Yet Another Gaming Deal for Hasbro

Toy maker Hasbro Inc. (HAS) recently added another feather in its crown by signing a deal with Paris-based digital gaming company Ubisoft Entertainment SA. Per the deal, Ubisoft will develop and publish current and next-generation console games based on a few of Hasbro’s popular gaming brands, including Monopoly, Scrabble (in the US and Canada only), Trivial Pursuit, Risk, Battleship and Cranium. Financial terms and conditions of the deal have not been disclosed yet.

Why Ubisoft?

Ubisoft is a recognized name in the console gaming arena. It develops, publishes and distributes video games for portable and home consoles, personal computers, smartphones, and tablets globally. Notably, console game is a form of interactive multimedia used for entertainment purpose. Ubisoft’s expertise in the console gaming space makes it worth considering for a partnership.

Transition to Digital Gaming: An Industry Trend

Hasbro has been working hard to transition its product portfolio from traditional board games/toys to digital solutions to cope with recent trends. Actually, these days, toy manufacturers have been negatively impacted by age “compression” as children are growing up faster. Toy manufacturers have to battle a broad array of alternative modes of entertainment including video games, MP3 players, tablets, smartphones and other electronic devices.

Hence, of late, this Zacks Rank #3 (Hold) company has been signing back-to-back deals with several gaming companies. Last month, Hasbro signed as many as three digital gaming deals. One was with the global leader in digital interactive entertainment business, Electronic Arts Inc. (EA). Hasbro also acquired a 70% stake in Boulder, Colo.-based Backflip Studios that develops some of the most sought-after mobile games including DragonVale, NinJump, and Paper Toss. It also signed a multi-year licensing agreement with The Walt Disney Co (DIS).

Deals like these provide Hasbro an opportunity to participate in the fast-growing digital gaming/casual entertainment category, a market that is expected to grow significantly in the years ahead.

One company in the field of console gaming and mobile interactive entertainment products that is currently performing well is Activision Blizzard Inc. (ATVI), currently carrying a Zacks Rank #1 (Strong Buy).

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