Hasbro Finally Drops Scrabulous Suit

from the how'd-that-work-out? dept

It's difficult to see how Hasbro could have handled the Scrabulous situation any worse. Scrabulous, of course, was a Scrabble-like game made for Facebook, which quickly became one of the most popular apps on that social networking site. Hasbro, which owns the rights to Scrabble in the US, didn't have its own version, and rather than recognize an opportunity, it chose to shoot itself in the foot, suing the brothers who created it. The Scrabulous guys eventually came back with a slightly modified game, which became quite popular as well, while many angry Facebook fans organized boycotts of Hasbro products. Prior to that, of course, the attention brought about by Scrabulous had resulted in a renaissance for the game, leading many people to go out and buy physical Scrabble sets. Yes, Hasbro took a situation that was driving more sales of the board game, and turned it into one where thousands of people were boycotting its products.

Either way, it appears that Hasbro has now dropped the lawsuit over Scrabulous, saying that the changes made to the game makes the lawsuit no longer necessary. Still, it seems like Hasbro played this game backwards. Back when Scrabulous was popular, almost everyone I knew on Facebook had a few games going -- but since Hasbro got involved, it seems people have moved on. So, even if Hasbro "won" the legal victory, they pretty much killed their real opportunity to capitalize on renewed interest in the board game. The company says that the new versions put together by the Agarwalla brothers "provides people in the U.S. and Canada with a choice of different games." Sure, it does, but wouldn't Hasbro have been better off by capitalizing on the fact that all of their interests were aligned initially -- rather than competing -- and Scrabulous was driving more sales?


Reader Comments (rss)

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  1.  
    identicon
    Fsm, Dec 15th, 2008 @ 1:15pm

    Typo

    It's difficult to see how Habro

     

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  2.  
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    Anonymous Coward, Dec 15th, 2008 @ 1:18pm

    Short Term Planning

    This is why the American economy is tanking. NO ONE was really playing for long term investments. Everyone wanted to get rich quick, get the rewards right away and do the work later.

    We're seeing how well that works out every where, and I'm not just talking about the recession. This article is another finger pointing at people's lazyness and lack of responsibility.

     

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  3.  
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    Anonymous Coward, Dec 15th, 2008 @ 1:38pm

    What we have here is a failure to communicate.

    The issue is not that Habro would make more money but power; that is not relevant but that the executive of Habro were being slighted. Who cares about mere money when there are more important things involved such as perception of power.

     

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  4.  
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    Just Me, Dec 15th, 2008 @ 1:42pm

    An old addage

    You had better be careful what you wish for... sometimes you get it! Hasbro wanted the attention this game garnered; they got attention for sure here....

     

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  5.  
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    LostSailor, Dec 15th, 2008 @ 1:52pm

    And the Evidence Is...

    Prior to that, of course, the attention brought about by Scrabulous had resulted in a renaissance for the game, leading many people to go out and buy physical Scrabble sets. Yes, Hasbro took a situation that was driving more sales of the board game, and turned it into one where thousands of people were boycotting its products.

    Mike, can you point to any actual evidence that Hasbro "shot itself in the foot"? As a counter anecdote, most people I know are using the Facebook Scrabble. Do you even have evidence that Scrabulous drove sales of the physical board game?

    Remember...the plural of anecdote is not data.

     

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  6.  
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    trollificus, Dec 15th, 2008 @ 1:56pm

    Yeah, a lot of better approaches...

    ...than the first one suggested by your legal department. One wonders if the decision to "Vigorously protect our blahdeblah..." was even vetted by anyone in upper management. (either way, f 'em)

    If their hope was to eke out another decade's profit from the physical game box, why not, say...buy out the brothers for more than they ever expected to make from "their" version, rebrand it as "Scrabble", redo graphics and oila! Someone's developed your web version for you and you've got instant advertising.

    But nooooooooo.....

     

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  7.  
    icon
    Mike (profile), Dec 15th, 2008 @ 2:27pm

    Re: Typo

    Oops. Fixed. Thanks.

     

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  8.  
    identicon
    Doc Rings, Dec 15th, 2008 @ 4:19pm

    Yup... you are so right on.

    My wife loved that app, and now that it was pulled, she now plays Pathwords, and other Facebook games like that with her friends.

    We had even thought of getting a real Scabble board to have when friends come over to the house... but NO WAY, NADA, not now. There is no way we'll reward Hasbro for the despicable and selfish way they handled this.

    These old companies need to get with the game (pun intended), and start afresh with "Capitalism 2.0"... do WHATEVER it takes to sell more product, push units out the door and increase the profits. If that means swallowing your pride and recognize innovation somewhere else (Scrabulous), and partnering with that entity, so be it.

