Hasbro’s Gaming Strategy Faces Setback Following $56 Million Loss

In recent years, Hasbro has been making some bold moves in the gaming world.

Back in 2022, the company announced the establishment of six new internal game studios. Atomic Arcade was set to develop a GI Joe game, while Skeleton Key hinted at a mysterious “spooky” project that remains under wraps. There was also an unnamed studio in Washington state, Archtype Entertainment, working on a new sci-fi RPG franchise called Exodus, and Tuque Games, now known as Invoke Studios, was developing a Dungeons & Dragons project that we now recognize as Warlock. And let’s not forget the team behind MTG Arena.

However, things didn’t go smoothly. In 2023, despite the massive success of its licensed titles like Baldur’s Gate 3 and Monopoly Go!, Hasbro made the tough decision to cancel five internal video game projects. Initially, there were just a few layoffs, but by the end of the year, many more followed. Senior vice president of digital strategy and licensing, Eugene Evans, noted that this kind of project cancellation isn’t out of the ordinary. “It became a narrative of, like, ‘Oh, they canceled a bunch of projects,’” he explained. “And it’s like, ‘Yeah, we do that all the time, like everybody else.’”

Fast forward to 2024, and Dan Ayoub, head of digital product development, reiterated the company’s commitment to building its internal studios. He revealed that Hasbro had invested over $1 billion in game development across just four studios: Invoke, Archtype, Skeleton Key, and Atomic Arcade.

“Video games are a crucial part of Hasbro’s strategy for the next century,” Ayoub stated in a 2024 interview. “We need to ensure that everything we release is top-notch, authentic, and something we can expand upon. Right now, we’re talking about a couple of studios and games, but our ambitions are much larger.”

In the months that followed, Hasbro consistently reinforced this strategy in various interviews. In 2025, during a panel at Brandweek, the company boldly announced plans to develop its own video games starting in 2026, a move that had already been hinted at in previous discussions. Just this past May, Ayoub shared an appealing vision: none of the six internal studios were working on games-as-a-service. Instead, they were concentrating on traditional PC and console games, while the broader company would continue collaborating with external partners for casual, mobile, and even VR games.

“We’ll be focusing on games primarily around D&D, Magic, Transformers, and possibly some new properties,” Ayoub explained. “Our emphasis will be on action-adventure and role-playing games for PC and console. Meanwhile, we’ll partner with top-tier developers for casual games, mobile games, and emerging platforms like VR. I believe we’re the leading digital games licenser globally by a significant margin. It’s a lucrative business that helps us reach a diverse gamer audience and funds our efforts to enhance our first-party capabilities.”

However, the strategy seems to have encountered another hurdle. Hasbro recently reported its second-quarter earnings, which included a $56 million impairment charge related to its revamped Digital Games portfolio for 2028 and beyond.

Impairment charges occur when a company writes off an asset that is now valued significantly lower than its previous worth. In this case, the charge was due to Hasbro canceling several games slated for release in 2028 and beyond, suggesting that the company’s investment in those games and studios is no longer as valuable as initially thought.

Which games were canceled? Hasbro hasn’t specified. However, we can make some educated guesses. Both Exodus and the upcoming D&D universe game Warlock were confirmed to still be in development and are planned for 2027. Skeleton Key appears to be actively hiring for an environment artist for its Montreal studio, indicating its project is likely safe. The company also mentioned a focus on development in “lower cost regions,” specifically calling out Montreal.

On the other hand, Atomic Arcade, the studio behind the GI Joe game, faced layoffs earlier this year. Hasbro stated that the Snake Eyes game is not canceled, but the team is currently evaluating its future. However, at least one employee claimed on social media that the studio was shutting down, and there have been no updates since.

Additionally, Hasbro ended its publishing agreement with Giant Skull for a D&D action-adventure game in May, less than a year after it was announced, which is likely one of the canceled projects.

The fate of the unnamed studio in Washington state remains unclear. It’s also possible that some canceled projects were licensed games with external partners, though that’s less certain based on the rest of the earnings call. Hasbro provided a statement clarifying their approach:

“We regularly assess our digital games portfolio to ensure we’re investing in titles and platforms with the clearest path to long-term success. As part of that ongoing evaluation, we’ve decided to discontinue select Digital Games projects, reflecting our refocused portfolio for 2028 and beyond.

“We remain highly confident in our digital games portfolio. Exodus and Warlock, both slated for 2027, meet our criteria for owned publishing: significant audience potential, strong genre fit, franchise potential, and meaningful opportunities beyond the initial game.”

While the impairment charges and canceled projects are concerning, they’re not entirely unexpected; many gaming companies are facing similar challenges. However, what stands out is a shift in Hasbro’s strategy, as indicated by various statements during the earnings call. Despite previous claims of a stronger focus on internally developed PC and console franchises, it now seems the company is pivoting back toward co-development and co-publishing, particularly with “lower-cost partners.” The emphasis appears to be shifting toward trading card games and RPGs tied to existing properties, with a goal of building trans-media franchises where possible. Hasbro is also scaling back its gaming investments after 2026.

“We are concentrating our digital investments on franchises, platforms, and partners where we see the clearest upside and where Hasbro has the strongest competitive advantage,” CEO Chris Cocks stated during the call.

The company plans to rely more on partner studios, with over 200 projects in various stages of development across mobile, casino gaming, console, and PC, including collaborations with several developers. Many of these partners focus on mobile games, while others specialize in gambling games.

Previously, Hasbro indicated that starting in 2027, it would aim for one to two significant game releases each year. While that remains true, Cocks noted that the composition, spending levels, and marketing strategies for these games will change. Hasbro will still pursue major titles, but “I think those won’t be every year,” he said. Instead, the focus will be on a mix of big games, “more service-oriented games, and potentially some smaller, more targeted content within games.”

Overall, it seems that Hasbro may be gradually stepping back from gaming. While it’s not abandoning its major projects, Exodus and Warlock, which have seen substantial investment and are nearing launch, the company’s first-party portfolio appears to be shifting away from a robust lineup of annual AAA titles. Instead, it looks like we’re returning to the partnership and licensing model that previously brought Hasbro success with titles like Monopoly Go! and Baldur’s Gate 3.

The internal changes that led to this significant shift in Hasbro’s perspective remain unclear, but it seems inevitable that the company would eventually align with the broader industry trend of reassessing spending on projects that may not yield substantial returns.