Hasbro Sells Game Manufacturing Plants; Focuses On "Global Brand Experiences"

It's kinda tangential to RPG news, so I wasn't originally going to cover this. But enough people have emailed me links to it that there's clearly interest in the subject. Hasbro has just sold its game manufacturing plants (one in Massachusetts, USA; and one in Waterford, Ireland) to Cartamundi, a Belgian company. They're not getting out of the publishing of games, just the physical manufacturing side, and this affects CCGs and boardgames rather than RPGs.

The plants produce Magic: The Gathering, Monopoly, and many other Hasbro games.

In a sentence familiar by now to D&D fans, Duncan Billing (executive vice president, chief global operations and business development officer) said “We will continue to focus on global brand building, driven by great storytelling and innovation”. The CEO, Brian Goldner, phrases it as "Hasbro is in the middle of transitioning itself from a toy and game company to an organization delivering global brand experiences." That's a phrase that will echo around the messageboards for a while....

The staff is being retained at both locations.

 

[Morrus]

Hmmm... so, it seems to me, they are basically saying:

They're not saying anything of the sort. Those are all your words, not theirs.

 

[Steven Winter]

In any business I have owned or run, I prefer that manufacturing be handled by manufacturing specialists.

But Hasbro was a manufacturing specialist, one of the top in its field. They had people who know every facet of game manufacturing inside and out. Very little of the company was dedicated to designing games; the vast majority of it was in place to manufacture and sell games. It is surprising (to me, at least) that they're getting out of the manufacturing business.

Steve

 

[ninjayeti]

Does this mean that characters will now earn GBXP in order to level up?

 

[77IM]

Very interesting. They're dumping physical assets as well as payroll & pensions for (presumably) thousands of workers. The PR-speak says they're focusing on IP & brand extension.

Hmm... to me, this sounds like they're trimming fat to make themselves more attractive as an acquisition target. A Disney or Sony looking to grab a bushel of IP doesn't want or care about physical manufacturing plants or a bunch of expensive American laborers.

This is a really fantastic and insightful post.

I wonder if this also helps Hasbro dodge a PR bullet when the expensive American workers are replaced with cheap foreign labor. (Labor costs are pure speculation on my part -- it's definitely possible to make many things just as economically in the US as overseas, if you do it right.)

 

[Scrivener of Doom]

But Hasbro was a manufacturing specialist, one of the top in its field. They had people who know every facet of game manufacturing inside and out. Very little of the company was dedicated to designing games; the vast majority of it was in place to manufacture and sell games. It is surprising (to me, at least) that they're getting out of the manufacturing business. Steve

I don't think this will lead to more games being designed: besides lowering costs (see below), I think this is about paring back to a core team that can focus on the IP and converting the IP into things that generate windfall gains. They will still have the games for bread-and-butter regular income but, if they manage the IP properly, they can boost their margins by charging more and, if they manage the outsourcing of manufacturing properly, they can lower their production costs. Also, if anything goes wrong with the US economy as a whole - a likely proposition because debasing the currency (aka printing more money) has destroyed every empire since Rome - then you have a small, core team who understand the IP and can escape to a far more business- and taxpayer-friendly friendly location such as Singapore while the manufacturing is handled outside the USA also by external specialists. A lot of other US companies also used to be manufacturing specialists, and now they're not. Let's face it, manufacturing in the USA is a high cost endeavour especially for things like games where you're looking at components made of plastic and cardboard, not precision-engineered metal where you can justify the costs because of the (in some cases) higher skills and quality. Which leads to...

(snip) I wonder if this also helps Hasbro dodge a PR bullet when the expensive American workers are replaced with cheap foreign labor. (Labor costs are pure speculation on my part -- it's definitely possible to make many things just as economically in the US as overseas, if you do it right.)

... I suspect that a lot of this is to give them access to lower costs of production without the headaches or heartaches of having to retrench Hasbro people, because they're no longer Hasbro people. It also gives them flexibility in the event of problems in the USA as noted above.

 

[pming]

Hiya!

They're not saying anything of the sort. Those are all your words, not theirs.

Exactly... that's why I said "...so, it seems to me...". I'm hoping I'm wrong (I have been in a bit of a wierd 'funk' these last few weeks... new meds n' all...), but it's just a gut feeling I have.

*shrug* ...carry on...

^_^

Paul L. Ming

 

[TrippyHippy]

What they are saying is they want to invest in the IP brands they hold to make money through a wider set of mediums than the simple manufacture and distribution of physical game sets. This means license deals and marketing profiling to affiliated products. Considering that D&D is a household name, even though its physical sales may not have been comparatively great in recent years, this is a GOOD thing for the RPG hobby. D&Ds relative value (and longevity) goes up by this type of statement.

 

[Dausuul]

But Hasbro was a manufacturing specialist, one of the top in its field. They had people who know every facet of game manufacturing inside and out. Very little of the company was dedicated to designing games; the vast majority of it was in place to manufacture and sell games. It is surprising (to me, at least) that they're getting out of the manufacturing business.

Perhaps they're trying to reorient the rest of the company to be more Wizards-like? Whether or not it makes sense for Hasbro as a whole to get out of the manufacturing biz, it makes total sense for WotC, which really is focused on designing games and developing IP.

 

[mouselim]

They're not saying anything of the sort. Those are all your words, not theirs.

pming is just speaking out their inner-most thoughts and feelings...or so he thinks what they didn't say outright...by the way, that's management talk for you.

 

[Janx]

But Hasbro was a manufacturing specialist, one of the top in its field. They had people who know every facet of game manufacturing inside and out. Very little of the company was dedicated to designing games; the vast majority of it was in place to manufacture and sell games. It is surprising (to me, at least) that they're getting out of the manufacturing business.

Steve

Indeed. A company whose business was the development and manufacturing of games for decades likely has all the expertise and equipment to do so.

Spinning the manufacturing off means they have to go to a vendor to get their own game printed (who will charge mark up so THEY can make a profit).

This is patently stupid unless your real goal is to divest of the ability to make your own stuff so you can go overseas and have them make it for cheaper than the company you just foisted your staff and equipment on.

Hasbro seems likely to be aiming to offshore production and/or live off of branding on Transformers and other original IP that they own.