Toymakers Prioritize Digital-First IP
Toy companies Hasbro and Mattel are reportedly under increasing pressure to expand their digital and gaming portfolios. Digital-first intellectual property with proven audience traction is now viewed as the primary engine for multi-format expansion, making studios with strong digital validation prime acquisition targets.
- Between the first quarter of 2020 and the second quarter of 2024, strategic buyers deployed $40 billion across 325 acquisitions in the content media and animation sectors, with an average transaction size of $144 million. - Animation studios are increasingly using generative AI for pre-production tasks; Paris-based Animaj, for example, developed a proprietary AI to create 3D motion from text prompts, aiming to increase its production capabilities by a factor of ten. - In a move to own its digital pipeline, Mattel is acquiring the remaining 50% of its mobile games studio, Mattel163, from partner NetEase in a transaction valuing the studio at $318 million. - Streaming platforms now serve as incubators for new IP, with successful shows like "Bluey" on Disney+ becoming major consumer product lines, validating audience demand before a wider toy rollout. - The family dynamic of content consumption has shifted, with 73% of parents reporting that they co-view at least half of the content their children watch, making family-focused content more valuable. - While new kids' show commissions in the U.S. are declining, acquisitions are increasing; in 2023, studio-owned platforms added 1,557 acquired shows, nearly double the 804 from 2022. - Parents rely heavily on digital sources for parenting guidance, with up to 98% using online resources to inform their decisions, highlighting the importance of presence on parenting blogs and social media. - Apple's Vision Pro introduces spatial computing that frees applications from the boundaries of a display, creating potential for new immersive educational and entertainment experiences that blend digital content with the physical world.
