Hasbro Interactive

» see hasbrointeractive.com as it lived, on the wayback machine

~ the last words ~

Hasbro spent years and a lot of money on a virtual reality headset in the early 1990s and never shipped it. Its 1995 annual filing books a 31.1 million dollar nonrecurring charge for a discontinued development project, and that write-off is the thing that turned the company toward CD-ROMs instead. At the Tokyo Toy Fair in 1995 the chairman told a Parker Brothers executive named Tom Dusenberry to write a business plan and go to market. Dusenberry took five people out of the board-game division and set up in Beverly, Massachusetts, deliberately away from the rest of the company.

The first years were exactly what you would expect and they worked: Monopoly and Scrabble on CD-ROM, then Battleship, Yahtzee, Candy Land, Play-Doh and Tonka trucks. The division paid an internal licensing fee back to the parent for the right to use Hasbro's own properties, which is a strange arrangement but kept everyone honest about where the value sat. In 1997 two of its titles were in the US industry top ten. Revenue went from 35 million dollars to 86 million that year and to 196 million the next, and 1998 closed 23 million dollars in profit.

Then it started buying things. Avalon Hill in August 1998 for six million dollars and around three hundred games. MicroProse, through a cash tender offer that closed on 14 September 1998, for approximately seventy million. Europress in the UK the following summer. It had bought Atari in February. Somewhere in there a plan formed to reach a billion dollars of revenue within three years, a target that meant something close to doubling every year, and nobody in the building stopped it. Dusenberry reportedly wanted to buy Electronic Arts.

~ the record ~

~ the atari problem ~

The purchase that outlived everything else is recorded in a filing by the seller, and the seller was a hard-disk company. JTS Corporation had absorbed Atari Corporation in a 1996 reverse merger and wanted nothing to do with the result. Its filing reads: on 23 February 1998 JTS sold substantially all of the assets of the company's Atari Division, consisting primarily of Atari home computer games and the intellectual property rights and license agreements associated with them, to a wholly owned subsidiary of Hasbro Interactive, for 5,000,000 dollars in cash.

Five million dollars in cash for Centipede, Missile Command, Pong, Breakout and the name on the front of them. The subsidiary that held it, originally called HIAC XI, was renamed Atari Interactive in May 1998, and the compilations started appearing the following year. Then on 14 May 1999 Hasbro Interactive put out a press release from Beverly announcing that it had released all rights it might hold to the Jaguar hardware, because there was a passionate audience of diehard Atari fans who wanted to keep the system alive and the company did not want to prevent them. Developers could ship Jaguar software without a license as long as they left the trademark alone. That is a games publisher giving away a console platform for nothing, in writing, and it is the reason Jaguar cartridges are still being manufactured.

~ the returns ~

The thing that broke it is unglamorous and specific to the industry it had just walked into. Toys are sold on strict return terms. Software in 1999 was sold on publishing terms, which meant retailers could send back what they could not shift. Returns from the 1998 holiday season were heavy enough to recast a year that had looked excellent into a year that looked ordinary, and the 2000 returns were heavy again. On top of that, Hasbro had rolled out a new financial reporting system built for toy logistics, and the head of the division later described its effect on his unit as a disaster: his managers could not see channel inventory or their total commitments to outside developers.

The numbers in Hasbro's own filings are brutal once you line them up. Net revenues for the interactive business held for sale: 197 million dollars in 1998, 237.2 million in 1999, 194.3 million in 2000. Operating loss: 2.1 million, then 124.3 million, then 104.2 million. Hasbro's share price went from 37 dollars in spring 1999 to 11 by mid-2000, and the group posted its first annual net loss in over twenty years. In March 2000 the billion-dollar goal was formally replaced with a 300 million dollar long-term target, which on a board slide is what taking the keys away looks like.

RollerCoaster Tycoon, written almost entirely by Chris Sawyer in Scotland, was the best-selling PC game in the United States in 1999 and was still selling. Hasbro Interactive published it and did not build it, so the division's biggest hit across six years of trading had come from outside the building.

~ what infogrames did with it ~

Hasbro announced the sale on 6 December 2000 and Infogrames closed it on 29 January 2001 for ninety-five million dollars in Infogrames stock, about 4.5 million shares, with another five million in cash. Bundled into the same deal was a fifteen-year exclusive license to make games from Hasbro properties. Hasbro booked a 44 million dollar pretax loss on the sale itself. The Infogrames announcement said the business would use the Infogrames name and branding immediately, and in February they cut forty of the hundred and fifty people in Beverly.

What happened next is one of the more confusing rename chains in games, so here it is in order. Hasbro Interactive became Infogrames Interactive in January 2001. In October 2001 that entity licensed the Atari brand back out to Infogrames' own operations, which is how Atari returned as a publishing label. In May 2003 the whole group reorganized under the Atari name and Infogrames Interactive of Beverly merged into the Atari Interactive it had itself created in 1998. The Beverly offices closed around April 2005. In June 2005 Atari sold the Hasbro license back to Hasbro for 65 million dollars, and in July 2007 sold the remainder back for 19 million. Infogrames Entertainment renamed itself Atari SA in 2009 and filed for protection in 2013.

This was American boxed retail software, shrink-wrapped and stacked in Toys R Us, and that retail channel, the thing that actually killed it, is a piece I never once saw from Turkey. What crossed over instead was the catalog itself, floating free of whoever happened to own it that month. Nobody playing Centipede in 2003 was checking that the rights had passed from a hard-disk maker to a toy company to a French publisher. The games were older than any of those owners and they outlasted all of them.

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