Hasbro still hasn’t learned that money can’t replace expertise, so they’re in for a few more stumbles.
Just two years after boasting about the success of its video game business, Hasbro recorded a $56 million non-cash impairment charge in its second-quarter financial report. This charge resulted from canceling several games in development that were expected to launch in 2028 and beyond. This $56 million is not a direct loss. Rather, it represents an unexpected write-down relative to an asset’s book value, separate from normal depreciation.
Just a few years ago, inspired by the massive success of Baldur’s Gate 3, Hasbro was all in on video games. By 2022, half a dozen game studios were working on various projects under the company’s umbrella. Two years later, Dan Ayoub, the head of digital product development at Wizards of the Coast, owned by Hasbro, quantified this effort. He stated that games worth more than $1 billion were in development and that video games were an integral part of Hasbro’s strategy for the next 100 years.
Since then, however, things haven’t gone particularly smoothly. The big-budget G.I. Joe game announced in 2021 is in trouble. Earlier this year, the deal for a new D&D game from Stig Asmussen’s Giant Skull studio was canceled. This is all overshadowed by Baldur’s Gate 3. Three years after the release of version 1.0, tens of thousands of people are still playing it, yet Hasbro has not announced any kind of sequel. Hasbro did not specify which game cancellations resulted in the $56 million impairment charge. Exodus, a game similar to Mass Effect and led until recently by BioWare veteran James Ohlen, is still in development. However, the fate of the G.I. Joe game is less clear. In February, Hasbro told WCCFTech that the game had not been canceled despite reports to the contrary. The development team is taking time to assess the game’s future direction.
The strategy will focus on card games and RPGs. Hasbro already has strong titles in these areas, including Magic: The Gathering and Baldur’s Gate 3. As Hasbro CEO Chris Cocks reminded the audience, Baldur’s Gate 3 is one of the biggest and most award-winning RPGs of the past decade. Cocks stated that 2026 is expected to be the company’s peak year for digital investments, driven by Exodus and Warlock. The goal is to reduce digital spending by at least 25% annually by 2028. They plan to achieve this by relocating development to lower-cost regions and utilizing more mature tools, teams, and production processes. Although AI wasn’t specifically mentioned, Cocks has previously expressed enthusiasm for generative AI. The company recently came under fire after allegedly trying to persuade the child actors from Peppa Pig to agree to have their voices used for AI development.
“Over the last several quarters, we have reviewed our portfolio and updated our plans for Hasbro’s digital future. This work included canceling several games scheduled for release in 2028 and beyond, as well as recording a $56 million non-cash write-down this quarter for related capitalized costs. We are focusing our digital investments on the franchises, platforms, and partners where we see the clearest upside and where Hasbro has the strongest chance of success. So, our digital strategy is straightforward. We are removing lower-conviction projects from the portfolio, reducing our annual spending, and concentrating investment in areas where Hasbro has the best chance of building durable digital franchises: Magic, D&D, owned platforms, partner-led economics, and a concentrated number of high-conviction owned titles,” said Cocks during an investor call.
Perhaps they should admit that they lack the know-how. Google also failed with Stadia Games & Entertainment.
Source: PCGamer, Hasbro, Hasbro, WCCFTech
