About Hasbro

Hasbro, Inc. (Hasbro) operates as a play and entertainment company. The company is Creating Magic Through Play by delivering engaging brand experiences for global audiences across gaming, consumer products and entertainment, with a portfolio of iconic brands including MAGIC: THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS, and PEPPA PIG, as well as premier partner brands. Going forward, the company retained brand-based created content and the capability to develop and produce entertainment including animation, digital shorts, scripted TV and theatrical films related to core Hasbro IP, as well as its Family Brands business, such as PEPPA PIG and PJ MASKS. Strategy The key elements of the company’s strategy are to build innovative toys and games that create memorable, social and collectible experiences of play and entertainment in its key focus categories: games (board games, trading cards, role playing); preschool; action brands; creativity; outdoor; and dolls; focus on a franchise-first approach to deliver the magic of its brands through licensing, digital games and entertainment; focus on fewer, bigger, more profitable brands and driving market share in its key focus categories; entertainment investments focused on Hasbro IP aligned with its strategic plan, including merchandise and digital engagement opportunities with a focus on franchise brands; develop its insights and analytics capabilities, which are heavily focused on putting consumers at the center of everything it does, as it builds multi-generational brands; invest in its Hasbro direct-to-consumer business and build direct relationships with fans through ecommerce, social, digital games and services; continue to cultivate its digital gaming business, through AAA games, games as a service and licensing relationships that activate its brands; and scale licensing of its brands through a growing portfolio of partners from theme park operators to toy companies, for consumers to experience its brands and drive communities of friendship and fandom around them. Key areas of focus for activating the company’s brands include: Toys and Games: The company markets and sells toys and games based on its owned and controlled brands globally at retail stores, through ecommerce platforms and through its fan-based direct-to-consumer platforms Hasbro PULSE and SECRET LAIR. Additionally, through license agreements with third parties, the company develops and sells products based on popular third-party brands through these channels. The company’s toys and games include action figures, arts and crafts and creative play products, dolls, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, games and many other consumer products which represent an array of internationally recognizable brands that capture the imagination of its consumers worldwide. Within toys and games, as a leading producer of new and innovative gaming brands and play experiences, the company’s gaming business continues to transform game play. To successfully execute its gaming strategy, it considers brands which capitalize on existing trends while evolving its approach using consumer insights and data analytics, technology advancements and offering game-play experiences addressed to consumer demand for face-to-face, trading card and digital game experiences played as board, off-the-board, digital, card, electronic, trading card and role-playing games. The company’s subsidiary, Wizards of the Coast (Wizards), is a critical part of its gaming business, driving innovation and growth through its popular role-playing and fantasy card-collecting games such as MAGIC: THE GATHERING, Hasbro's first billion-dollar brand which benefited from multiple tentpole set releases exceeding $100.0 million per set during 2023, and DUNGEONS & DRAGONS. The company’s iconic game brands include long-time favorites, such as MONOPOLY, JENGA, CONNECT 4, THE GAME OF LIFE, SCRABBLE, CLUE and TRIVIAL PURSUIT, as well as many other well-known game brands. Licensed Consumer Products: As a complement to its toy and game business, the company promotes its brands through the out-licensing of its intellectual properties to third parties for promotional and merchandising uses in a wide range of consumer products. These include apparel, publishing, home goods and electronics, or in certain situations, toy products where the out-licensing of brands is more effective and profitable than developing and marketing the products ourselves. A recent example of this includes the return of the company’s LITTLEST PET SHOP brand through its partnership with Basic Fun!, a global marketer of toys and consumer products. Together it relaunched LITTLEST PET SHOP through a Roblox experience in December 2023 and expects a refreshed LITTLEST PET SHOP product lineup in the first half of 2024 featuring new characters, collectables, and play-sets. The company also out-licenses its brands for uses in theme park attractions and other forms of location-based entertainment. In cases where the company licenses its intellectual property to a third party, it enters into contracts with licensees that pay it either a sales-based or usage-based royalty, or a combination of both, for use of the brands, and, in some cases, the license arrangements are subject to minimum guaranteed amounts or fixed fees, over the term of the license. Digital Gaming: Important to the company’s success is the continued growth and development of its digital gaming business, including development of AAA games, games as a service and licensed games. Spanning action role-playing games for web-based play, PC and gaming consoles, to Hasbro branded mobile application-based games, the company’s digital gaming business helps to unlock the full value of its brands and achieve its mission of storytelling and bringing its brands to life. Recent examples include the 2023 release of Baldur's Gate 3, the DUNGEONS & DRAGONS-based role-playing video game from its partners at Larian Studios which won six awards, including Game of the Year at the 10th annual Game Awards. In 2022, the company acquired D&D Beyond, the premier digital content platform for DUNGEONS & DRAGONS. In addition, the company continues to develop and enhance other digital games internally and through third parties. For example, the company has developed