Toymaker teams up with game giant NetEase to upgrade business

Mattel Inc, one of the world's largest toymakers, has announced a partnership with Chinese game developer NetEase Inc to establish a new publishing and development venture, as the traditional toy brand seeks its transformation in the booming mobile gaming industry.

The joint venture, Mattel163, will create digital experiences and develop intellectual property products based on Mattel's well-known toy brands for children, including Barbie, Thomas & Friends and Hot Wheels. Both sides in the new venture will hold half of the stake.

The move is part of Mattel's efforts to revive its sluggish business, as demand for traditional toys has declined in the face of the soaring popularity of video games and social media, as well as competition from smaller toy factories. Mattel's major brands all reportedly saw drops in gross sales year-on-year in the third quarter of last year.

"Mobile gaming is growing at a phenomenal pace and it is estimated it will generate nearly $58 billion in global revenue by 2018," said Sid Mathur, Mattel's executive vice-president and chief strategy and development officer.

"By combining NetEase's leadership in game development and publishing with Mattel's expansive portfolio of global consumer brands, Mattel163 is poised to build captivating and creative mobile experiences," he added.

Benjamin Ha, corporate vice-president at NetEase, said, "Mattel has been defining the future of learning and play for generations, and we are honored to be partners in creating a new world-class publishing and development studio in gaming and education."

Just a week ago, NetEase teamed up with Mattel to launch the classic card game Uno on Facebook Messenger, which has already attracted over 3 million players overseas.

Based in Guangzhou, capital of Guangdong province, NetEase is recognized as one of the world's leading mobile game developers, and has developed many of the world's most popular mobile gaming franchises, including Fantasy Westward Journey and Onmyoji. With a global market capitalization of more than $40 billion, NetEase is ranked among the world's highest-earning mobile game publishers.