Mattel Partners with NetEase to Increase Its Impact on the World of Digital Gaming
Mattel Inc., an American toy company, has partnered with NetEase, China’s second-largest videogame company, to increase its success in the mobile game market.
The two corporations created a digital studio together titled Mattel163, which was named in reference to NetEase’s original URL, 613.com.
The joint venture will focus on adapting Mattel’s existing toy products into mobile games. A version of Uno for Facebook Messenger was launched on January 30, and an app of the game will soon be available for download on iOS and Android systems. The studio is also looking to create mobile games out of Mattel’s Barbie, Hot Wheels, Fisher-Price, and Thomas & Friends properties.
The partnership seems promising for Mattel, given that NetEase released a game called Onmyoji in 2016 which has been downloaded 200 million times. Its online game division alone has had sales of $5.5 billion over the past year, while Mattel’s total revenue was $5.1 billion. Mattel’s Chief Executive Officer Margo Georgiadis has hopes that just one well-developed game could bring in a revenue of $50 million a year.
Previously, Mattel created Mattel Creations, a unit that would handle movies, television, and digital content: however, the departures of Chief Content Officer Catherine Balsam-Shwaber in November, and executive Cheryl Gresham this month, have caused some setbacks. This has contrasted with the success of Mattel’s rival, Hasbro, which took the Transformers and My Little Pony brands and saved them from failure using movies and television shows.
Mattel’s sales have been declining for four years, and the toy company must show it can snatch its young audience back, away from the clutches of Netflix, Youtube, and social media. Mattel is also in need of a digital outlet because brick and mortar toy stores are becoming harder to find. Even Toys “R” Us, the world’s largest toy chain, has declared bankruptcy and is closing stores.
In the first nine months of 2017, all of Mattel’s major brands saw a decline in gross sales. The Fisher-Price brands saw a gross revenue decline of 11 percent, as compared to the same time period in the previous year, and construction and arts & crafts brands saw a thirty percent gross revenue decline over the same nine months, also compared to the same span of time in the previous year.