and launched the digital version of the MAGIC: THE GATHERING card game, Magic: The Gathering Arena and its related mobile application, both of which complement the company's direct-to-customer relationships with its new and long-time, MAGIC: THE GATHERING fan-base. The company also out-licenses certain of its brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties into digital gaming experiences, such as Baldur's Gate 3. One example is the popular Monopoly Go! free-to-play mobile game, released by Scopely, Inc. during 2023 and based on the classic board game, MONOPOLY. Entertainment: Reinforcing storylines associated with the company’s owned and controlled Hasbro and Family Brands through entertainment mediums, including television, film, digital content and other programming is its primary entertainment strategy. With its cross-platform capabilities the company’s entertainment business leverages film and television production and sales, digital content and children's programming to create compelling entertainment and drive creativity and overall awareness across brands with merchandising and licensing tie-ins. Film and Television: The company’s go-forward primary focus is on the development, production and co-production of content based upon Hasbro brands. The company’s film content is offered on all media channels, including cinema, home entertainment, broadcast and digital, including Subscription Video-On-Demand (SVOD). The company partners with Paramount Pictures (Paramount) to produce and distribute live action and animated films, as well as television programming based on Hasbro brands. The company plays an active role alongside Paramount in content development, production and distribution in addition to the financing of films created through its cooperative agreements. Under this relationship the company released Dungeons & Dragons: Honor Among Thieves, in early 2023, and under a separate agreement entered with Paramount, the company released the feature length film, Transformers: Rise of the Beasts, in the Summer of 2023. Family Brands Animation: The company’s family brands team develops, produces and distributes Hasbro brand-based animation content for children’s properties on a worldwide basis which results in multiple touchpoints across Blueprint 2.0. The principal brands include PEPPA PIG and MY LITTLE PONY whose content entertains children worldwide and generates revenues through licensing and merchandising programs across multiple retail categories. These brands generate revenues from Advertising Video-On-Demand (AVOD) through platforms such as YouTube and SVOD revenues from the sale of content to video streaming platforms. The company’s portfolio of preschool brand driven content also includes BABY ALIVE and PLAY-DOH and the development of new preschool programs and properties. Hasbro Direct: The company’s Hasbro Direct business is its Fans Come First approach, intended to create direct connections with its consumers and includes the following platforms: Magic: The Gathering Arena - the free-to-play online adaptation of the MAGIC: THE GATHERING card game where players can explore the fantasy worlds of Magic: The Gathering Arena, play a variety of game formats to collect cards and test skills against friends and other players around the world, or enter in-game tournaments. SECRET LAIR – the company’s internet-based storefront where MAGIC: THE GATHERING fans can purchase exclusive and limited versions of cards. D&D Beyond - the premier digital content platform for DUNGEONS & DRAGONS where fans can access online versions of official rule books, character sheets and catalogs, adventures, and other digital tools, such as character builders and official D&D content available for purchase. Hasbro PULSE - Hasbro's ultimate fan ecommerce destination. At Hasbro Pulse the company’s fans can find product offerings and experiences from its popular brands as well as access to views of behind-the-scenes material and insider details. In addition, Hasbro Pulse offers consumers access to product related livestreams such as fan oriented virtual conventions and product and merchandise reveals, as well as the opportunity to participate in HasLab, the Hasbro crowdfunding platform which brings limited-edition collectibles into the hands of fans. With these platforms, the company is expanding and enhancing its capabilities beyond the traditional ecommerce outlet to serve its consumers and activate brands across Blueprint 2.0. Connecting with fans directly makes the company’s products more accessible in more markets and enables it to sell brands and showcase selected items, creating more brand awareness while gaining a deeper understanding of its fans and what they want and expects from Hasbro. Other aspects of the company’s strategy that help drive its storytelling experiences include digital content, location-based entertainment, and publishing. Digital Content: The company understands the importance of digital content to drive fan engagement, including in gaming and across other media, and of integrating such content with its products. Digital media encompasses digital gaming applications and the creation of digital environments for traditional products through the use of complementary digital applications, social media and websites which extend storylines and enhance play. Location-Based Entertainment: Location-based entertainment (LBE) allows consumers to experience and share the company’s brands. LBE includes licensing the company’s brands to theme parks, water parks, hotels and resorts, family entertainment centers, retail, dining and entertainment, shows, exhibits and exhibitions such as Hasbro City, the newly-opened Hasbro-themed family entertainment center located in Paseo Interlomas, Mexico featuring thrilling theme park rides and experiences, live shows, food and beverage options and the region's first Hasbro-themed retail location. These experiences bring the company’s brands to life and further immerse its consumers in its storytelling in a capital efficient manner. Publishing: Licensing the company’s brands to global publishers is another way to bring its brands to consumers in a meaningful way through various publishing formats, from puzzle and trivia books to children's stories, adult novels and comics. Brand Portfolios In 2023, the