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With a slowish week at last, I’m able to fondly look back on our GamesBeat Summit 2023 event and think about talks like the fireside chat between Chris Cocks, CEO of Hasbro, and Michael Metzger, partner at Drake Star Partners.
In this talk, which you can watch in the embedded video, Cocks talked about how he became CEO even though he has only been at the company for seven years. He started in 2016 as the president of the Wizards of the Coast division, which publishes Magic: The Gathering. Prior to that, he managed brands at companies such as Microsoft, Leapfrog and Procter & Gamble. He was named CEO in February 2022 as Hasbro — a $6 billion a year company — saw more of its future in digital tech and games.
My takeaway from the session is that Cocks and Hasbro want to be relevant in the modern era of video games and technology, and they will do what it takes to get more relevant — including acquiring other companies.
He’s responsible for household brands like Monopoly, which saw a successful game launch from mobile game publisher Scopely after six years of development. Hasbro also owns Magic, Dungeons & Dragons, Transformers and many others that Cocks wants to take into the digital realm as part of a transformation.
Late last year, Hasbro rolled out a “strategy blueprint” for the company about taking Hasbro back to what made it great in its first century of existence: play. He wants to bring “joy and community” to people around the world through the power of play. That community starts at two or three years old and continues on into adulthood, Cocks said, but he acknowledged the company needs to “reestablish leadership” in sectors for both toys and games.
He recalled how Hasbro invented the concept of an action figure in the 1960s with G.I. Joe and the company is still No. 1 today. It has the Playdough and Preskool brands, and it partners with Disney on Star Wars action figures.
But Hasbro also has a $2 billion-plus game business, with an operating profit growing at over 30% CAGR over the past five years. It has casual game brands from Candyland to Monopoly, plus brands like D&D and Magic. With the new strategy, the company is leaning into those brands in gaming.
The company thinks about “our brands as more than just toys and games, but as overall play-based entertainment IP that we can round out with other experiences, whether that’s consumer products that we might license out — something like clothing or other toy categories, location based experiences,” and theme parks. He noted the Scopely game Monopoly Go got to No. 1 on iOS and Android.
He said Scopely was a fantastic partner because it set itself apart with its patience to do the game right, with more than five years of work and a couple of reboots.
Wizards of the Coast had six consecutive years of growth prior to the time that Cocks was running it, but it started to hit a plateau. Under his leadership, he put product experts in charge and invested in data analytics and consumer insights. They used the insights to get closer to the customer, test new things, and then shake up the business.
The Wizards of the Coast business grew from $450 million in 2015 to $1.2 billion by 2022. Cocks credited the company’s efforts to segment consumers and target them with new products. Magic: The Gathering — Arena has turned into a profitable $250 million a year business.
Magic has 10 million to 15 million active Magic players today. Not bad for a 35-year-old franchise. But there are perhaps 60 million to 70 million who have ever played Magic in their lives and getting them back is one of the priorities.
“Magic is one of these games that I think transcends the definition of a hardcore game. It’s a lifestyle game. It’s something that people play for years at a time and invest a lot of time and their money and social circles and friendships,” Cocks said. “Having a platform like Arena not only allowed us to bring new people into the franchise, but it also allowed us to reactivate people who’ve lapsed out of the game because they had some life events or moved away from their playing circle. We gave them a way to play.”
Cocks foresees geographic and platform expansion for Arena in the future. It will be coming out on Steam soon, and Hasbro wants to take it to the consoles too. He also said Hasbro is contemplating innovations in digital collectibles.
He talked about addition of “universes beyond” sets for Magic: The Gathering, which is adding trading cards for new intellectual properties. It did a test run a couple of years ago with D&D and last year it did a full product line with Warhammer 40,000.
Now it has launched a set for The Lord of the Rings, working with the Tolkien estate.
“So far the reaction that we’ve seen from fans have been fantastic,” he said (before the launch).
It has other hardcore fanbase trading card games like Ubisoft’s Assassin’s Creed and Square Enix’s Final Fantasy.
“You can imagine we’re having really interesting conversations with other IP holders that have that hardcore fan base or are fantasy and sci fi adjacent,” he said. “It’s a real kind of blue ocean opportunity and there really hasn’t been a lot of IP licensing into trading card games.”
The Dungeons & Dragons: Honor Among Thieves movie got good reviews in the 90s and it will likely have a long shelf life as it moves into post-theatrical life and streaming, Cocks said. The company is exploring other partnerships such as animated shows and future movies.
A year ago, the company acquired D&D Beyond, which lets people play online together with their tabletop experience.
“Video games are a big area of focus for us” through smart licensing and adding development capacity to build out games on its own, Cocks said.
There have been missteps too, like the D&D Open Game License controversy where Hasbro’s Wizards of the Coast made some licensing changes and then was forced to reverse them. Some third-party publishers walked away from D&D for good after the controversy started in December 2022 after an “update.” That stopped D&D NFTs and required a higher royalty for large revenue products.
Developers revolted. Cocks didn’t address this in his fireside chat.
As for in-house game development and publishing, Cocks said he was going for a balanced approach. He noted how the company is still relatively new to the digital space and it has important partnerships in the digital space.
“Partnerships come in all flavors,” he said. “They come development partnerships, where we might be the publisher; publishing partnerships or platform partnerships, where we invest in producing a game and then work with someone to put it on their platform; or more traditional licensing partnerships. In terms of how we’re thinking about building out our own capacity, we think it’s important to have a stake in digital and understand how to commercialize that and build a direct relationship with our consumers.”
That’s a pretty big signal to me that Cocks is interested in building up the game development teams inside Hasbro and possibly acquiring some, as Metzger asked during the session.
As for new spaces like virtual reality and augmented reality, Cocks said the company was looking at doing things in those spaces. He saw AR as a “natural bridge” between a physical and a screen-based product.
“From the board game perspective, you can imagine we continue to invest in simple AR experiences that are very open ended,” Cocks said. “If you have a phone or a simple kind of like tablet, you can bring the board to life. You can use simple movements on camera, particularly as we start to have more sophisticated cameras, and future generation phones to be able to have a fun new twist.”
But while pursuing those targets, Cocks said he wants to keep the technology as simple as possible to reach tens of millions or hundreds of millions of fans.
“It’s important for us to keep the barrier to entry as low as possible, both in terms of the price point as well as the technology involved. So I think that’s where we’ll be leaning into that in the near future,” he said.
And he said, “I’d say acquisition is certainly on the table for us. It’s probably something that is more of a mid-term focus for us right now. We’re kind of dealing with actually the opposite approach where we’re driving some divestitures inside of entertainment,” he said. “So, we want to get through that, or we want to get through this epoch.”
He noted that Hasbro is a “super cash rich company”.” and it’s very profitable.
“M&A will be a focus and games will be a particular focus for us,” he said. “In our heart, we’re an IP company.”
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