Company Profile - Hasbro

Fewer, Bigger, Better - Hasbro’s new focus

Following a challenging few years, toy and entertainment giant Hasbro is undergoing a significant transformation, focusing on fewer brands, an enhanced consumer experience and a simplified business model. Toy World sat down with the man brought in as part of the team overseeing the reinvention of Hasbro, Joao Nielsen Sebastian, president EMEA, LATAM & Asia Pacific, to find out about his vision for the future of the business, the importance of licensing to Hasbro’s success and why play really does matter.

Joao has a somewhat unconventional background for a man now heading up EMEA, LATAM and Asia Pacific at one of the biggest toy companies in the world. Over coffee at Hasbro’s Stockley Park offices, he tells us of his upbringing in Portugal (he’s half Portuguese, half Spanish), of his move to the USA for studies (he has an MBA in Management and Strategy from Colombia University), his past two decades in the UK – and his impressive work at two of the world’s biggest tech behemoths.

A strategy consultant by profession, Joao’s career started in earnest with McKinsey & Company, where he focused on entertainment and consumer goods marketing. He then joined Google, where he helped the likes of P&G, Unilever and L’Oreal maximise on digital brand strategy in the role of industry head, and then senior industry head EMEA, before moving to Apple, where he most recently held the role of EMEIA commercial director at Apple Retail. In this role, he focused on consumer brand engagement at Apple stores during seven iPhone launches, creating what he calls a ‘magical brand experience’.

And then, following an approach by the company, Joao accepted the Hasbro role. You might be wondering what compelled Joao to move from tech to toys, but five minutes in his company makes it clear – the toy industry is one he genuinely cares about.

“This is a passion project for me,” he replies, when quizzed over the move. “I’m a dedicated family man, a father to three wonderful kids, and I love Hasbro for what it stands for. I love the 100-year legacy, I love its brands and I really believe in the importance of play. I’m not just saying that for your benefit: play is vital for kids and families, and Hasbro is a fundamental part of bringing that play to households around the world.”

An insight-driven strategist, Joao has been brought in to help Hasbro turn around its fortunes. The company’s CEO, Chris Cocks, described Hasbro’s full-year 2022 results as ‘below our expectations’ after it posted fullyear revenues of $5.86b, down -9% YoY. Q4 revenue was down -17%, meanwhile, coming in at $1.68b. However, Wizards of the Coast, digital gaming, Hasbro Pulse (the company’s 2DC platform) and its licensing business posted strong fourth-quarter growth, and the company is making big strides in the implementation of ‘Blueprint 2.0’, which in an official statement was described as having ‘a heightened focus on innovation, data driven investment in key brands and disciplined cost management’.

Part of the Hasbro transformation has been the laying off of 15% of the company’s global workforce, some 1,000 jobs. This was not something anyone wanted to see, least of all Hasbro, but, as Joao explains, it is a necessary part of securing the future success of the company and the roles of the 85% of employees that remain.

“You can see the passion people have for Hasbro as soon as you start walking through these offices,” Joao says, gesturing around him. “They truly are wonderful, and many have been here for a long time because they love what they do. It’s very difficult to let such employees go – and it’s very important that we treat them right during this process, showing them the respect they deserve and making sure we help them transition to their next employment as much as we can. However, we need to be a profitable business, and redundancies, as many companies know, are a hard but often inescapable part of any transformation.”

Hasbro is also simplifying and consolidating its business model. Since Toy World first met Joao at Spielwarenmesse, Pacific and Latin America have been assigned to his remit alongside EMEA and Asia, grouping Canada and North America (countries with the biggest similarities) together, with EMEA, LATAM and Asia Pacific forming another group. Ultimately, Joao and the rest of the leadership team are approaching Hasbro almost as if it were a new company - only one with iconic household brands already in its portfolio. This is both a blessing and a curse, Joao explains. “When dealing with a 100-year-old company, you’re clearly going to have a lot of history tied in that you need to try and work with,” he says. “At the same time, it’s great having that century of experience, knowledge and brand ownership – it’s a privileged position to be in.”

Blueprint 2.0 is going to require plenty of consumer involvement. Noting that no-one knows consumers better than the consumers themselves, Joao says he wants to tap into their feedback to gain direct insight into the most popular play-patterns, brands and licences. He’s also keen to see the different facets of Hasbro meshed seamlessly with other complementary areas to strengthen the entire business and improve overall efficiency. Hasbro’s Entertainment business, eOne, boasts powerhouse pre-school brands in its portfolio: how can Hasbro further leverage brands including Peppa Pig and PJ Masks across the core toy & game arm? How can the technologically-driven Wizards of the Coast, in which Joao sees similarities with Apple and Google, be intertwined with more traditional parts of the business to create a stronger, enriched consumer experience that transcends ‘just’ play or entertainment? These are the questions – the big questions – that Joao and his team are setting out to answer.

“Our Wizards business has a lot of experience in dealing directly with consumers thanks to our direct-toconsumer platforms (e.g. MTG Arena, Secret Lair) and the Wizards Play Network [WPN],” he explains. “Our WPN Retail Specialists have frequent conversations with WPN Premium retailers, as well as constant contact with Wizards fans. If we can bring this thinking, this approach, to other areas of the business, the better it will be for everyone.”