company realigned its brand portfolios to correspond with the evolution of its strategy. The company organized and marketed owned, controlled and licensed intellectual properties within its brand architecture under four brand portfolios, such as Franchise Brands, Partner Brands, Portfolio Brands, and Non-Hasbro Branded Film & TV. Franchise Brands Includes the company’s flagship owned or controlled brands, which can deliver significant revenues, profits and growth over the long term. Key Brands Include MAGIC: THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS, and PEPPA PIG. In 2023, MAGIC: THE GATHERING benefited from successful card set releases that include Lord of the Rings: Tales of Middle-earth, Phyrexia: All Will Be One, March of the Machine, and Wilds of Eldraine. The company has established a diverse portfolio of well-known gaming brands through acquisition, invention and innovation. In 2023, the company launched TWISTER AIR, a modernized mobile app-enabled game inspired by the Hasbro classic, TWISTER. Another example is the popular Monopoly Go! free-to-play mobile game, released by Scopely, Inc. during 2023 and based on the classic board game, MONOPOLY. Continued launches of the company’s engaging and popular PLAY-DOH products include the PLAY-DOH Magical Mixer Playset and the PLAY-DOH Busy Chef’s Restaurant Playset in 2023. In 2023, partnering with Paramount Pictures, the company’s TRANSFORMERS brand was supported by the release of Transformers: Rise of the Beasts, the seventh installment in the TRANSFORMERS film series, along with an all new associated TRANSFORMERS product line. Partner Brands Includes those brands the company licenses from other parties for which it develops toy and game products. Partner brand revenues fluctuate based primarily on the entertainment releases around these brands in any given year. Key Brands include MARVEL, including SPIDER-MAN and THE AVENGERS (Owned by The Walt Disney Company (Disney)); LUCASFILMS' STAR WARS (Owned by Disney); BEYBLADE; GHOST BUSTERS; and INDIANA JONES (Owned by Disney). The company holds certain toy and game licensed merchandise rights for major Disney entertainment properties Marvel and Star Wars, each for multi-year terms. The company’s products were also supported by numerous streaming and broadcast television series of its partners. Portfolio Brands Includes those brands the company owns or controls, which it feels has upside in revenue and profitability that have not yet grown to the significance of a franchise brand. In 2023 Hasbro reintroduced FURBY, the iconic interactive toy, with a new product line launched to celebrate the brand's 25th anniversary. Non-Hasbro Branded Film and TV: Includes non-Hasbro-branded film and TV and other entertainment related revenues, the majority of which are associated with the company's non-core eOne Film and TV business sold to Lionsgate. This relates to non-Hasbro branded content. In 2024 this category will be removed from the Company's brand architecture. Hasbro will continue to develop and produce animation, digital shorts, scripted TV and theatrical films for audiences related to core Hasbro IP. All retained Hasbro-branded content is included in the portfolios. Segments In 2023, the company operates through Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment segments. Consumer Products Engages in the sourcing, marketing and sales of toy and game products around the world. The company’s Consumer Products business also promotes its brands through the out-licensing of its trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products, such as toys and apparel. Additionally, through license agreements with third parties, the company develops and sells products based on popular third-party brands. Wizards of the Coast and Digital Gaming Engages in the promotion of the company’s brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast properties. Wizards of the Coast offerings include popular games such as the collectible card game MAGIC: THE GATHERING and the fantasy tabletop role-playing game DUNGEONS & DRAGONS, as well as other digital games developed for mobile devices, personal computers and video gaming consoles including Magic: The Gathering Arena. Additionally, the company out-licenses certain of its brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences such as Monopoly Go!. Entertainment Engaged in the development and production of Hasbro-branded entertainment content including film, television, children's programming, digital content and live entertainment focused on the rich vault of Hasbro-owned properties. Feature length film and television programming based on its owned and controlled brands provide both immersive storytelling and the ability for the company’s consumers to enjoy these properties in different formats, which also drives product sales, results in increased licensing revenues, and expands overall brand awareness. Additional Segment Information To further extend its range of products in the various segments of its business, the company sells a portion of its toy and game products to retailers on a direct import basis from the Far East. These sales are reflected in the revenue of the related segment, to which the sale relates. Certain of the company’s products are licensed to other companies for sale in selected countries where it does not otherwise have a direct business presence. Dispositions On December 27, 2023, the company completed the sale of its Entertainment One film and television business (eOne Film and TV) to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (collectively Lionsgate), pursuant to the terms of an equity purchase agreement dated August 3, 2023, among Hasbro and Lionsgate. The sale included a team of talented employees, a content library of approximately 6,500 titles, and active productions for certain non-Hasbro owned intellectual properties such as The Rookie and Yellow Jackets franchises. Seasonality The company’s accounts receivable balances typically increase during the third and fourth quarters as customers increase their purchases to meet expected consumer demand in the holiday season. Due to the concentrated timeframe of this selling period, payments for these accounts receivable are generally not due until later in the fourth quarter or early in the first