Toys ‘R’ Us may not be the sole notable casualty of the influence of technology has in the toy industry. Sources of Wall Street Journal say that recently, Hasbro made an offer to acquire Mattel. It is not clear, what terms were offered by Hasbro or how responsive Mattel was. However, it would put two of the most famous kids’ brands together — Hot Wheels and My Little Pony would exist side-by-side. Both sides refused to comment regarding the apparent leak.
Hasbro is possibly taking advantage of the relative weakness of Mattel. While Hasbro has been experiencing high on sales of Disney-themed toys which include Star Wars as well as licenses for TV and movies, Mattel is in the middle of turning around years of failed toy lines that pushed the company down. Also, the two companies are complementary: where Hasbro discarded its manufacturing facilities a while ago, the company would get some back with a Mattel deal. There are fears that a Hasbro/Mattel agreement could violate US antitrust law by building a dominant toymaker. However, it is not certain that a union would face scrutiny that is as tough as for, say, a telecom.
If a deal did go forward, it would reflect the increasingly firm grip on the free time of kids of the tech industry. Although Hasbro obviously has the upper hand, both Mattel and Hasbro have to compete with tablets and consoles — how do you get parents to purchase Barbie playhouses when video games beckon? Also, it could produce long-term consequences for connected toys, too. Hasbro would hold a bigger stable of tech-driven toys and could fold the know-how of Mattel into its own projects.