In September 2018, Mattel CEO Ynon Kreiz made a bold move to reinvigorate the toy company’s presence in Hollywood. He launched a films division and announced plans to bring its iconic toy franchises to the big screen through licensing and partnerships with major studios. This decision came after the options on several big titles, including a Barbie adaptation with Anne Hathaway attached to star, had lapsed. Mattel wanted to take control of its storytelling and ensure that its beloved toys were portrayed in the best possible way.
At the same time, its rival Hasbro had a different vision. Instead of relying solely on licensing its franchises like Dungeons and Dragons, Transformers, and G.I. Joe, Hasbro aimed to become a production powerhouse like Marvel Studios. To achieve this ambition, Hasbro acquired producer Entertainment One for $3.8 billion in August 2019. This move was meant to solidify Hasbro’s position as a major player in the entertainment industry.
However, over time, the paths of Mattel and Hasbro began to diverge. Mattel’s Barbie, produced in partnership with Warner Bros., achieved tremendous success at the box office, surpassing the $1 billion milestone. Hasbro, on the other hand, faced challenges with its own production ventures. The eOne-produced film Dungeons & Dragons: Honor Among Thieves underperformed at the box office, grossing only $208 million globally. Hasbro realized that its Hollywood strategy was not yielding the desired results, leading to a shift in its approach.
After the death of Hasbro CEO Brian Goldner in 2021, his successor, Chris Cocks, focused on transforming the company into a digital gaming giant instead of an entertainment powerhouse. This decision left eOne, once considered a vital part of Hasbro’s strategy, non-core to the company’s new direction. As a result, Hasbro decided to sell eOne for $500 million. This move allowed Hasbro to focus on its core toy business and its expansion into digital gaming.
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In contrast, Mattel continued to pursue its Hollywood strategy by partnering with major studios for the development and production of films based on its toy brands. For instance, Mattel is working with Universal on a feature film adaptation of Rock ‘Em Sock ‘Em Robots, with Vin Diesel attached to star. They are also collaborating with MGM on a Polly Pocket film, starring Lily Collins, and a Hot Wheels movie produced by J.J. Abrams’ Bad Robot. These partnerships allow Mattel to maintain creative control over its brands and ensure that the stories told align with its vision.
This divergence in strategies has not gone unnoticed by Wall Street. Analysts have adjusted their expectations for the toy companies based on their recent performance. Hasbro’s decision to sell eOne’s live-action assets and focus on its digital gaming expansion has led to a downward revision of its financial forecasts. However, analysts see the eOne sale as a positive move for Hasbro, as it allows the company to adopt an asset-light model for its entertainment division.
Overall, Wall Street now favors Mattel’s Hollywood approach. Following the success of the Barbie movie, Mattel has renewed its licensing deal with Warner Bros., solidifying its partnership for the production of toys based on Warner Bros. franchises. Mattel’s CEO, Ynon Kreiz, is confident in the company’s Hollywood strategy and sees the potential to capture the full value of its intellectual property through films and other entertainment ventures.
In conclusion, the paths taken by Mattel and Hasbro in the entertainment industry have diverged. While Mattel has embraced licensing and partnerships with major studios to bring its toy brands to life on the big screen, Hasbro has shifted its focus to digital gaming and sold off its entertainment assets. Wall Street now sees Mattel’s strategy as more favorable, and the company’s success with the Barbie movie has reinforced its position as a major player in Hollywood.
