Hasbro 2012 Annual Report Download - page 14

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U.S. and Canada
This segment engages in the marketing and sale of our product categories in the United States and Canada.
The U.S. and Canada segment’s strategy is based on promoting our brands through innovation and reinvention of
toys and games. This is accomplished through introducing new products and initiatives driven by consumer and
marketplace insights and leveraging opportunistic toy and game lines and licenses. This strategy leverages off of
efforts to increase consumer awareness of the Company’s brands through entertainment experiences such as
motion pictures, television, publishing and digital gaming. Major 2012 brands and products included MAGIC:
THE GATHERING, MARVEL products, NERF, BEYBLADE products, STAR WARS products,
TRANSFORMERS, PLAY-DOH, FURBY, FURREAL FRIENDS and PLAYSKOOL.
International
The International segment engages in the marketing and sale of our product categories to retailers and
wholesalers in most countries in Europe and Latin and South America as well as in the Asia Pacific region and
through distributors in those countries where we have no direct presence. In addition to growing brands and
leveraging opportunistic toy lines and licenses, we seek to grow our international business by continuing to
expand into Eastern Europe and emerging markets in Asia and Latin and South America. We have offices in
more than 35 countries contributing to sales in more than 120 countries. In recent years, we expanded our
operations by opening offices in Brazil, Peru, Colombia, China, Russia, the Czech Republic and Korea. We plan
to continue to expand operations in emerging markets in future years through continued investment. Key
international brands for 2012 included MARVEL products, NERF, BEYBLADE products, PLAY-DOH,
LITTLEST PET SHOP, FURREAL FRIENDS, TRANSFORMERS, MONOPOLY, STAR WARS products,
PLAYSKOOL, MY LITTLE PONY and MAGIC: THE GATHERING.
Entertainment and Licensing
Our Entertainment and Licensing segment includes our lifestyle licensing, digital gaming, movie, television
and online entertainment operations. Our lifestyle licensing category seeks to promote our brands through the
out-licensing of our intellectual properties to third parties for promotional and merchandising uses in businesses
which do not compete directly with our own product offerings, such as apparel, publishing, home goods and
electronics.
Our digital gaming category seeks to promote our brands through the out-licensing of our intellectual
properties to a number of partners who develop and offer digital games for play on mobile devices, personal
computers, and video game consoles based on those brands. Our agreement with Electronic Arts Inc. (“EA”),
which provides EA the exclusive worldwide rights, subject to existing limitations on our rights and certain other
exclusions, to create digital games based on a number of our intellectual properties, including MONOPOLY,
SCRABBLE, YAHTZEE and GAME OF LIFE, is one example of these digital relationships. Similarly, we have
an agreement with Activision under which Activision offers digital games based on the TRANSFORMERS
brand. We also partner with DeNA for mobile games based on the TRANSFORMERS brand, GameLoft for
mobile games based on MY LITTLE PONY and LITTLEST PET SHOP brands, Jagex for an online
TRANSFORMERS game for Western Markets, and with Callaway Digital Arts for the MR. POTATO HEAD
mobile app. We also license our brands to third parties engaged in other forms of gaming.
To support our strategic objective of further developing our brands through television entertainment, we
established a wholly-owned television studio, Hasbro Studios, which produces television programming primarily
based on our brands, which is distributed on a global basis. In addition, Hasbro Studios has a coordinated
development process which aligns with our 50% interest in a joint venture with Discovery that operates a
television network in the United States, THE HUB. THE HUB is dedicated to providing high-quality children’s
and family entertainment and educational programming.
In addition to the above, we also seek to promote and leverage our brands through major motion pictures. In
July 2011, TRANSFORMERS: DARK OF THE MOON, the third major motion picture based on the
TRANSFORMERS brand, was released. In May 2012, BATTLESHIP was released by Universal Pictures. In
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