Another core tenet of the Blueprint 2.0 strategy is ‘Fewer, Bigger, Better’. With so many brands to get lost in, Hasbro is having to really home in on its strongest players and highest-performing categories, driving them forward with major new exploration of licensing opportunities and investment in range extension. Elsewhere, carefully selected brands are being offered to licensees able to leverage them to best effect.

Recent examples of this include a worldwide master consumers visit stores and take part in really engaging classes. Granted, Apple is a different animal to Hasbro, but myself and the rest of the leadership team still want people to walk into a store and enjoy a memorable experience with our products. I’m very happy to see the likes of Hamleys, Game and Smyths pushing this from their side, and I know there are plenty more retail opportunities and experiences still to explore. Let’s make toy shopping fun and lean into all the knowledge and expertise our retail partners have to make shopping for Hasbro toys a play event in itself.”

Games remains a big part of the Hasbro business, one that Joao says the company is ‘bullish’ about. As a result, both the Wizards and Magic: The Gathering teams are being moved (metaphorically) much closer to the company’s Board Games team in a development that will create a true powerhouse category for Hasbro, and one that will be able to fully realise the as-yet untapped potential of the space. Action Figures is also a priority category. Hasbro enjoys long-term partnerships with licensors, plus unfettered licensing access to its

own Transformers and Power Rangers franchises and much more, making this a key pillar of the company’s turnaround strategy.

Creative brands continue to perform well, with the likes of Play-Doh showing considerable potential for growth and expansion, while Nerf will benefit from exciting plans set to introduce plenty of newness to the Outdoor category thanks to licensing agreements with the likes of outdoor specialist Franklin Sports. And PreSchool, of course, will remain a staple for Hasbro, with Peppa and PJ Masks continuing to lead from the front.

We asked Joao to outline some of the product and content launches he’s most excited about for 2023. As is so often the case, much of what he would have loved to tell us about is under embargo - but anyone who visited Hasbro’s bustling stand at Spielwarenmesse earlier this year could probably hazard a guess at some of his answers. Toy World’s Rachael Simpson-Jones had the pleasure of competing against Hasbro’s Craig Wilkins, senior vice president Marketing, EMEA & Asia, on one of the company’s new games – and it’s definitely an early contender for game of the year, as far as we’re concerned.

Elsewhere in games, Hasbro’s board game Hero Quest also continues to resonate among its modest but committed and enthusiastic fanbase, with support behind the game system offering fresh experiences for players both new and existing. And Cluedo: Treachery at Tudor Mansion, a fun twist on the traditional sleuthing gameplay that taps into both the escape room and crime-solving trends, has apparently become a Sebastian family favourite.

Joao was more able to talk about some of Hasbro’s content slate, which recently saw Dungeons & Dragons: Honour Among Thieves enjoy its red-carpet UK premiere. Toy World’s very own John Baulch was in attendance, (nearly) rubbing shoulders with Chris Pine, Michelle Rodriguez and Regé-Jean Page, and –along with many actual film critics – says the movie is very, very good. Hasbro has launched a full toy range comprising action figures, Dicelings, retro collectibles and licensed products including plush, food & beverage, offering something for a wide range of consumers. A self-confessed fantasy geek, Joao is also hugely looking forward to the June arrival of Magic: The Gathering’s Lord of the Rings: Tales of Middle Earth, as strong a licensing collaboration as readers are likely to see, and a range that is fuelling plenty of excitement among players.

Another June launch, and bolstering the eOne movie slate this year, Transformers: Rise of the Beasts arrives in cinemas next month. Early on, when the trailer first came out, this caught our attention as hugely toyetic movie with vast potential in the toy category. Directed by Steven Caple Jr. (Creed II), the film’s new Maximals characters – animal robots – have translated brilliantly into licensed action figures, while the film’s themes and 90s vibe also lend themselves to play sets, collectibles and more.

Hasbro clearly has much to look forward to this year, but Joao nonetheless concedes that challenges remain, as they do for many companies in the current climate. A weaker than expected Q4 means Hasbro came into 2023 with a surplus of retail inventory, though the situation is being closely monitored and is improving. Q2 is likely to be slow, but as it stands, the second half of year is when we’ll see things really begin to pick up.

“I’m confident in our line-up for the rest of this year and that we’ll see a much stronger Q3/Q4 than we did in 2022,” explains Joao. “Keeping our brands intact is always a priority and we therefore tread carefully when balancing short term hiccups against long-term strategy and success."

Joao went on to tell us that he firmly believes that despite its recent trials and tribulations, Hasbro is in a very strong position. As he puts it, if he didn’t believe that, he would have stayed at Apple. He’s very clearly a man with a plan, one that will help Hasbro realise its full potential, and he says that while change can be scary, particularly for a 100-year-old company, it can also be exciting.

“Walk around and talk to the brilliant people we have here at Hasbro, and you will immediately see that they’re keen for the company to be better, to evolve and keep pushing forward,” Joao says. “We want Hasbro to be a company where creatives can leverage all their skills against our amazing brands to come up with things that are new and special, and we’re attracting some really top-tier talent that’s doing just that. At the same time, we need to be focused on what’s working, willing to concede on what’s not, and accountable and committed to following through. But we can’t do it alone: our key retailers, licensors and licensees are a vital part of making Blueprint 2.0 happen. We’re undergoing a transformation but it’s a very positive one - and you’ll see that in the years to come.”