Plenty of ink has been spilled discussing the ongoing transitions in the game industry among legacy game makers: developers, publishers, console makers, platform holders, and so on. Less discussed, however, has been the overlap with the most traditional of game makers: toy companies.

The toy business has long overlapped with video games, of course, but recent months and years have seen a number of important changes. 

There has been a larger demographic shift toward video games as the primary form of entertainment for younger generations. Not only do younger generations increasingly prefer to spend their time with digital games, but the game industry as a whole has dwarfed the physical toys industry. 

At the end of 2024, the global toy industry was sized at $111.8B, growing only 3% from the prior year with a CAGR of 4% since 2019 (according to Circana). Contrast that with gaming, which was more than double the size at $239B in 2024 — and that was even after the industry had contracted by 7% from previous highs in 2022 (according to ALDORA).

Rising to meet the demands of Gen Z and Gen Alpha have been the now-dominant UGC platforms of Roblox, UEFN, and Minecraft. More recently, the toy industry has been faced with exogenous pressures from international tariffs and the United States’ ongoing trade war with China and other nations that are home to much of the manufacturing base for Western toy companies. 

Given all of that, we thought it was worth checking in on some of the market leaders in this space to see how they’re navigating the choppy waters of the game industry. Specifically, we’ll focus on three leading North American companies: Hasbro, Mattel, and Spin Master. 

Each boasts a suite of strong toy brands and, even more interesting for our purposes, has taken meaningfully different strategic positions relative to the game industry. Each also represents a different size benchmark: Hasbro has a $10.65B market cap (at the time of writing). Mattel is just over half that at $5.54B, and Spin Master is even smaller at $2.55B CAD (about $1.84B USD). Considered together, these companies offer an interesting set of case studies for any brand holder looking to expand into new forms of media.

Hasbro

As the most successful of the three companies we’ll examine today, Hasbro has deftly combined a highly successful licensing strategy with a burgeoning self-publishing arm into a strong wave of recent momentum. The stock is up roughly 37% year-to-date compared to declines for the other leading toy companies.

Hasbro has consolidated its gaming efforts under a business unit called “Wizards of the Coast & Digital Gaming,” which includes both digital games and tabletop products (primarily Dungeons & Dragons and Magic: The Gathering). In 2024, that unit contributed $1.1B of a total $4.1B in revenue for the company at a 41.8% operating margin, after being the only Hasbro business unit to show any revenue growth (10%) in 2023. 

The company has thus far built on that momentum in the first half of 2025, with business unit revenues up 28% and operating margins up 47.9% (relative to a 7% increase in overall corporate revenue and a 33.6% decline in H1 ‘25 operating margin). 

Digital games inherently have better margins than physical toys, but a major contributor to recent growth has actually come from Magic: The Gathering. The company recently launched a themed Final Fantasy set that resulted in its most popular release of all time, racking up $200M in sales in a single day. By comparison, a previous Lord of the Rings-themed set took six months to achieve that same performance. 

Relative to some of its competitors, Hasbro also touts a more diverse set of brands when it comes to gaming. Casual, family-, and kid-friendly brands are the norm among toy makers, and Hasbro certainly has those in spades: Monopoly, Peppa Pig, My Little Pony, and others. However, the company also has several brands that lend themselves to more “traditional” midcore or hardcore gaming implementations with the aforementioned Magic: The Gathering and Dungeons & Dragons, as well as G.I. Joe, Transformers, and Power Rangers. 

It’s also worth mentioning that the company has a long history of developing tabletop board games (notable titles include Clue/Cluedo, Diplomacy, and Risk, among many others), so perhaps it should come as little surprise that the company has transitioned naturally into digital gaming. 

Supporting these efforts is a team of experienced gaming leaders, starting with CEO Chris Cocks. Since taking over in 2022, Cocks has returned the company to growth by exiting noncore businesses, controlling costs, and building a robust gaming arm. Prior to leading the company, Cocks was head of the Wizards of the Coast & Digital Gaming segment for four years and previously held senior management positions in Microsoft’s Xbox Games division. 

Cocks’ successor in the Wizards of the Coast & Digital Gaming segment is John Hight, another seasoned gaming executive who previously led the Warcraft franchise as a senior vice president and general manager, racking up 12 years of tenure at Blizzard Entertainment. Additionally, Hasbro added two seasoned gaming CEOs to its board of directors in 2024: Owen Mahoney and Frank Gibeau.

Headlining the achievements of Hasbro’s gaming team are two recent mega-hits in Monopoly GO! (licensed to Scopely) and Baldur’s Gate 3 (licensed to Larian Studios). While acknowledging that these two titles are truly “N of one” successes and that there is some amount of confirmation bias (and luck) associated with them (could anyone have predicted the magnitude of these hits?), management must still be commended for stewarding the licensing agreements, cultivating these partnerships, and trusting these expert game makers with their IPs. 

