Hasbro, the American toy giant, is actively looking to sell its renowned IP “Dungeons & Dragons” (D&D). Tencent, a prominent Chinese tech company, has emerged as a potential buyer. However, the negotiations are still in the early stages, and both parties have yet to reach a consensus on the transaction’s finer details.
Larian Studios, a successful game development company, is playing an intermediary role in this deal. Having won the TGA Game of the Year award in 2023 with “Baldur’s Gate 3,” Larian Studios is considered one of the most prolific D&D adaptors. Due to insufficient funds, Larian Studios introduced Tencent, its shareholder, to the potential acquisition.
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Hasbro boasts a rich history in the toy industry. With well-known IPs such as Transformers, Dungeons & Dragons, Monopoly, and My Little Pony, the company has made a significant impact on the world of play. Unfortunately, Hasbro is currently facing a financial crisis, with its stock price dropping from a high of $108 in 2019 to $51 (closing data on January 26th).
The company’s financial reports reveal that Hasbro has experienced four consecutive losing quarters as of the third quarter of 2023, with accumulated losses surpassing $500 million. The situation worsened in Q2 2023, when Hasbro reported a negative free cash flow. In response to these challenges, the company underwent substantial workforce reductions in 2022, totaling over 1,900 employees, or more than 20%.
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As a popular tabletop game in Europe and America, D&D is considered a top-tier IP, and Tencent, through its overseas business department IEG Global, is in negotiations to acquire adaptation rights for electronic games, including D&D.
According to IEG insiders, Tencent currently holds the game adaptation rights for numerous top-tier IPs. However, the licensing model typically involves high copyright fees, long-term revenue sharing, and restrictions from partners in terms of development and operation. Tencent Timi Studio’s mobile game adaptation of “NieR,” for instance, could not be launched, ultimately leading to the project’s cancellation.
If the acquisition is successful, Tencent will gain dominant control over the D&D IP, avoiding the aforementioned issues. The opportunity to acquire the D&D IP from Hasbro, driven by financial considerations, presents a rare chance for Tencent to secure a top-tier IP from overseas.
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