Where have all the board game lovers gone?

Hasbro's (NYSE: HAS) results this morning weren't very inspiring. Quarterly revenue fell a sharper-than-expected 7%, to $1.28 billion, and just a quarter of the dip can be explained away by foreign currency fluctuations. Earnings fell by an even steeper 15%, to $140 million, but aggressive share buybacks helped keep net income of $0.99 a share above Wall Street's target of $0.95 a share.

The country's second-largest toymaker has made no bones about the challenges of 2010. It warned investors about the tough comparison it would be facing against a robust 2009 that featured its Transformers and G.I. Joe franchises blown up on the silver screen that summer. In that sense, the 7% decline in its toy categories for boys through all of 2010 is understandable. If you saw last night's Super Bowl you probably caught the ad for Transformers: Dark of the Moon. The flick's coming out this summer, and it's likely to boost action figure sales in the latter half of this year.

However, the more problematic part of Hasbro's report came from a 22% slide in its games and puzzles category during the holiday quarter. This was Hasbro's largest category during last year's fourth quarter, so it's not something that investors can dismiss.

CEO Brian Goldner points out "softness in U.S. consumer demand for games late in the year," but wasn't this a stellar holiday quarter for most retailers? Where are the folks passing the "Go" square on Monopoly for their $200? Where are the fans of "Magic: The Gathering"?

Rival Mattel (NYSE: MAT) posted a 12% spike in its games and puzzles category during the holiday quarter, but I don't see Hasbro's miss as merely a company-specific shortfall.

What were the hot toys this year? A lot of the winners fell outside of the realm of traditional playthings.

Now, you may think that none of this has anything to do with Hasbro. A hot introduction from Mattel or even LeapFrog (NYSE: LF) would seem to be like a more logical threat to Hasbro. Unfortunately, that's not the case at all. Hasbro's preschool division is actually holding up pretty decently. It's Hasbro's appeal with older gamers and adult board game enthusiasts that's waning, and this is where the tech toys are daggers.

The worst thing for Hasbro is that Kinect, uDraw, and iPad purchases aren't one-off buys. Owners will continue to justify their initial investments by buying games for their Kinect and uDraw accessories. Apple's App Store is loaded with free and premium diversions to download.

There's always been the fear that traditional playthings may be replaced by more interactive engagements. What if the end of the retro charm is now? Hasbro has been able to deliver 10 consecutive years of earnings growth on a per-share basis. Analysts see no problem with Hasbro stretching that streak to 11 this year.

I'm not so sure. Keep in mind that pre-tax profit actually fell in 2010. Hasbro was bailed out by a sharp drop in corporate taxes and its share buybacks. If gamers don't return to Hasbro's conventional playthings, I think 2011 will pose a bigger challenge than Wall Street is targeting. If so, it's a game that shareholders will regret losing.

Should Hasbro go private, as was rumored last year? Share your thoughts in the comment box below.

Microsoft is a Motley Fool Inside Value recommendation. Apple and Hasbro are Motley Fool Stock Advisor picks. Hasbro is a Motley Fool Income Investor choice. The Fool has written puts on Apple. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz owned way too many Hasbro toys growing up. He does not own shares in any of the stocks in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.