Hasbro, Rovio Cut a Deal


In order to boost its Gaming category, toy maker Hasbro Inc. (HAS) cut a deal with Rovio Entertainment to develop toys and physical games modeled on the Angry Birds brand. Following the deal, Hasbro is now the premier toy licensee for Angry Birds.

Angry Birds – developed by Finland-based computer game developer Rovio Entertainment – is one of the world’s most sought-after entertainment brands. Since its launch in 2009 as a mobile application for Apple Inc.'s (AAPL) iOS, Angry Birds went viral and expanded its presence in other categories like consumer products, animation and publishing.

We believe that the deal is strategically positive for Hasbro. Angry Birds’ huge acceptance made it a lucrative target for Hasbro. Hasbro’s Games and Puzzles category began stabilizing since third-quarter 2012, after posting sales decline for seven consecutive quarters. Revenues at the games category grew 26.9% to $230.9 million in the first quarter of 2013. Angry Birds Star Wars game was one of the key elements to support the growth story.

Things are looking up for Hasbro with Angry Birds Go property scheduled to be released this year. We believe, Hasbro's new arrivals are expected to take the market by storm.  In such a situation, the furthering of Rovio deal will allow Hasbro to boost its gaming initiatives further.

The Angry Birds brand will also undergo innovations in different formats. In Mar 2013, Rovio released Angry Birds Toons, a weekly animated cartoon series distributed through Angry Birds games, TV broadcasters and on-demand networks while a full-length animated Angry Birds movie is slated to release on Jul 1, 2016.

Hasbro currently carries a Zacks Rank #2 (Buy). Some other gaming stocks that are currently worth a look include Electronic Arts Inc. (EA) and LeapFrog Enterprises Inc. (LF), both carrying a Zacks Rank #2 (Buy).

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