Jan 22 2008
They Just Don’t Get It
Scrabulous is an online version clear rip-off of Scrabble, the board game jointly owned by Hasbro and Mattel. It’s only available at Facebook.com and is built on the Facebook application framework.
Unsurprisingly, Hasbro and Mattel aren’t pleased and are trying to shut down the application. As TechCrunch reports today, Scrabulous must either shut down tonight or sell itself to Hasbro at a price that is sure to reflect the mood in the negotiation room (with Hasbro firmly pressing a gun against Scrabulous’ head).
This is probably the worst move Hasbro could make to protect its copyright and to serve its customers. The success of this game on Facebook isn’t due to the game of Scrabble, but due to the designers who built the application and made it popular.
Forgetting the fact that Scrabulous’ popularity will help retail sales of the boxed version of the game Scrabble, Hasbro is missing an even bigger opportunity: working with the creators to bring more Hasbro and gaming magic to Facebook.
They are missing out on a few sales now, and loads of sales in a few years.
Young consumers — who happen to use Facebook in large numbers — will be in the position to buy the kind of consumer products that Hasbro happens to sell in a short amount of time. What a better opportunity does Hasbro have to get them hooked on a game they will later bring to the family room when these young users grow up and marry and have little babies (as most young people tend to do, in droves).
So what is the right move?
Hasbro has huge leverage against the creators of Scrabulous in the form of threatened litigation. If they use this leverage to steal Scrabulous from the developers, they aren’t really going to want to work for Hasbro and create other great online games.
Scrabble isn’t a valuable asset to Hasbro- people like the guy who created Scrabble are. Lawsuit filed, lawsuit won, talent lost.
Instead, Hasbro ought to use their leverage to “invest” a 50% stake, let them keep Scrabulous online, and start work on bring other new exciting Hasbro initiatives to the Facebook world (with the help of the Hasbro marketing machine).
This is the only option Hasbro can commit to if they truly wish to increase shareholder value (as all publicly traded companies are obligated to do).
Unsurprisingly, when revolutions happen entrenched organizations just don’t get it.