Beyond these and other licensed games, Hasbro also maintains a stable of first-party studios. The company has invested north of $1 billion into four AAA studios: 

• Archetype Entertainment, creator of forthcoming AAA sci-fi RPG Exodus: Become the Traveler.
• Atomic Arcade, working on a AAA game based on Snake Eyes (of G.I. Joe fame).
• Invoke Studios, developer of 2021’s Dungeons & Dragons: Dark Alliance.
• Austin-based Skeleton Key, founded in 2022, working on an as-yet-unnamed AAA project.

Hasbro has stated its intent to continue investing $100M-$150M per year into game development, with plans to release one to two titles per year. These will primarily be AAA titles, while the more casual and family-friendly IPs are serviced via licensing agreements. 

Betting on AAA game development certainly comes with its risks, but the potential upside is large too. As long as Monopoly GO! and Magic: The Gathering keep printing money for the company, Hasbro will have a safety net to support continued investment in big bets. Expect the Wizards of the Coast & Digital Gaming segment to continue its growth as the Consumer Products and Entertainment units fade in importance moving forward.

Mattel

Mattel has been less aggressive in its pivot toward gaming compared to Hasbro, preferring to prioritize its physical toy business. The company is decidedly toy-first, as evidenced by its earnings presentation materials.

Unfortunately, it is difficult to separate out the game business on Mattel’s financial statements. The company includes it in a catch-all “action figures, building sets, games, and other” category (“dolls,” “vehicles,” and “infant, toddler, and preschool” are the other three). 

Though we don’t have gaming specific numbers, we can see that the miscellaneous bucket that includes games has consistently contributed roughly 17-20% of total gross billings over the last several quarters dating back to mid-2022. At minimum, we can say gaming has not meaningfully changed Mattel’s financial trajectory as yet. 

In fairness, one could argue Mattel has more “classic” toy-centric brands than other competitors. IPs like Barbie, Hot Wheels, American Girl, Masters of the Universe, and many others originate in toys (rather than, say, collectibles or board games), and continue to do strong business with physical goods and licensing across other forms of media. Take 2023’s highly successful “Barbie” movie for example, or Mattel’s ongoing partnership with Netflix for a variety of streaming shows. Mattel also has a full slate of forthcoming feature films leveraging brands like Matchbox, Masters of the Universe, and Monster High, among others.

Nevertheless, Mattel has made attempts to reinvigorate its gaming presence. The company appointed former Activision Blizzard Chief Strategy Officer Ken Wee as its new executive vice president and CSO last fall — reporting directly to CEO Ynon Kreiz — in an effort to “further [the company’s] aim to unlock the full value of [its] IP outside the toy aisle.” 

Recently, former EA and Kabam executive Devin Nambiar announced he’d be joining the company as COO of Mattel163, a joint venture with NetEase that includes mobile card and puzzle titles like UNO!, Phase 10, and Skip-Bo. 

The company touted a “first quarter net income contribution [increase of] nearly 75% from the prior year” in its Q1 earnings call, but one has to assume that the increase is off of a meager baseline figure. 

According to Sensor Tower, Mattel163’s biggest games by far are UNO! and Phase 10. UNO! netted roughly $37.6M in 2024 revenue and so far is on pace to post a similar figure based on performance during the first half of 2025. Phase 10 shows similar results ($46.2M in 2024 revenues; $25M year-to-date in 2025, but steadily declining). These numbers are certainly nothing to scoff at, but they are a drop in the bucket relative to competing toy companies with an active gaming presence like Hasbro or Bandai Namco. None of the other Mattel games (on Sensor Tower, at least) come anywhere close to these two in terms of revenue or downloads. 

Beyond Mattel163, the company has worked with GameFam on various Roblox experiences, and has struck a partnership with Outright Games to develop console and PC titles using Mattel brands. The Roblox initiative in particular is notable, if only for its success as an engagement tool: According to RoMonitor, Mattel’s Barbie DreamHouse Tycoon has generated more than 450M lifetime visits to date. 

Mattel has also stated its intent to begin self-publishing, with Chief Franchise Officer Josh Silverman claiming that the initiative would “significantly increase the revenue and profit potential at low investment for the company, and … be a catalyst that drives the business forward.” 

We’ll have to wait to see if that plays out in earnest. During the Q2 earnings call, Kreiz noted the company was on track to release its first self-published title in 2026. In the meantime, the company did announce an interesting partnership with OpenAI to “bring the magic of AI to age-appropriate play experiences.” There’s no word yet on whether that will include games, though one would assume physical toys will be the priority.

Spin Master

Perhaps less discussed in gaming circles, Canada-based Spin Master is the company behind brands like “PAW Patrol,” Toca Boca, “Bakugan,” and “Unicorn Academy,” among others. Like Hasbro and Mattel, Spin Master operates primarily in physical toys, and is expanding into linear entertainment (films, streaming television) and games.

