By Mark Seavy  

As the toy industry approaches the all-important holiday selling season, revenue is expected to improve in Q4—but not enough to offset a decline in the overall business for the year, Hasbro and Mattel executives said in releasing earnings last week. 

There are, however, signs that the business will improve in 2025. Next year’s theatrical release slate is a significant upgrade compared to 2024, with the addition of action blockbusters like Captain America: Brave New World (February 14) and The Fantastic Four: First Steps (July 25) as well as sequels for beloved children’s franchises like Paddington and Zootopia.  

But, then again, theatrical films are only part of the larger picture considering the explosion of streaming, social media, and other content sources. Mattel and Hasbro, while each still possessing significant film-related business for toys, are no longer as dependent upon it. 

Mattel, for example, forecasts a flat to a slight percentage decrease in sales for the year, but reported an expected increase in Q4. Consumers will focus on evergreen brands both licensed and non-licensed, a trend that has only picked up speed during the past few years, Mattel CEO Ynon Kreiz said.  

“We’re also seeing positive drivers for the industry overall in that more theatrical or toyetic theatrical movies are coming online,” Kreiz said. “You’re seeing a fast-growing adult segment—not just collectors, but adults buying toys. And all-in-all you have good, positive, healthy fundamentals.” 

While Mattel will rely on Barbie, Hot Wheels, and other franchises to drive traditional toy sales, mobile is increasingly becoming part of the mix. Mattel163, Mattel’s joint gaming venture with NetEase, is expected to generate $200 million in gross billings this year and has released Skip-Bo and Uno mobile titles. Mattel is also developing self-published titles and is collaborating with third-party licensees, one of whom is a “very strong studio,” said Kreiz, who declined to identify the company. 

Hasbro is also delving deeper into digital games. Its licensing agreement with Scopely for Monopoly Go! is generating $10 million per month in royalty revenue and will deliver $105 million for the year, CEO Chris Cocks said. And while downloads of the game declined earlier this year, they “stabilized” in September, Hasbro Chief Financial Officer Gina Goetter said.  

Additionally, licensee Larian Studios’ Baldur’s Gate 3, which was released last year, will produce $35 million in royalty revenue this year, Cocks said. Hasbro is also building out its Magic the Gathering business with new licensed decks, including those based on Marvel IP (Iron Man, Wolverine, Black Panther), that are due in December. 

“Digital gaming is where the consumer is heading, and we’re following our fans as they age up and look for their favorite brands on digital platforms,” Cocks said. “It’s what will make Hasbro a diversified, modern, growing toy and game company.” 

And while Hasbro and Mattel are both focused on digital gaming, there has been a divergence between the two companies when it comes to their approach to core properties. 

Hasbro continues to focus on Nerf, Monopoly, Uno, and other core IPs, choosing to “exit” other brands and license them out—including FurReal Friends (Just Play Products) and Littlest Pet Shop (Basic Fun). That outbound licensing has lowered Hasbro’s consumer products revenue, which is forecast to fall 12-14% for the year, but will boost more profitable royalty revenue. 

Mattel, in contrast, is cutting back on its baby gear and power wheels products but signing fewer outbound licensing deals than Hasbro, Mattel executives said. 

Yet both companies face challenges in select categories. Hasbro, for example, reported sluggish sales of Star Wars-related products in Q3 and more broadly with action figures. And Mattel’s doll sales have declined following the release of the Barbie film last year. 

“We continue to focus our strategy to grow our toy business and expand entertainment offerings,” Kreiz said. “We believe in the toy business, and we believe that the toy business is foundational for the opportunities we have outside the toy aisle. A strong toy business is good for our entertainment and franchise strategy and vice versa.”