Two years after boasting about how hard it was going on videogames, Hasbro has recorded a “$56 million non-cash impairment” in its second-quarter financial report, arising from the cancellation of several games in development that were expected to release “in 2028 and beyond.”
First things first: As PC Gamer’s Joshua Wolens explained when Sony took a staggering $766 million impairment against Bungie, that $56 million figure isn’t a direct loss. Rather, it’s an unexpected decrease in value of an asset compared to its book value, separate from standard depreciation.
Just a few years ago, inspired by the massive success of Baldur’s Gate 3, Hasbro was going hard on videogames. In 2022 it had a half-dozen game studios working on different projects in its stable; two years later Dan Ayoub, head of digital product development at Hasbro-owned Wizards of the Coast, put a number on that effort, saying “we’ve got over $1 billion in games right now being developed,” and adding that “videogames are an integral part of Hasbro’s strategy going into the next 100 years.”
But it hasn’t gone especially smoothly since then. A big-budget GI Joe game announced in 2021 is in trouble, and the deal for a new D&D game from Stig Asmussen’s Giant Skull studio was cancelled earlier this year. Hanging over all of it is the ghost of Baldur’s Gate 3: Three years after the game’s 1.0 release, with tens of thousands of people still playing, Hasbro has yet to announce any kind of follow-up—a whiff that PC Gamer’s Harvey Randall says is emblematic of deeper-seated problems at the company.
Hasbro didn’t specify which game cancellations resulted in the $56 million impairment. Exodus, the Mass Effect-alike that until recently was headed up by BioWare veteran James Ohlen, is still ticking over, but the fate of that GI Joe game is less clear: Hasbro told Wccftech in February that it had not been cancelled, despite reports to the contrary, but the dev team was “taking time to evaluate the path forward for the game.”
Speaking in an investors call, Hasbro CEO Chris Cocks said only that “over the last several quarters, we have reviewed our portfolio and updated our plans for Hasbro’s digital future. That work included cancelling several games scheduled for release in 2028 and beyond and recording a $56M non-cash write down this quarter for related capitalized costs.”
Loosely echoing the new approach adopted by Xbox, which recently put thousands of people out of work and dumped four studios to shift focus to its biggest-name franchises, Cocks said Hasbro is “focusing our digital investment behind the franchises, platforms, and partners where we see the clearest upside and where Hasbro has the strongest right to win.” That strategy will be focused on trading card games and RPGs, where Hasbro already holds “strong proof points” in the form of Magic: The Gathering and Baldur’s Gate 3, which Cocks reminded everyone “is one of the biggest and most awarded role-playing games of the last decade.”
Cocks also said that 2026 should be the company’s “peak year for digital investment,” driven by Exodus and Warlock, and that it aims to reduce its “total digital spend” by at least 25% per year by 2028. This will be accomplished by moving development to lower-cost regions, and through the use of “more mature tools, teams, and production processes.” AI was not specifically mentioned, but Cocks has previously expressed real enthusiasm for generative AI, and the company recently caught heat for reportedly trying to get child actors from Peppa Pig to agree to have their voices used for AI development.
“So the digital strategy is straightforward,” Cocks said. “We are taking lower conviction projects out of the portfolio, reducing our annual spend base and concentrating investment behind the places where Hasbro has the best chance to build durable digital franchises: Magic, D&D, owned platforms, partner led economics and a concentrated number of high-conviction owned titles.”
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