Spin Master Corp T.TOY

Alternate Symbol(s): SNMSF

Consumer Cyclical Leisure

Spin Master Corp., a children’s entertainment company, engages in the creation, design, manufacture, licensing, and marketing of various toys, entertainment products, and digital games in North America, Europe, and internationally. The company’s Toys segment’s product categories include activities, games and puzzles, and plush; wheels and action; outdoor; and preschool, dolls, and interactive products. Its Entertainment segment engages in the creation and production of multi-platform content, stories, and characters in original shows, short-form series, and films. The company’s Digital Games segment is involved in the development of digital games distributed via third-party platform providers. Spin Master Corp. was founded in 1994 and is headquartered in Toronto, Canada.

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Spin Master Corp

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Post by retiredcfon Jul 21, 2022 8:38am

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Post# 34839796

RBC

July 20, 2022

Spin Master Corp.
Announces Global Master Toy Licensing Agreement with Sony Interactive Entertainment

TSX: TOY | CAD 45.37 | Outperform | Price Target CAD 65.00

Sentiment: Positive

Event: Spin Master announced today that it has entered into a global licensing agreement with Sony Interactive Entertainment ("SIE"). Spin Master will be the global master toy licensee for SIE's PlayStation brand and SIE-owned PlayStation titles (including but not limited to God of War, Horizon Zero Dawn, The Last of Us, and UNCHARTED) and will develop products in the action figure, collectible, playset, plush, roleplay, vehicles, RC, and games & puzzles categories. SpinMaster's PlayStation toy line is expected to launch in Spring 2024.

Our view: We view this news favorably for Spin Master. Today's announcement comes amidst new content releases based on successful PlayStation titles (e.g., the February 2022 Uncharted film, which grossed $400MM+ worldwide despite lingering pandemic restrictions in many markets limiting theater attendance) as well as new content in the pipeline (e.g., the upcoming HBO series based on The Last of Us). We note that the agreement spans a range of content from the game libraries of the PlayStation 3, 4, and 5, with the PlayStation 5 having recently eclipsed 20MM unit sales worldwide and becoming Sony's fastest selling console in its history (for context, PlayStation 3 sales surpassed the 20MM unit sales mark 26 months post-launch, while PlayStation 5 sales reached this level in ~18 months).

Parallel to the successful DC Comics license: Recall that in 2018, Spin Master announced it had secured the toy license for Warner Bros.' DC Comics IP across a number of categories, and in February 2022 the company renewed this license through 2026. Following the successful March 2022 launch of the latest Batman film (which grossed $770MM+ worldwide, making it the 4th highest grossing film of 2022 YTD), Spin Master indicated at Q1 2022 earnings (see our note here) that Batman was now the #5 Spin Master brand in terms of POS. In our view, given that there is significant consumer interest in Sony gaming content (as indicated by the rapid pace of PlayStation 5 sales and the extremely positive consumer reactions to recent Sony releases, such as The Last of Us 2 and the Windows launch of God of War), we view this as a notable win for Spin Master.