American toy company Hasbro is seeking to sell its well-known IP "Dungeons & Dragons" (hereinafter referred to as "DND"), and Tencent is one of the potential buyers. Negotiations are still in the early stages and the two parties have not yet agreed on the details of the transaction.


According to people familiar with the matter, the financial crisis Hasbro is facing is the main reason why it is considering selling DND, and Larian Studios invested by Tencent is the intermediary for this transaction. "Baldur's Gate 3" developed by Larian Studio won the 2023 TGA Game of the Year Award and is considered one of the most successful DND adaptation games. Therefore, the studio is regarded by Hasbro as one of the potential target buyers. However, due to insufficient funds, Larian finally introduced the deal to shareholder Tencent.

Hasbro was founded in 1923 and has a history of 100 years. In 1935, the company gradually became a world-class toy company with its Monopoly series of games, with well-known IPs such as Transformers, Dungeons and Dragons, Monopoly, and My Little Pony. But now, this century-old company is facing a huge crisis caused by losses, and its stock price has fallen from a high of $108 in 2019 to $51 (closing data on January 26).

According to the financial report, as of the third quarter of 2023, Hasbro has suffered losses for four consecutive quarters due to the drag on its main business of toy sales. The cumulative loss from Q4 of 2022 to Q3 of 2023 exceeded US$500 million. In Q2 of 2023, it even experienced negative free cash flow. According to Forbes, in response to the crisis, the company significantly laid off employees last year, laying off more than 1,900 employees, accounting for more than 20%.

Although the company is in a loss-making situation overall, the DND-related IP it holds are high-quality assets, and it has achieved considerable success in video game adaptations. "Baldur's Gate 3" launched by Larian Studio last year achieved both fame and fortune. Not only did it win six TGA awards, including Game of the Year, it also surpassed "Hogwarts Legacy", a game adapted from the Harry Potter IP, with revenue of US$657 million on a commercial level, becoming the most profitable buyout game on the PC last year.

The success of "Baldur's Gate 3" is also reflected in Hasbro's financial data. The financial report shows that in the third quarter of 2023, between "Baldur's Gate 3" and another Monopoly IP game "MonopolyGo! Driven by ", Hasbro's electronic games and licensing-related businesses bucked the trend and achieved a year-on-year growth of 40%, reaching US$423 million.

In addition to video games, DND is also one of the most popular tabletop games in Europe and the United States. It has appeared many times in American TV series such as "The Big Bang Theory" and "Stranger Things". It has formed a huge fan base around the related culture and can be regarded as a top-notch IP.

A person from Tencent's IEG (interactive entertainment business group) told Snow Leopard Finance that Tencent's IEG Global department, which is responsible for overseas business, will conduct negotiations with the intention of acquiring a series of rights including DND's video game adaptation rights.

According to the above-mentioned IEG source, Tencent currently holds the game adaptation rights of many top IPs. However, because the licensing model is mostly not a one-time buyout, Tencent not only has to bear high copyright fees and long-term revenue sharing, but is also often constrained by partners in R&D and operations. The "NieR" IP mobile game previously developed by Tencent Tianmei J2 Studio failed to be launched until the project was cancelled.

If this acquisition is successful, it will enable Tencent to gain dominance over the Dungeons & Dragons IP, which will largely avoid the above problems.

An expert who has been engaged in overseas mergers and acquisitions for many years told Snow Leopard Finance that companies in Europe and the United States attach great importance to the value of IP, and there are not many opportunities for domestic companies to acquire top overseas IP. This time Hasbro is considering selling the Dungeons & Dragons IP due to financial problems, which is a rare opportunity for Tencent.