By Mark Seavy  

Mattel and Hasbro are sharpening their focus on—and deepening their investment in—digital offerings. 

That transition was underscored when the toymakers released their Q4 and year-end earnings this week, with executives from both companies laying out digital-heavy strategies.  

And while the toy industry’s pursuit of gaming and filmed entertainment (on both a licensed and non-licensed basis) is not new, the recent increase comes amid slowing sales of traditional toys. 

Mattel, for example, posted a decline in Q4 sales of dolls, infant, toddler, and preschool products with Barbie-related revenue flat during the quarter and down for the year, company executives said.  

Hasbro’s sales for Magic the Gathering digital and card-based games, however, soared 86% in Q4 ($630 million) and 45% ($2.2 billion) for the year. And while Hasbro licensee Scopely’s Monopoly Go! mobile game generated $168 million in annual revenue, there was much less of a focus on more traditional toys during the company’ conference call with analysts and investors. 

The traditional “kid-oriented, one-off purchase” toy business still has potential for innovation but is in a “structural set of decline,” Hasbro CEO Chris Cocks said. Mattel, meanwhile, is aiming to extend “physical play to the virtual world by creating digital experiences and games” based on its IP, CEO Ynon Kreiz said. 

Sales of traditional toys have been soft and will continue to decline over the next several years, Cocks said, attributing this trend to birth rate declines and the fact that children are making the switch to digital at earlier ages. “If you ask me how the side of the toy industry Hasbro is investing in [digital] is going to do, it is pretty robust growth,” he said. 

As part of its effort to expand in the digital business, Mattel is buying out its partner NetEase in their joint game development venture Mattel163 for $159 million. The venture, formed in 2018 and valued at $380 million, has released five mobile games, including Uno! Mobile, Phase 10: World Tour, Skip-Bo Mobile, Uno! Wonder, and Uno! Arcade Edition. The wholly owned Mattel163 plans to release additional titles with a focus on Barbie, Thomas the Tank Engine, Fisher Price, and Hot Wheels. 

Hasbro, meanwhile, is planning to release two self-published titles in 2027, including the role-playing game Exodus, which has been under development with Archetype Entertainment since 2019. The Dungeons & Dragons-inspired game Warlock is also being designed by Invoke Games. 

And while both companies are focused on digital opportunities moving forward, they released very different Q4 2025 and year-end financial results. 

Hasbro’s consumer product sales rose 7% ($800 million) in Q4, while those for Wizards of the Coast (Magic the Gathering, Dungeons & Dragons) jumped 86% in benefiting from licensing agreements with Teenage Mutant Ninja Turtles, Marvel Superheroes, The Hobbit, and others. The company is forecasting a 3-5% increase in revenue for 2026. 

Mattel, meanwhile, reported Q4 net income of $106 million, down from $141 million a year earlier. And while Q4 revenue rose 7% ($1.76 billion), it was short of Wall Street expectations ($1.83 billion), sending the company’s stock down 26% on February 11 to $15.73. Mattel’s December sales fell short of forecast and capped a year of “uncertainty” in which retailers delayed orders amid the imposition of tariffs, Kreiz said. 

Moving forward, many in the toy industry believe the growing focus on digital could alleviate some of the category’s current pain points.  

“These are going to be gamified product opportunities, entertainment and event-driven kinds of brands that supercharge in our distribution,” Cocks said. “They are multi-purchase and highly collectible, and they are multi-generational. And that is true on the toy and game side of the business.”