Catan threatens Hasbro cash cow?

Well, that seems to be the opinion of this industry analyst at TD Monthly, anyway:

http://www.toydirectory.com/monthly/article.asp?id=3680

Hasbro has reigned as the absolute market leader of the board game category for many years. Last year, the company sold $815 million in the United States. This is the equivalent of about $1,220 million at retail, or a market share of 53 percent. Games and puzzles are also Hasbro’s largest product category, accounting for nearly one-third of its sales last year. While Hasbro does not break out gross profit by category, I understand that games and puzzles represent about 40 percent of Hasbro’s gross profitability. Its single largest board game brand, Monopoly, has sold, over its lifetime, about 300 million pieces and moves about 3 million units every year in the United States alone. This fat tidbit has long attracted the attention of competitors, but none has succeeded in capturing it. However, it looks as if things are about to change.

The writer then summarizes some action in the category, namely Mattel and Blokus, Lego and some unspecified games and Mayfair with Settlers of Catan.

He also claims Hasbro's game business was down.

Hasbro’s board game business declined last year despite strong demand for the category. I predict this will happen again in 2009 and 2010.

Turns out that's not entirely accurate. According to Hasbro's Q4 transcript: Board games were up 2% while the total games and puzzle category was flat compared to a year ago.

So apparently puzzles were down, not games. A significant point, I think.

Frankly, I don't buy it. Hasbro has such a dominant share of the board game world that it's going to take a lot more than a couple of hot games to change that. Blokus and Settlers of Catan have been out for a while already, and I see little evidence they're about to displace Monopoly.

Indeed, his very premise may be mistaken. He seems to assume that it's a zero-sum situation and that any growth in board game sales by other manufacturers will necessarily come at Hasbro's expense. On the other hand, it may be that renewed interest in the category will boost sales for all concerned. More games may mean more game players which may lead to even more game sales. Games are not necessarily competing against other games for sales but are competing against other forms of entertainment.