    We've lost that "let's have fun with business" model, instead acting with paranoia and suspicion, fostered by too many lawyers and not enough enthusiasm for innovation.

    Hasbro, you're going to have to work even HARDER for our business, and I doubt if your corporate lawyers HAVE A CLUE how to help you now!

    Doc

     

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  9.  
    identicon
    Jon, Dec 15th, 2008 @ 5:26pm

    reserving judgement

    Mike, do you know what efforts Hasbro made to buy Scrabulous or at least partner with them before they decided to sue? I've read a number of articles on this and every one of them casts Hasbro in a negative light, yet not one of them went into any explanation of the efforts Hasbro made before suing the brothers. What if Hasbro made an effort to buy the app, but the brothers wanted an outrageous sum of money? Just curious.

     

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  10.  
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    Mojo, Dec 15th, 2008 @ 5:52pm

    I would also like to see a link to any story or data that supports the claim real-world Scrabble sales went up.

    Yes, it's a nice idea, but where is the proof?

     

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  11.  
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    cram, Dec 15th, 2008 @ 8:40pm

    Proof? You want proof?

    Hi LostSailor

    Looking at Hasbro earnings figures (http://finance.google.com/finance?client=ob&q=NYSE:HAS), we see that 2007 revenues rose 22% while net income or actual profit rose 45%, compared with 2006 (remember 2007 was when the popularity of Scrabulous was at its peak and supposedly led to a rise in the sales of Scrabble sets).

    But looking at http://tinyurl.com/5bk42l, we see a rise in income being attributed to a deal with Marvel.

    In a press release at the beginning of 2008, Hasbro said the rise in its fourth-quarter 2007 profit was driven by core brands like Transformers, Littlest Pet Shop and Star Wars.

    It also said North American profit fell 22% to $101 million, while revenue grew 7.6% and international earnings jumped 40%.

    And in July, it posted higher-than-expected second quarter profit, attributing the rise to increase in the sales of toys tied to movies like the latest "Indiana Jones" film.

    See http://tinyurl.com/5a3wwd for 2008 earnings (3Q earnings down; because of the negative publicity? I don't think so).

    Perhaps Mike knows something we, or Hasbro, don't.

    Maybe people were just playing Scrabulous for free and not rushing out to buy Scrabble sets.

     

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  12.  
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    PaulT (profile), Dec 16th, 2008 @ 12:48am

    Re: And the Evidence Is...

    A lot of the hard data seems to be hidden behind paywalls and subscriptions to market research reports. However, mainstream, reputable media outlets are reporting that recent sales of Scrabble are their strongest for around 2 decades: http://www.telegraph.co.uk/news/uknews/3473468/Scrabble-regains-number-one-slot-as-brain-games-craze -takes-hold.html

    Now, this is possibly just correlation, but what else could have caused a surge in the game's popularity? It's difficult to imagine such a mainstream surge in sales without any media attention being at least partially responsible, and what else Scrabble-related has been in the media recently apart from Scrabulous?

    It's possible that the DS-led "brain games craze" mentioned in the article is partially responsible but what else directly related to Scrabble has there been?

     

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  13.  
    identicon
    cram, Dec 16th, 2008 @ 2:24am

    Hi PaulT

    Sorry, I didn't realize these links were hidden. :-( Rest assured the data are what I said they are.

    The link you provided refers to the UK market, and is typical lazy financial journalism. It actually raises more questions. How big is the UK market? Did it grow this year? What was Scrabble's position in the games market the past 15 years? How was its growth over the years - steady, flat? Did its competitors record growth or fall this year? Without answers to these, its pointless to say "Yay! Scrabble No. 1 this year!"

    More importantly, Hasbro actually reported a fall in US consumption and a rise in international sales. But that was on the whole; I couldn't locate data specifically relating to Scrabble. In fact nowhere was Scrabble mentioned, except in passing.

    Have there been any reports on Scrabble sales rising markedly in the US? What percentage of Scrabulous players or Scrabble set buyers are American? Does Scrabble even account for a significant chunk of Hasbro's sales? Only Hasbro can answer!

    I think we need data on that before claiming Scrabble shot itself in the foot or that there has been a renaissance in the sales of Scrabble sets.

     

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  14.  
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    Twinrova, Dec 16th, 2008 @ 4:11am

    Hasbro is dead to me.

    I gave up on Hasbro YEARS ago once they turned the Transformers into plastic pieces of shit, which they wasted no time overcharging for.

    It doesn't shock me to see this is how Hasbro now runs its business. They could care less about consumers, but simply sit back and suck in the revenues generated by the release of Transformers.

