We may need you to click on a few ads over there on the right, because our rent here at Fool HQ just went up to $8.5 million. That's according to Monopoly City Streets -- a joint venture between Hasbro (NYSE:HAS) and Google (NASDAQ:GOOG) to create the largest online multiplayer version of the classic board game. The game is played out on a Google-supplied map of the real world.
This massively multiplayer Monopoly is the result of one of Hasbro's top strategies: expanding its strong brands beyond just toys and games to create an immersive consumer experience across all touch points. That strategy could make Hasbro an incredibly profitable company.
The Monopoly brand already extends beyond the classic board game, including slot machines and the popular McDonald's (NYSE:MCD) contest. Hasbro has even partnered with Universal Studios to make a feature film based on the board game, directed by Ridley Scott and slated for release in 2010. (We have our fingers crossed for Russell Crowe as Rich Uncle Pennybags.)
More than meets the eye
Will a Monopoly movie really reinvent the classic board game? It certainly worked for fellow Hasbro brand Transformers, a 25-year-old line of boys' toys that was revived into a blockbuster. This summer's critic-proof sequel, Transformers 2: Revenge of the Fallen, became one of the top 10 highest-domestic-grossing films of all time, raking in more than $400 million in the United States. And with more than $800 million in worldwide receipts, the film helped steadily raise Hasbro's stock to near its 52-week high.
While licensing brands such as Transformers represents only 3% of Hasbro's annual revenue, such efforts do help distinguish Hasbro from the leading toy manufacturer by sales, Mattel (NYSE:MAT), whose brands have not received the same exposure in Tinseltown. Big-screen fame fuels Hasbro's primary profit engine -- selling new toys and accessories related to the reimagined brand. The momentum also creates opportunities for Hasbro to further license the brand to apparel, publishing, foods, theme parks, and conventions. The exposure continues to build brand awareness, which drives more toys and more licensing, and the cycle continues until the world becomes immersed in robots in disguise.
Sound familiar? It's not unlike what Stock Advisor favorite Marvel Entertainment (NYSE:MVL) has done in boosting its superhero brands through blockbuster movies, and capitalizing on the success with extensive merchandising. Marvel is up 1,000% since the release of Spider-Man in May 2002. Of course, Marvel is now also directly funding the production of its movies, too.
Hasbro is just getting started
Hasbro's strategy of immersing the world in its core brands through entertainment licensing provides more than just financial gains; it may be the key to its expansion into new offerings.
Hasbro is accepting the harsh reality that children are moving away from traditional toys and games at a younger age. As a result, the traditional toy manufacturer must compete where its audience is, which today includes online and video gaming.
Hasbro has adjusted to the changing industry by building partnerships with Electronic Arts (NASDAQ:ERTS), Activision Blizzard (NASDAQ:ATVI), Glu Mobile, and Google. These digital companies can help strong properties like Transformers or Monopoly make the leap from plastic or cardboard to bits and bytes. If the market dictates that the future of Monopoly must be online, Hasbro will be ready. And isn't having the flexibility to find success -- wherever your audience may play next -- the big-business equivalent of passing GO and collecting $200?
