Hasbro's significant investment in building internal video game studios and developing its own titles appears to be faltering, marked by a substantial $56 million write-down. This financial charge, revealed in the company's latest quarterly earnings, indicates that previously valued assets related to its digital games portfolio are now considered worth significantly less.
Shifting Strategy and Canceled Projects
In recent years, Hasbro had publicly committed to a robust video game strategy, announcing the creation of six internal studios including Atomic Arcade, Skeleton Key, Archtype Entertainment (working on the sci-fi RPG Exodus), and Invoke Studios (developing a Dungeons & Dragons title known as Warlock). The company had stated an investment of over $1 billion across these four primary studios, with video games being an integral part of its long-term vision. Dan Ayoub, head of digital product development, emphasized a focus on traditional PC and console games, distinct from the company's ongoing partnerships for mobile and casual titles.
However, this push has encountered significant hurdles. In 2023, Hasbro canceled five internal projects and subsequently conducted layoffs. While the company downplayed these events as typical industry practice, the recent $56 million impairment charge points to a more substantial issue. This charge is directly linked to the cancellation of "several games scheduled for release in 2028 and beyond."
While Hasbro has not specified which games were affected, reports suggest that Exodus and Warlock remain in development, with planned releases for 2027. The GI Joe studio, Atomic Arcade, has experienced layoffs, and though Hasbro stated a "Snake Eyes" game is not canceled, the studio's future remains uncertain. The status of an unnamed studio in Washington state is also unclear.
A Return to Partnerships?
Beyond the canceled projects, statements made during the earnings call suggest a broader shift in Hasbro's strategy. Despite prior declarations about focusing on internally developed PC and console franchises, the company now appears to be moving towards co-development and co-publishing deals, particularly with "lower-cost partners." This pivot indicates a reduced overall investment in gaming after 2026.
CEO Chris Cocks stated that Hasbro is focusing its digital investment on franchises, platforms, and partners with the "clearest upside" and where the company has the "strongest right to win." The company also indicated it works with over 200 projects in development across various platforms through partnerships with studios like Scopely, Aristocrat, Tripledot, and Ubisoft. Many of these partners are known for mobile or gambling game development.
Hasbro previously aimed for one to two significant game releases annually from 2027 onwards. While this target remains, the composition of these releases is expected to change, incorporating more service-oriented games and smaller content bets alongside major titles. This strategy suggests a potential retreat from the ambition of a robust slate of annual AAA hits, leaning back towards a licensing and partnership model that previously yielded successes like Monopoly Go! and Baldur's Gate 3.