Hasbro 2009 Annual Report Download - page 5

Our digital games business grew with partners Electronic Arts (EA) and Activision. We also delivered a
strong result with MAGIC: THE GATHERING trading card games.
However, several areas of our business were impacted by the decision not to carry forward a number
of high-priced products from 2008. Both KOTA and the ROSE PETAL COTTAGE line were not carried
forward into the 2009 preschool line and we decided not to market several products in the FURREAL
FRIENDS line, which created di cult year-over-year comparisons.
Despite challenging conditions in the market place, our global teams executed our core brand strategy,
delivering a strong year and positioning Hasbro for continued growth in future years.
BRAND ACTIVATION ACROSS PLATFORMS
We continued the activation of our brands across platforms, growing revenues in lifestyle licensing and
digital gaming through both the strength of our movie-backed properties, TRANSFORMERS and G.I.
JOE, as well as the continued expansion of core brands, such as MONOPOLY and LITTLEST PET SHOP,
outside traditional toys and games. In fact, our Entertainment and Licensing segment reached $155
million in revenue during the year, growing 44% from 2008.
EA and Activision continued the proliferation of Hasbro brands in the digital arena in 2009. Activision’s
Transformers: Revenge of the Fallen video game was the number one movie game in 2009. Since our
fi rst digital games from EA hit the market in 2008, EA has sold at retail eight million units of Hasbro
branded digital games. In 2009, EA successfully launched games for brands from LITTLEST PET SHOP
to TRIVIAL PURSUIT to NERF to FAMILY GAME NIGHT. For mobile users, Hasbro brands, including
BATTLESHIP, MONOPOLY and SCRABBLE, were top-grossing titles on the iPhone App Store during the
2009 holiday season and both MONOPOLY and SCRABBLE have remained in the top 50 consistently
since launch.
With great family and casual brands such as these, EA and Hasbro are well positioned to leverage the
evolution underway in the digital gaming market place, as mobile and online games grow to represent a
larger portion of the total digital gaming opportunity.
MAXIMIZING BRANDS THROUGH ENTERTAINMENT
Our core brand strategy also involves maximizing our brands through entertainment. As mentioned
previously, in 2009, we made key strides in entertainment.
In television, we partnered with Discovery Communications (Discovery) to form a new children’s
television network, THE HUB, scheduled to launch in the fall of 2010. We paid $300 million to purchase
50% of the existing Discovery Kids television network, which is being rebranded as THE HUB, and are
partnering with Discovery and the newly-hired team under the leadership of Margaret Loesch, an award-
winning children’s television veteran, to deliver programming to entertain, enrich, educate and empower
children and their families.
To further support this endeavor, we established Hasbro Studios and brought industry veteran Stephen
Davis on board to lead this e ort. Hasbro Studios is developing compelling programming based on
Hasbro brands, such as TRANSFORMERS and MY LITTLE PONY – both of which are scheduled to be on
THE HUB when it launches in the fall of 2010. Since we own the programs we develop, we plan to license
this programming not only to the JV network in the U.S., but also to international television channels
around the globe, expanding the brand experience and the revenue opportunity.
Hasbro’s partnership with Discovery provides our brands with yet another powerful entertainment tent
pole. We see television as a keystone to our brand strategy and ultimately, the reason why we decided