Hasbro 2006 Annual Report Download - page 7

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Strategic Licenses
Being opportunistic and leveraging the “right” licenses have also
contributed to our success during the past several years and will be a
key focus going forward. STAR WARS and MARVEL are two of our best
examples. STAR WARS was the #1 property in the boys' business for
the second year running and continues to demonstrate its long term
viability. Revenue for the entire STAR WARS line was $285 million in
2006, compared to $494 million in 2005, showing
that an entertainment brand layered with new
innovation can perform signifi cantly in a
year following the movie. We expect
STAR WARS to continue to make a
meaningful contribution to our
overall performance in the years ahead,
as the brand is scheduled to appear on major network television in 2008
via an all-new animated series and in 2009 as a live-action series. We also
expect our multi-year license with Marvel to contribute to our leadership in
the boys’ category with properties such as GHOST RIDER, SPIDER-MAN and
FANTASTIC FOUR, all supported by major motion pictures in 2007, and movies
for THE INCREDIBLE HULK and IRON MAN in 2008. Importantly, we see a
signifi cant opportunity in tapping the underleveraged SPIDER-MAN collector
business with an aggressive program using the Marvel ORIGINS brand.
Stretching Our Boundaries
We are constantly looking for ways to grow our business and
enter new categories and markets by stretching the boundaries beyond what we
know as traditional toys and games. Some recent examples highlighting our efforts
include growth in emerging markets, TOOTH TUNES and digital gaming. Today, our
emerging markets business represents a relatively small portion of our revenue base
which means we have a signifi cant growth opportunity in the years ahead. Initially,
we would expect our expansion to be more focused in countries like Brazil, Argentina,
India, China, Poland, Hungary and the Czech Republic and follow very closely the
expansion plans of our global partners including Wal-Mart, Toys “R” Us, Carrefour,
Metro and Tesco. TOOTH TUNES is a musical toothbrush that encourages kids to brush
for the full two minutes (dentist recommended) while enjoying their favorite music
– in their head! TOOTH TUNES has enabled us to expand beyond the traditional toy
and game aisles at retail and is being hailed by dentists as one of the best innovations