Hasbro 2013 Annual Report Download - page 14

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owned are broadly controlled by the Company, offerings may also include products which are branded and
developed under key licenses. Significant partner brands include BEYBLADE, MARVEL characters including
SPIDER-MAN and THE AVENGERS, ROVIO, SESAME STREET and STAR WARS product offerings. Both
MARVEL and STAR WARS are owned by the Walt Disney Company (“Disney”).
Our innovative product offerings encompass a broad variety of toys including boys’ action figures, vehicles
and playsets, girls’ toys, electronic toys, plush products, preschool toys and infant products, electronic interactive
products, creative play and toy-related specialty products. Games offerings include action battling, board, off-
the-board, digital, card, electronic, trading card and role-playing games.
As part of our brand blueprint, we seek to expand our brands through entertainment, including television
and movies, digital gaming and out-licensing. Hasbro Studios LLC (“Hasbro Studios”), our wholly-owned
production studio, produces television programming primarily based on our brands and distributes such
programming globally. Domestically, Hasbro Studios distributes television programming to Hub Television
Network, LLC (“Hub Network”), a joint venture between the Company and Discovery Communications, Inc.
(“Discovery”), which operates a cable television network in the United States dedicated to high-quality
children’s and family entertainment. Hasbro Studios also distributes television programming internationally to
broadcasters and cable networks as well as on various digital platforms like iTunes and Netflix. In July 2013, the
Company acquired a 70% majority stake in Backflip Studios, LLC (“Backflip”), a mobile game developer, which
allows us to leverage Backflip’s existing and new intellectual properties while also extending our own brands
through mobile digital gaming. Lastly, we license certain of our trademarks, characters and other property rights
to third parties for use in connection with digital gaming, consumer promotions, and for the sale of non-
competing toys and games and lifestyle products, or in certain situations, to utilize them for toy products where
we consider the out-licensing of brands to be more effective.
Product Categories
A key part of our brand blueprint focuses on the importance of reinforcing the storyline associated with our
brands through the use of media-based entertainment, including television, motion pictures and digital media as
well as creating a digital environment for certain products through the use of digital applications and internet
websites. In addition, digital applications have also been created to extend storylines for certain brands and to
interact with certain analog products. While certain media-based entertainment benefit only one particular
product category, others, specifically major motion pictures, can impact more than one product category. In
2012, the Company benefited from significant sales of MARVEL products related to two major motion picture
releases, MARVEL’S THE AVENGERS and THE AMAZING SPIDER-MAN. During 2013, the Company had
product offerings based on theatrical releases of two major motion pictures based on MARVEL properties, IRON
MAN 3 and THOR: THE DARK WORLD; however, sales of MARVEL products experienced a difficult
comparison against the noteworthy success of the products sales based on the 2012 releases. In 2014, the
Company anticipates product offerings based on planned theatrical releases of TRANSFORMERS: AGE OF
EXTINCTION from Paramount Pictures as well as CAPTAIN AMERICA: THE WINTER SOLDIER and
GUARDIANS OF THE GALAXY from Marvel Studios and THE AMAZING SPIDER-MAN 2 from Sony Pictures.
The Company also anticipates sales of STAR WARS product offerings supported by new television
programming, STAR WARS REBELS, developed by Lucasfilm Ltd. (“Lucasfilm”).
We market our brands under the following primary product categories: (1) boys; (2) games; (3) girls; and
(4) preschool toys. Descriptions of these product categories are as follows:
Boys’ franchise brands included the NERF line of sports and action products and TRANSFORMERS action
figures and accessories. Our boys’ category also includes SUPER SOAKER water blasters, G.I. JOE action
figures and accessories and entertainment-based licensed products based on popular movie, television and comic
book characters, such as BEYBLADE tops and accessories and MARVEL and STAR WARS toys and
accessories. In 2013, the TRANSFORMERS brand was supported by an animated television series produced by
Hasbro Studios which was distributed on a global basis. AVENGERS, BEYBLADE, SPIDER-MAN and STAR
WARS products were each supported by animated television series produced and distributed by third parties in
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