quarter of the subsequent year, as a result of these timing differences between expenses paid and revenues collected, from time to time it may be necessary to borrow varying amounts during the year (year ended December 31, 2023). The company’s entertainment business is also subject to seasonal variations based on the timing of film, television, streaming and digital content releases, which are often determined based on the timing of prime television seasons, certain geographic release dates and competition in the market. Marketing and Sales, Customer Concentration and Advertising Marketing and Sales While its global development function focuses on brand and product innovation and re-invention, the company’s global marketing function establishes brand direction and messaging and assists the selling entities in establishing local marketing programs. The global marketing group works cross-functionally with the global development function to deliver unified, brand-specific consumer experiences. The company’s products are sold globally to a broad spectrum of customers, including mass-market retailers, distributors, wholesalers, discount stores, specialty hobby stores, drug stores, mail order houses, catalog stores, department stores and other traditional retailers, large and small, as well as ecommerce retailers and direct-to-customer through its fan-focused Hasbro Direct business. The company’s own sales forces account for the majority of sales of its products with remaining sales generated by independent distributors who, for the most part, sell its products in areas of the world where it do not otherwise maintain a direct presence. The majority of the company’s product sales are to large chain stores, distributors, e-retailers and wholesalers. Customer Concentration During 2023, net revenues from the company’s top five retail customers accounted for approximately 34% of its consolidated global net revenues, including its largest customers, Wal-Mart Stores, Inc. and Amazon.com who together represented 22% of consolidated global net revenues, with each accounting for 11%. Net revenues from the company’s major customers are reported within the Consumer Products segment, Wizards of the Coast & Digital Gaming segment and the Entertainment segment. Ecommerce sales continues to represent a significant portion of overall sales to these customers as annually, consumers are continuing to purchase more products online compared to visiting retail store locations. Advertising The company advertise many of its products and brands through digital marketing, social media and on television. Products are strategically cross promoted by spotlighting specific products alongside related offerings in a manner that promotes the sale of not only the selected item, but also those complementary products. As described earlier, the company’s strategy includes focusing on reinforcing storylines associated with its brands through several mediums, including digital and tabletop gaming, consumer products, television, film and live action experiences. The company’s brands obtain marketing and advertising support through entertainment appearing on major networks globally, theatrical releases, as well as on various other digital platforms, such as Netflix and Apple TV. A recent example of this was the September 2023 premier of the television series, Power Rangers Cosmic Fury season 30, released on the Netflix streaming platform. Many of the company’s new toy and game products are introduced to major customers within one to two years leading up to their year of retail introduction. The company’s advertising expenditures are impacted by its product mix in any given year. For example, brands based on major motion picture releases generally require less advertising as a result of the promotional activities around the motion picture release, whereas leading into a major digital gaming launch, its Wizards of the Coast business will have substantial increases to advertising, marketing and promotional expenses to acquire players and promote gaming releases. Supply Chain and Manufacturing Beginning in 2022, the company launched a multi-year initiative aimed at transforming its global supply chain into a best-in-class network that delivers competitive advantages through performance efficiency, operating model integration and organizational accountability. During 2023, the majority of the company’s products were manufactured in third-party facilities in the Far East, primarily China, Vietnam and India, using a Hong Kong based wholly-owned subsidiary operation for design, quality control and order coordination purposes. Within the U.S., the company utilizes facilities operated by Cartamundi, which are located in East Longmeadow, Massachusetts to manufacture significant quantities of Hasbro game products. The company has diversified its global sourcing mix and decreased its dependence on Chinese manufacturing in recent years by increasing production of its products in other countries, including Vietnam and India. Most of the company’s toys and games are manufactured from basic raw materials such as plastic, paper and cardboard, although certain products also use electronic components. Product Development The company’s product development expense in 2023 totaled $306.9 million. Government Regulation The company’s toy and game products sold in the United States are subject to the provisions of The Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, (as amended, the CPSIA), The Federal Hazardous Substances Act (the FHSA), The Flammable Fabrics Act (the FFA), and the regulations promulgated thereunder. In addition, a few of the company’s products, are also subject to regulation by the Food and Drug Administration. The company’s Human Rights and Ethical Sourcing program is dedicated to ensuring that facilities involved in the production of its toys and games, or licensed consumer products, comply with the company’s Global Business Ethics Principles. The company’s business is subject to other regulations, such as the General Data Protection Regulation in the European Union, which restricts the collection, use, and retention of personal information, as well as data protection laws in the United States and other countries. History Hasbro, Inc. was founded in 1923. The company was incorporated in 1926.