Hasbro 2011 Annual Report Download - page 36

characters. The third quarter of 2011 commenced the first period of significant sales under the Company’s
license with Sesame Workshop. In 2011, the Company had sales of MARVEL products, including sales of
products related to the Marvel movie releases of THOR and CAPTAIN AMERICA: THE FIRST AVENGER.In
2010, the Company had significant sales of products related to the Marvel movie release of IRON MAN 2. During
2012 the Company will market products related to two expected theatrical motion picture releases based on
MARVEL properties, THE AMAZING SPIDER-MAN and THE AVENGERS. In addition, in the second half of
2010 the Company re-introduced BEYBLADE products, another licensed entertainment property. The Company
has had significant sales of BEYBLADE products in 2011 as well as the second half of 2010. In addition to
offering products based on licensed entertainment properties, the Company also offers products which are
licensed from outside inventors.
The Company also seeks to build immersive brand experiences and drive product-related revenues by
increasing the visibility of its core brands through entertainment such as motion pictures and television
programming. Since 2007, the Company has had three motion pictures based on its TRANSFORMERS brand
and one motion picture based on its G.I JOE brand released by major motion picture studios. This includes the
release of the third TRANSFORMERS motion picture, TRANSFORMERS: DARK OF THE MOON, in 2011. The
Company developed and marketed product lines based on these motion pictures. The next motion pictures based
on the Company’s properties are BATTLESHIP, which is scheduled to be released in 2012 by Universal Pictures,
and G.I. JOE: RETALIATION, which is scheduled to be released in 2012 by Paramount Pictures. The Company
has motion picture projects based on other brands in development for potential release in future years.
In addition to using motion pictures to provide entertainment experiences for its brands, the Company
established Hasbro Studios, an internal wholly-owned production studio, in 2009. Hasbro Studios is responsible for
the creation and development of television programming based primarily on Hasbro’s brands. This programming is
currently aired throughout the world. The Company is a 50% partner in a joint venture with Discovery
Communications, Inc. (“Discovery”) which runs THE HUB, a cable television network in the United States
dedicated to high-quality children’s and family entertainment and educational programming. Programming on THE
HUB includes content based on Hasbro’s brands, Discovery’s library of children’s educational programming, as
well as programming developed by third parties. Hasbro Studios programming is distributed in the U.S. exclusively
to THE HUB while programming internationally is distributed to leading children’s networks around the world. The
Company’s television initiatives support its strategy of growing its core brands well beyond traditional toys and
games and providing entertainment experiences for consumers of all ages in any form or format.
The Company’s strategic blueprint also focuses on extending its brands further into digital media and
gaming, including through the licensing of the Company’s properties to a number of partners who develop and
offer digital games based on those brands. An example of these digital gaming relationships is the Company’s
agreement with Electronic Arts Inc. (“EA”), which provides EA the exclusive worldwide rights, subject to
existing limitations on the Company’s rights and certain other exclusions, to create digital games for all
platforms, such as mobile phones, gaming consoles and personal computers, based on a number of the
Company’s intellectual properties, including MONOPOLY, SCRABBLE, YAHTZEE, NERF, TONKA and
LITTLEST PET SHOP. Similarly, the Company has an agreement with Activision under which Activision offers
digital games based on the TRANSFORMERS brand. The Company continues to seek and develop additional
outlets for its brands in digital gaming, including casual, mobile and online gaming.
In recent years the Company has expanded its lifestyle licensing business, and this remains a key area of
focus for future development and growth. Under its lifestyle licensing programs, the Company enters into
relationships with a broad spectrum of apparel, food, bedding and other lifestyle products companies for the
global marketing and distribution of licensed products based on the Company’s brands. These relationships
further broaden and amplify the consumer’s ability to experience the Company’s brands.
As the Company seeks to grow its business in entertainment, licensing and digital gaming, the Company
will continue to evaluate strategic alliances and acquisitions which may complement its current product
offerings, allow it entry into an area which is adjacent to or complementary to the toy and game business, or
allow it to further develop awareness of its brands and expand the ability of consumers to experience its brands in
different forms and formats.
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