Battleship movie flops and G.I. Joe movie delayed, what next for Hasbro’s movie strategy?
That headline is not one that Hasbro would have wanted or anticipated. In fact many commentators have foretold doom & gloom based on the accumulated (apparent) negative effects of Battleship’s undoubtedly disappointing box office numbers, and the postponement of the G.I. Joe movie sequel, G.I. Joe: Retaliation.
However, as with all challenging times in business, the critical factor in progressing on to success is to get a sense of scale of how bad or not so bad the situation is. It’s easy to be caught up in the hyperbole of negative headlines, and a sudden and dramatic change in execution, thus predicting nothing but doom and gloom ahead, but that approach can often be short sighted.
So on the negative side, there is no avoiding the fact that the only conclusion to be drawn from Battleship is that you can’t rely on an established Toy/Game Brand alone to drive successful movies. No great surprise there really. There are probably some conclusions to be reached in terms of the marketing of the movie & the cinematic experience, but I’m not qualified to reach those conclusions, so will leave that to the movie pundits. The longer term negative implication though, is that if established brands don’t mean high likelihood of box office success, then a question mark remains over the future transformation of other Hasbro franchises, especially flagship Brand Monopoly, into movies. So that’s a definite negative factor, as that has been a much trumpeted part of Hasbro’s long term Brand and commercial strategy.
As far as G.I. Joe is concerned, while the movie hasn’t launched yet, there is no doubt that both Hasbro & Paramount have received a bloody nose due to delaying the film. Paramount because of all the investment in the movie to date, marketing investment that is now gone, and the fact they will have to wait longer for whatever ROI is due. Hasbro because they have to front up to retailers and take their medecine for postponing a significant sales event out of this sales year into next…that won’t be pretty for those at the sharp end of the retail backlash!
All of which seems like particularly bad news if only seen from a tactical short term perspective.
However, thing’s are not as bad as some commentators have suggested. Here’s why:
Firstly, transforming established board games Brands into movies has not been proven to be a smash hit success previously, and as such was always a speculative punt worth testing. Although my memory may fail me, and I am happy to be corrected on that if it has, the only board games related movies mass market released that I can remember are Clue back in 1985, and Jumanji in 1995. Neither of which were runaway smash hits, although Jumanji did fairly well. So if anything, the Battleship movie has created a question mark, but one which can be clearly associated with trying to turn board games into action movies, not necessarilty all Toy Brands, just board games.
In which case, launching with Battleship to test the waters (excuse the bad pun!) ahead of Hasbro’s heavy hitters such as Clue (Cluedo) & Monopoly, has proven to be a sensible course of action, as there can be no damage or negativity associated with those ever critical Hasbro Brands. For this Hasbro’s management team should be praised, because it would have been all to easy to rush through the Brands with highest mass market commercial potential, chasing the big payday at the cost of prudent Brand management.
So Hasbro still have all options open to them. Moreover, while there is massive risk in launching new Movies, just because Battleship didn’t go well doesn’t equal quid pro quo that no board games Brand will translate to box office success. Sometimes Movies fail, despite having great casts, despite strong marketing & massive investment. Hollywood itself does not have a perfect track record. The recent performance of Disney’s John Carter would be evidence of this.
So from Battleship, the conclusion could be that Battleship as a Brand may have been a little 2 dimensional – lacking in ‘universe’ and back story to drive the Movie. That simplicity of the Brand is to be expected as it’s a game targeted at young Kids, with low complexity/layers. Whereas Hasbro’s Family Games Brands have a much richer resource pool to create Movies around, and regardless of the current furore, I believe they will come back to the fore, albeit maybe not for a few years now.
For G.I. Joe, things are different. There has already been a movie in recent years. it did quite well, albeit no Transformers, but both Hasbro & Paramount know where they are starting from. Also, action oriented Brands have a much greater history of driving box office success than board games Brands, as there is a clear and compelling cinematical format. People going to see an action movie know what they are going to get, so the result is to a degree at least, more predictable in commercial terms.
Furthermore, 3D is proven to enhance box office results, meaning more bums on seats, and therefore likely to drive higher merchandise sales. So if the effect of the delay is to add 3D to the formula, that is not a bad thing in terms of results when the movie finally comes out.
And while both Hasbro & retailers may lose an opportunity in 2012, both have a vested interest in maximising sales success of both the Movie & the G.I. Joe Brand.
We also need to recognise that the G.I. Joe Brand is less well established internationally outside North America, and therefore, any significant short term sales hit in 2012 would be swallowed to the greatest degree by the N. American segment…leaving ‘International’ if not quite impervious, at least not suffering to the same degree.
At the same time, The Avengers appears to be hitting high expectations. At the box office it has already blitzed two of the Transformers movies, and is significantly ahead even of Transformers: Dark of The Moon’s awesome $1.1billion box office. At the time of writing, The Avengers has already taken $1.3billion globally at the box office. (All figures from boxofficemojo.com).
The Avengers also appears to be performing fantastically well at retail, with Tesco’s Buying Manager in the UK stating that The Avengers has been “breathing new life into the action figures market”.
So here’s the thing, Hasbro have their own Brands out there, both obvious stars and more speculative punts, while managing the risk and maximising sales via 3rd party Movie driven Licenses. That seems prudent, both in terms of short term and long term value and success.
The other broader point to make is that everybody knew Transformers had the right stuff (in this CGI driven Movie environment) to deliver massively compelling action movies. Hence the fact we’re already heading to a 4th movie, predicted to be launched in 2014. So Hasbro’s Movie strategy still has more oomph yet to come, guaranteed.
It astounds me how quick some are to dismiss a sound and robust long term strategy because of setbacks along the way. No trend driven business ever went smoothly all the time, and setbacks are a critical part of our business. If we run from the risk of failure, we will not succeed in an industry where 60-75% of sales are from new SKUs, each and every year.
Setting out to turn a Toy company into an Entertainment driven company was never going to be a straight line upwards to massive success. In fact the barnstorming, runaway success of Transformers may have set the bar too high. Not every pitch gets hit out of the park, but in the end it’s about averages, and hitting the runs that count – the ones that win the game. So Battleship may have ‘struck out’, but the beauty of having a strong portfolio of Brands like Hasbro do, is that there is always another batter ready to step up to the plate. Not every brand will hit a Transformers style home run, but you don’t stop playing the game because of one out.
One bad result does not mean a flawed approach.
Perspective is critical at times like this. Sometimes things don’t go as planned, but that’s no reason to catastrophize. In my view, Hasbro’s management have taken tough calls, invested wisely and protected key Brand assets. All while taking speculative, calculated, and in the end, essential risks to lay long term foundations for success.
All the best
P.S. For updates & insight on the Toy industry, and to get a Free Guide on how to avoid most common Toy industry mistakes, please click here:
N.B. Do NOT regard the content of this article as investment advice. We are Brand marketers, not investment advisers. Always seek qualified advice before taking investment decisions (this article does not represent qualified advice). The opinions and contents herein are published in the UK under UK law by RG Marketing Ltd, as the official opinion of RG Marketing Ltd, expressly not as the personal opinion of Steve Reece, or any of the directors or employees of RG Marketing Ltd. Please also note as a clear expression of where this article comes from, Steve worked for Hasbro for some years, and has a true affection for the company, it’s possible therefore that this article may be positively biased.