Star Wars, for example — it still has a treasure trove of stable properties, McGowan said.
Another upside for Hasbro is that it owns the Transformer brand, so on most Transformers-related products it doesn't have to pay royalties and can license the name. Hasbro signed up 230 licensees for Transformers the movie, items such as video and cell-phone games, Goldner said.
"The last couple years have been the best years they've had in a very long time," said Jim Silver, editor-in-chief of Toy Wishes magazine.
Hasbro started the year strong, reporting a profit of $32.9 million for the three months that ended April 1, vs. a loss of $4.9 million in the year-ago period. The company credited core brands and strong sales of games, led by Monopoly. Shares surged to an eight-year high, but some analysts have since downgraded their projections, warning that the stock price already factors in the high expectations for Transformers and that sales could slow down next year.
The idea for the Transformers movie started percolating in 2002, when Goldner and his team began re-examining Hasbro's properties for boys. At the time, Spider-Man was making its debut as a live-action, blockbuster movie and Goldner realized Transformers could do the same.
"I looked at Transformers and G.I. Joe as opportunities to enter that same arena," he said. "Three-quarters of now-adult men had played with these products as children."
Hasbro licensed the Transformers to DreamWorks and did not produce the film, but Goldner is listed as a co-executive producer. In contrast, Marvel Studios, a division of Marvel Entertainment, was involved in producing the Spider-Man movies.
Transformers is not the first movie to be based on a toy or game. The 1985 movie Clue took themes and characters from the Hasbro board game. There was an animated Transformers movie in the 1980s (when the Transformers animated TV show and comic books were wildly popular).
But in recent years, toy companies have ramped it up. Marvel has had success with movies based on its comic book characters: Spider-Man, X-Men and Fantastic Four: Rise of the Silver Surfer, the 20th Century Fox film, which debuted as the No. 1 weekend flick last week with $57.4 million in sales, surpassing the $56.1 million opening of Fantastic Four two years ago.
Mattel also has released a series of successful direct-to-DVD movies based on Barbie, Silver said. Later this summer, Lions Gate Films plans to release Bratz, a live-action movie based on the dolls popular with tween girls.
"At the end of the day, Hasbro and some of the other large toy companies realize they're in the entertainment business," Silver said. He describes Hasbro today as "a family entertainment company."
The movie is one of the most anticipated of the summer. It won an MTV Movie Award this month for the best "Summer movie you haven't seen," and is opening on what has traditionally been one of the biggest moviegoing holidays.
"They put their stake down and everybody avoided it," Silver said. "That is the biggest statement of how Hollywood expects the movie to be."
Goldner said Hasbro is now working on a movie based on G.I. Joe, and he won't rule out other Hasbro-related movies down the line.
By MICHELLE R. SMITH
The Associated Press
Posted
June 20 2007
