On this episode of Industry Focus: Technology, Dylan Lewis is joined by Fool.com contributor Danny Vena to discuss Hasbro's (NASDAQ:HAS) call-out in Amazon.com's (NASDAQ:AMZN) holiday press release and what that could mean for the company's financial results.

A full transcript follows the video.

This video was recorded on Jan. 12, 2018.

Dylan Lewis: A company where maybe the impact is a little more questionable, Hasbro. This is one of the biggest companies in the toy and game space. We bring them up because the best-selling toy and game item in the United States per Amazon was the Nerf N-Strike Elite Strongarm blaster. This is a product, Danny, that I am extremely familiar with, because a lot of Fools wield this model around HQ. So, I'm used to being shot with this thing.

Danny Vena: I'm not surprised you would be a target.

Lewis: [laughs] You know, I don't appreciate that. But, no, it's true, it's very true. People seem to love this. It's a fairly simple little Nerf gun, it's not one of those humongous rifle guns. I think they're about $13 or something like that. You look at a company like Hasbro, and with this announcement, they're a company that's kind of in need of some good news.

Vena: Right. If you go back to the last quarter, the backdrop for all of the toy and game industry was the bankruptcy of Toys R Us and the amount of money like big players like Hasbro and Mattel had on the books with Toys R Us when they filed bankruptcy. There was some question whether or not these players would continue to supply Toys R Us with products going into the all-important holiday season. There were negotiations, they got those out of the way. But one of the things Hasbro management made a point to bring up was, there were other avenues where Hasbro sold toys. It was not limited to what was going to be sold at Toys R Us. This is just a good example of the other avenues that management was talking about. They sold a significant number of toys on Amazon, and one of their franchise products, the Nerf, was the biggest-selling toy on Amazon's website.

Lewis: To look at this on a quarter-to-quarter basis and understanding what this news item might mean for company sales, this is more important from a broad strategy perspective than a distribution perspective long-term, than it will be for maybe the immediate results for this business as we look to their next earnings call. You mentioned before, this is one of their franchise brands, and Nerf falls into that category with other lines like My Little Pony, Transformers, Monopoly. Overall, that segment makes up just under 50% of the company's top line. Nerf is a very strong performer in that segment. It's posted double-digit growth, which has outpaced the 7% growth for the segment. But, because there are so many other brands in that portfolio, it's not going to be big enough to dramatically move their overall business.

Vena: Again, this is one that's probably not going to move the needle. Better as an indicator to look at, Hasbro was not necessarily held hostage to the situation that was going on at Toys R Us, and certainly they're going to continue to grow whether or not they have the same type of growth that they would have seen if Toys R Us hadn't had those problems. We'll find that out when Hasbro releases their earnings. But in the meantime, it's just an indicator that toys were still being sold over the holidays.

Lewis: A shocker. If you're looking for a segment to watch with Hasbro, I would look at their Hasbro gaming segment. They're posting 20% year-over-year growth. It's on a much smaller base. I think they're around $280 million in revenue as of the most recent quarter. That's really not all that surprising. We look at what's going on in the entertainment, toy, game space for younger kids, and it's increasingly digital. It's starting to look more and more like video games, mobile apps, things like that. The company is getting there. But I think it's something that they need to make happen. It's nice to see that this has some traction for them, because it seems to me like the age window for those classic toys is shrinking and getting smaller and smaller. Kids want to be on iPads, kids want to be on consoles and phones.

Vena: There are a lot of industries that are being disrupted by the onset of mobile devices. I think for Hasbro, they're better positioned going forward than many of their industry competitors for several reasons. They do have some of the most well-known brands, and they're working on ways for kids to interact with those brands. They have digital games for kids to download onto their devices. They also have used a lot of these brands, like Transformers, in the movie business, just to keep them front of mind with the public. Maybe some of them have been not as successful as others. Transformers is obviously the big one, My Little Pony is another one, where the studio has put out stuff that has resonated with the fans. You had some others that were flops. But, Hasbro has an integrated strategy for international sales, omni-channel sales, keeping the products in front of the public's eyes with studio productions. I think they're less going to be a victim of disruption than some of the other players, but that's always something to keep in mind.

Lewis: Listeners, I hope no one lets Vince know that I stole a CG company for this last one that we're talking about here with Hasbro.

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