Hasbro will launch a new game subscription service this summer, becoming the first big toy maker to try a business model that has found success for other consumer products like razors, beauty products, and meal kits.
This summer, the toy maker behind Transformers and My Little Pony will launch the Hasbro Gaming Crate, which will ship three new curated games to subscribers. It will cost consumers $49.99 per crate for buying into two different categories: party or family themed. Crates will be shipped out four times a year.
"We've seen the subscription trend and how strong it has become outside of our industry and we thought 'Gamers are into their games and they want to try new games all the time,' said Jonathan Berkowitz, senior vice president of marketing for Hasbro Gaming, in an interview with Fortune. "It is a perfect marriage for the gaming category."
While Kiwi Crate and other startups have already launched subscription-based concepts for toys, Hasbro's (has) effort is the first for a large toy company. And Hasbro thinks the subscription service can tackle a big market, as there are 2.1 billion people globally that play games regularly.
Berkowitz explained that the party themed boxes will incorporate more "edgy" games that are ideal for adults, while the family crate is for all different ages and more inclusive. Hasbro built a new separate team within the broader Hasbro Gaming segment that will focus exclusively on the Hasbro Gaming Crate service. The idea is that all the games that will be shipped will be new—so consumers that order the crate won't be getting boxes of Candy Land and Jenga shipped to their homes.
The service is also a way for Hasbro to innovate at a faster pace than is typical for the industry. And if consumers really love one of the crate's offerings, the toy maker is open to considering broader distribution.
Hasbro's games business—a division that includes classics like Monopoly and newer games like Pie Face—has been a strong performer in recent years. Revenue for that category increased 9% to $1.39 billion in 2016, helping push the toy maker's overall haul above $5 billion for the first time in the company's 94-year history.
It wasn't always this smooth for Hasbro. When gaming first became popular on smartphones and tablets, Hasbro and other toy makers struggled to figure out how face-to-face gaming could compete. It added tablet functionality to popular traditional games like the board game Life—and those efforts failed to resonate with game-loving consumers.
"I came to Hasbro Gaming around the same time as the iPad craze and we had a little bit of a rocky road in 2010 and 2011," said Berkowitz. "It required us to dive deep into consumers insights and got us to uncover some of the reasons why people game and how to make gaming compelling."
One critical source of inspiration has been viral videos. Hasbro saw the web-driven buzz around the Pie Face game and bought the rights to manufacture and distribute the game after it became a viral hit. Other games that have been inspired by viral videos have included Egged On (based on a gag utilized by late-night host Jimmy Fallon), Flip Challenge (inspired by the bottle flipping trend on YouTube), and Speak Out (also inspired by viral web videos).
"Social gaming is exciting. It is fun to play and fun to watch," Berkowitz said. But he added that while Hasbro is finding inspiration online, it doesn't mean the company must add digital functionality to make their games a hit. In fact, the new social games feature no digital bells and whistles—they are more classic forms of play.
"People play face-to-face games to connect [with each other]," Berkowitz added. "If you focus on making a great game that connects people, you will win."