Although the announcement may seem minor, in combination with previous announcements, it illustrates how The Walt Disney Company (NYSE:DIS) can market the material to a wide range of age-groups.
Young Jedi knights
Addressing the children’s market, Club Penguin has received numerous rewards, which demonstrate its excellence in providing exceptional content to kids. Recently, The Walt Disney Company (NYSE:DIS) has utilized this channel to bring content from two other popular franchises – Marvel and Monsters Inc. Memberships are available in three levels: 1 month for $7.95, 3 months for $22.95, or 12 months for $59.95. And, of course, there’s a Club Penguin app.
Star Wars: Episode VII, the newest installment in the saga isn’t due out until 2015, but The Walt Disney Company (NYSE:DIS) is certainly hooking kids early with enthusiasm for the franchise – kids, who have never even seen a Star Wars film in a theater, born after the latest film installment in 2005.
Club Penguin is part of The Walt Disney Company (NYSE:DIS)’s Interactive segment, of which revenues for the quarter ended in March improved 8% to $194 million over the same quarter for 2012. And although segment operating income was still a loss at $54 million, it was an improvement of $16 million from the same quarter for 2012.
Things have come a long way from when I was collecting the Kenner action figures of Luke Skywalker back in the 80’s. Or, maybe not so much. Hasbro, Inc. (NASDAQ:HAS) acquired Kenner back in 1991. It holds the licensing for the Star Wars franchise through 2020 and will surely profit handsomely from the 2015 film and future releases, for it already has a considerable number of products on the market – ranging from toys to Angry Birds Star Wars.
It is difficult to predicate an entire thesis for purchasing Hasbro simply on the success of future Star Wars films; however, in the earnings call for the first quarter of 2013, management noted, “Star Wars remains a very significant and important priority within our portfolio, and we look forward to the future with this great brand franchise.”
Additionally, Hasbro, Inc. (NASDAQ:HAS) has been performing well recently without the benefit of any recent Star Wars film release. Net revenues increased 2% in the first quarter compared to the same period in 2012. Operating profit increased 47% to $39.6 million, and net earnings increased 30% to $6.6. million.
Hasbro, Inc. (NASDAQ:HAS) is expected to release its second quarter earnings on July 22. A miss in analysts’ expectations might result in a dip in share price and a opportunity to buy in.
For those more experienced with the lightsaber
For the more mature crowd, excitement has been building since June, when Electronic Arts Inc. (NASDAQ:EA) announced a new installment in the Star Wars: Battlefront series. This is the newest title, which follows the May announcement that EA had signed a multi-year exclusive licensing agreement with The Walt Disney Company (NYSE:DIS). According to Frank Gibeau, Electronic Arts Inc. (NASDAQ:EA) Labels president,
Every developer dreams of creating games for the Star Wars universe. Three of our top studios will fulfill that dream, crafting epic adventures for Star Wars fans. DICE and Visceral will produce new games, joining the BioWare team which continues to develop for the Star Wars franchise. The new experiences we create may borrow from films, but the games will be entirely original with all new stories and gameplay.
Electronic Arts Inc. (NASDAQ:EA) has been moving in the right direction as of late with shares currently trading around $24, which is an improvement of about 108% over the $11 lows it was trading at last July – a low that hadn’t been seen since 1999.
The video game sector is a powerful one because it affords older fans the opportunity to experience the Star Wars universe in a more mature way. In all likelihood, the new films will be in the same vain as the Marvel superhero movies – not as dark and brooding as, say, Christopher Nolan’s interpretation of Batman.
But video games can fill that niche. For example, gamers were extremely excited for the future release of Star Wars: 1313 – a more sophisticated game, set in a seedy underworld, which some had described as a film noir of sorts for video games. Disney halted development of the game, leaving fans extremely disappointed.
A Foolish conclusion
Star Wars will undoubtedly prove to be a powerful brand for The Walt Disney Company (NYSE:DIS). Jay Rasulo, Senior Executive Vice President and Chief Financial Officer, has recently said that after the 2015 release of Episode VII, Disney will be “coming out with a film every year that will be wrapped up in the Star Wars mythology.”
EA and Hasbro also stand to benefit as this iconic franchise is reinvigorated over the next few years.
The article How Fans of All Ages Will Fit into Disney’s Farthest Galaxy originally appeared on Fool.com and is written by Scott Levine.
Scott Levine owns shares of Walt Disney (NYSE:DIS). The Motley Fool recommends Hasbro and Walt Disney. The Motley Fool owns shares of Hasbro and Walt Disney. Scott is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
