Hasbro Sells U.S. and Irish Factories; Here’s Why

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This week we learned that Hasbro has taken yet another step away from being in the traditional toy and game business and towards being a provider of play and entertainment.  In a press release dated July 14, 2015, the company announced:  “…the signing of a letter of intent to sell Hasbro’s manufacturing locations in East Longmeadow, Massachusetts and Waterford, Ireland to the Cartamundi Group.” 

 The release then went on to say:

The divestiture is in line with Hasbro’s mission of Creating the World’s Best Play Experiences and building larger more global brands. Hasbro will continue to invest resources in areas that will maximize the value of the company’s brands globally, including in design, development, storytelling, sales and marketing. The sale of these facilities will have no impact to Hasbro’s commitment to the Games category and the company will continue to invest in gaming.

Here is what I think: 

  1. Hasbro sees that it must invest in being fast and nimble to keep up with rapid change in how play is consumed.  Traditional manufacturing is slow.
  2. Hasbro has embraced play in all of its formats and that means focusing on providing the content needed for not just board games and toys but for video games, apps, movies, television shows and more.  Manufacturing is too narrow an activity for a multi-platform company.
  3. Hasbro fully understands what technology did to disrupt the music industry, photography, communications and so much more.  With 3D Printing, 3D scanning as well as the desire consumers have for personalization; traditional manufacturing is batter up for disruptive change.  Hasbro doesn’t want to be holding on to manufacturing facilities if that business gets disrupted.
  4. Hasbro wants to aim more on owning and possibly purchasing more brands and intellectual property.  The news last year that Hasbro was considering buying DreamWorks was an indication, at least to me, that it is better to own than rent content.  Manufacturing is no where to be found on that target.


The decision will be a boon to Cartamundi which will continue to manufacture Hasbro games.  This is also a boon to Hasbro Hasbro factory workers who will stay on as “Cartamundi will continue to employ all regular manufacturing and distribution employees located in East Longmeadow and Waterford on comparable terms.”  Good for you Hasbro.

One final note, something interesting to ponder is this:  Is Hasbro actually leaving the toy industry or is it shaping the toy industry as it will exist in the 21st century?  I would love to know what you think.

 

 

 

 

 

 

8 thoughts

  1. Richard,
    Great read, as usual, it certainly got me thinking. It occurred to me that manufacturing is somewhat of a commodity, and is very competitive. It makes sense that they bring in that capital and redeploy towards building their brands and intellectual property which, as you say, are nimble and I would imagine far more profitable.
    Manufacturing can be disrupted in many ways including 3D printing. However, most likely we will see a shift in traditional manufacturing to lower cost countries from China before 3D printing is a major force. I am seeing this now, since I deal in low cost toys which are very labor and price sensitive. This movement will only grow, and be more competition for their factories in the US and Europe. It makes perfect sense that they are outsourcing this to a company who can take the risk and follow the changes in manufacturing over the next century.

  2. HAS pitches this as innovative and forward-thinking, but really they were about the last major toy company to own bot the IP and the manufacturing – particularly in developed (expensive) countries. Mattel and others traded physical manufacturing assets for IP properties and rights a decade or more ago. (Perhaps the asset-less models of Uber and others woke HAS up.)
    I always held HAS in high regard for continuing to make some products in the US, and I am pleased that they will continue to outsource its production to its former facility – at least until the contracted period runs out.
    Tavis @ Game Crafter: Good for you! I get a number of inquiries about US manufacturing (I make wooden toys at Pure Play Toys), and I now know where to send those interested in making smaller production run games.

  3. Totally forward thinking….diversifying some of their fixed infrastructure costs and re-allocating CAPEX to concentrate on the future and what that holds in store for all of us in this market segment..

  4. The Game Crafter has been offering print-on-demand board games since 2009. It started as a crazy idea and now we have a full product line that includes over 70 custom printable items and over 820 game pieces and parts.
    No order minimums. Buy 1 copy of your game or as many as you need. Made in the USA. Shipped within a couple weeks instead of a couple months.
    In 2014, we made over 80,000 custom board games for people around the world. On-demand manufacturing can work for board games. The world is definitely moving towards more personalized products and we are trying to set the bar and show what’s possible with on-demand board game manufacturing.
    http://www.thegamecrafter.com

  5. What a BRILLIANT move, on HASBRO’s part! “With 3D Printing, 3D scanning as well as the desire consumers have for personalization; traditional manufacturing is batter up for disruptive change.” When your company has visionary leaders who see what is shaping the future, making strategic changes is the definition of a GOOD company going to GREAT!

  6. Hasbro could have invested in the factories it owned with digital printing, rapid manufacturing etc but it is now an entertainment business not a toy / game manufacturing business. Cartamundi on the other hand are experts in innovative manufacturing. Hasbro can get on with building the brand play experiences and Cartamundi can build and invent new ways to MAKE those a reality. I think it’s a smart move for both parties.

  7. I think this is spot on. Hasbro are clearly adapting to the changes in the world and going towards them, rather than staying stuck in their ways. Great article.

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