     

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  15.  
    icon
    PaulT (profile), Dec 16th, 2008 @ 6:19am

    Re:

    Well, first of all I'd have to ask why the US specifically needs to be addressed. Scrabulous was an app available to anyone regardless of nationality. If Scrabulous really were damaging to Hasbro's US sales of Scrabble, they would have been equally damaging to Mattel's in the UK - yet, the game is apparently enjoying a surge of popularity. there's no causal evidence as yet, but I don't remember anything else in the media that would explain this surge.

    I agree that simply saying "Scrabble is #1" is a little pointless without an overview of the market. However, the sales certainly don't seem to have gone down. I think that the main point Mike was making - that Scrabulous doesn't seem to have lost any sales for Hasbro, the lawsuit appears to have been a waste of time and that the company could have been better off working with rather than competing directly with them - may still stand. Yes, some actual figures would be nice, the linked article was just the first mainstream article I came across.

    Comparing company-wide sales stats as per your previous post is also a little ingenuous. Transformers, Star Wars toys and the like are going to be bigger volume sellers than board games to begin with, so the company profits as a whole may not be affected in a huge way by Scrabble sales (unless a lot of the Hasbro boycotters are actually doing that).

     

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  16.  
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    Eponymous Coward, Dec 16th, 2008 @ 8:25am

    Re: Wow

    ...I'm sorry, but this post reaks of hypocrisy and sloppy reporting.

    If Hasbro or any other content company had made the similar assertions linking the popularity of Scrabulous with lost sales and failed to provide any evidence to back up the claim, Techdirt, Ars, Slashdot and others would've promptly torn them apart (for that matter, I'm pretty certain that any evidence brought forward would also be torn apart). However, I note that the same standards don't seem to apply when asserting that online activity leads to increased sales (lostsailor and cram, good on you for noting the lack of evidence here).

    Moreover, before lambasting Hasbro on its handling of the Scrabulous situation, you should know that in Aug 2007, before Scrabulous became a facebook app, Hasbro entered into an exclusive licensing arrangement with Electronic Arts for the latter to develop and publish digital versions of its board games for mobile and Internet platforms (eg. ZDNet, "Hasbro, Electronic Arts reach digital-games pact" http://news.zdnet.com/2100-9595_22-159096.html). This arrangement would've severly limited what Hasbro could do regarding Scrabulous, as any attempt to capitalize on the unauthorized version of a Hasbro game would probably have been a breach of the arrangement and invited a suit from EA. Of course, had you bothered to do a little research before opining, you may have realized this...

     

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  17.  
    identicon
    cram, Dec 16th, 2008 @ 8:37pm

    Hi Paul

    "Well, first of all I'd have to ask why the US specifically needs to be addressed."

    Because the US is probably Hasbro's largest market. And since Mike keeps claiming sales of Scrabble sets have risen, I'd like to know by how much it did in the US.

    "If Scrabulous really were damaging to Hasbro's US sales of Scrabble, they would have been equally damaging to Mattel's in the UK - yet, the game is apparently enjoying a surge of popularity."

    But Mike's claiming quite the opposite - that Scrabulous actually helped Hasbro's US sales, when the company itself has said nothing to that effect. And in the UK, sales have supposedly grown 30% - we don't know what the growth rate was last year.

    "There's no causal evidence as yet, but I don't remember anything else in the media that would explain this surge."

    There's no evidence of a surge in the sales of Scrabble sets, at least in the US. Of course, there's no denying the fact that there has been a surge in the game's popularity online, thanks certainly to Scrabulous.

    "I think that the main point Mike was making - that Scrabulous doesn't seem to have lost any sales for Hasbro..."

    No, Mike's main point was the popularity of Scrabulous actually led to an increase in the sales of sets, for which there is no data - especially from Hasbro, who are in the best position to inform.

    "...the lawsuit appears to have been a waste of time and that the company could have been better off working with rather than competing directly with them - may still stand."

    That's debatable. The company may have wanted to send out a message to the market that it would deal firmly with any infringement of its copyright.

    "Yes, some actual figures would be nice, the linked article was just the first mainstream article I came across."

    Actual figures? Yeah, I'd like to see more of that on this blog.

    "Comparing company-wide sales stats as per your previous post is also a little ingenuous. Transformers, Star Wars toys and the like are going to be bigger volume sellers than board games to begin with, so the company profits as a whole may not be affected in a huge way by Scrabble sales (unless a lot of the Hasbro boycotters are actually doing that)."

    The point of debate here is Scrabble having "shot itself in the foot," suppposedly squandering away enormous interest generated by an online knockoff, which reportedly led to a significant rise in the sales of physical sets.

    If Hasbro itself doesn't regard Scrabble as a major revenue earner and if the sales of sets haven't actually risen significantly, then Mike's points ring hollow. But thanks to the digital mobocracy, a lot of bad publicity has been generated for Hasbro, something all copyright owning companies have to watch out for.

     

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