Spin Master’s digital game portfolio is anchored by the Toca Boca brand, which is stewarded by a Swedish developer of the same name (Naavik previously hosted the company’s founder, Bjorn Jeffery, on a podcast). Spin Master’s most successful game by far is Toca Boca World, a 2D kid-friendly sandbox/dollhouse game, which has consistently generated $7M-$10M of revenue per month for the last several years (according to Sensor Tower). 

The company also has another title (3D multiplayer game Toca Boca Days) in soft launch and a subscription-based collection of apps targeted at preschool aged children called Piknik.

Unfortunately, Spin Master has had a rough go of it of late in the game industry. The company made just $164.5M in revenue from its game business in 2024, a 5.4% decline from the prior year. In Q1 ‘25, Spin Master posted a slight quarter-over-quarter increase in revenue at $47.8M, but simultaneously showed declines in operating income and operating margin (down 9.4% and 40.1%, respectively) over the same time frame.

Additionally, the company laid off a number of employees from its Toca Boca studio in early July, shut down another studio (Nordlight, working on a match game based on the Rubik’s Cube brand), and paused development of two other mobile titles. The company appears to be reprioritizing and further consolidating its gaming efforts around Toca Boca and Piknik for the foreseeable future in an effort to get back to growth. 

Beyond its struggles in gaming, Spin Master faces the double whammy of tariffs imposed on toy products from China and tariffs imposed on Canadian goods entering the U.S. market. Earlier this month, the company appointed a new CEO (board member and ex-Warner exec Christina Miller) to lead the turnaround.

Takeaways

At the end of the day, toy companies are brand builders at heart. Physical toys, video games, movies, comics and manga, collectibles — these are all vehicles for delivering beloved brands to consumers. It just so happens that games are a particularly potent and sticky vehicle, particularly when it comes to the youngest audiences, and should continue to grow in importance among this demographic into the future.

Hasbro, Mattel, and Spin Master all recognize the opportunities presented by gaming and have each attempted to crack it in different ways. Yet, at a high level, similarities abound:

• All have leveraged licensing to varying degrees of success. 
• All have branded mobile games, with Hasbro and (to a lesser extent) Mattel expanding to PC and console. 
• All are involved with self-publishing in one form or another. 

So what is dictating the success or failure of these strategies? Is it simply the strength of each company’s respective brands? Or is it the ability of licensees, co-developers, or internal studios to execute effectively? 

Unlike traditional game publishers whose brands mostly originate from within gaming and seek to then expand outward to film, toys, or other products, toy companies’ brands come from physical products, which benefit from expanding into games and film. 

It’s far more straightforward to make the case that a successful game based on a toy IP will drive additional physical toy sales than it is to argue that a successful toy based on a video game IP will spur further unit sales or IAPs within that game. It’s almost the reverse of the transmedia argument over gaming franchises. If toy companies can successfully self-publish those games too, they then stand to capture a much greater margin (as opposed to splitting revenues with a licensee). To that end, it is unsurprising to see all three of these toy makers try their hand at self-publishing, particularly at a time when their core toy businesses are threatened by tariffs.

Hasbro, with its AAA investments and top-tier leadership team, appears most committed to becoming a full-fledged game publisher, more akin to an EA or Capcom than a classic toy company. But even Hasbro must navigate the high stakes of AAA development, where timelines are long, costs are ballooning, and hits are hard to predict.

Mattel, by contrast, seems to be taking a more cautious approach, focusing largely on mobile. Yet mobile self-publishing requires more than just development talent. And functions like user acquisition, product management, and analytics will need to be built out to support those titles. Perhaps a continued exploration of Roblox experiences will bear fruit for the company, but Roblox’s ecosystem requires its own specialized talent to take advantage of (to say nothing of its extremely prohibitive take rate). 

Spin Master, meanwhile, faces an uphill battle. Toca Boca World has proven to be a solid product, but launch delays, game cancellations, and studio closures do not speak well to the strength of the company’s pipeline. With new leadership in the chief executive seat, perhaps the company will be able to return to growth, though Miller’s background in TV content development does not indicate any sort of renewed priority on gaming. 

Ultimately, the real test for these companies isn’t whether they can make successful games, but whether they can turn games into key components of and engines for their broader ecosystems. Perhaps an interesting comparison here is Lego, which has transcended its roots in physical toys to attach its brand to all manner of gaming projects spanning PC, console, mobile, and now UGC platforms with its Epic Games/UEFN partnership. 

In any case, success will hinge on more than just IP strength; it will require sharp execution, a solid foundation of trust between toy companies and their development partners (in-house and otherwise), a deep understanding of gaming audiences, and the ability to create feedback loops between physical and digital worlds.

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