An Exclusive Interview with Stephanie S. Wissink, a Principal, Senior Research Analyst and Co-Director of Investment Research at Piper Jaffray & Company: Board Game Businesses Stable with Growth of Supplementary Mobile Gaming Formats

Wall Street Transcript

67 WALL STREET, New York - November 12, 2013 - The Wall Street Transcript has just published its Entertainment, Toys and Games Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Brick-And-Mortar Versus Online Retail Sales - Cautious Consumer Spending - International Paid Television Growth - Digital Advertisement Trends - Mobile Device Gaming Prospects - Toy Company Competition

Companies include: Hasbro Inc. (HAS), Mattel Inc. (MAT), LeapFrog Enterprises Inc. (LF), Walt Disney Co. (DIS), Amazon.com Inc. (AMZN), Wal-Mart Stores Inc. (WMT), Target Corp. (TGT) and many others.

In the following excerpt from the Entertainment, Toys and Games Report, an experienced analyst from Piper Jaffray discusses the outlook for the sector for investors:

TWST: What is your coverage in the entertainment space?

Ms. Wissink: I have the toys category, and a couple of these companies, particularly Hasbro (HAS) and Mattel (MAT), which are the two largest toy manufactures, have a blossoming entertainment business, probably more so Hasbro than Mattel.

If you get down into some of other smaller companies in the digital entertainment business, LeapFrog (LF) would be one of those I would classify from a content standpoint but not, I wouldn't say, traditional entertainment companies.

TWST: Within toys and games, have we seen turning away from the traditional toys and games to the electronics-based games?

Ms. Wissink: Ten years ago, the proliferation of media was still very embryonic. I think today, if you look at household and household formation, the proliferation of media and the degree media is influencing the household is already existent, and the magnitude or degree of that change is lessening. Households with Millennial parents are forming. These are individuals that have been around digital media since their birth. Today's 20-year old effectively was born in the early 1990s, when we already had mobile devices. So this is a generation of parents that had a familiarity with digital, and digital content is very much a part of their household.

This might just get into the nuances of the category, but at some point digital contents in electronic entertainment can't be handed to an infant. Electronic used to be something that young adults did, and then teens started to get into it, and now you see it from kids in elementary school. At some point you can't say, I am going to get my six-month-old control to the PlayStation. So it feels like it probably has come down into the category enough and probably can't go that much further.

TWST: What about the move back toward traditional games? The idea of the family sitting down together and playing a board game, is that happening?

Ms. Wissink: I think maybe there is a little bit of blowback over the digital consumption. You have a board game that you recognized and love, like Scrabble and Monopoly, and those package board games still sell very well, actually at great price point in quantity, but you're also playing those same brands on your mobile handheld device.

It is almost like that intermediary category of traditional video gaming has changed to more casual gaming, almost gaming on demand, so kids play Candy Crush on a mobile device. What is fascinating about that to me is Monopoly is still growing significantly year over year. But if you look at Monopoly as a high, the board game business is very stable, but then all of the upside and growth has been coming from other formats of that existing brand.

TWST: What about dolls? How is the category growth doing?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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