Mattel Inc. plans to fully acquire mobile games studio Mattel163 in a $159 million deal.
Mattel163, a games studio started in 2018 by the El Segundo-based toymaker and Hangzhou, China-based NetEase Inc., will now operate solely under Mattel. The studio is valued at $318 million, and Mattel will pay $159 million to acquire NetEase’s 50% interest.
“Our portfolio of iconic brands lends itself perfectly to the digital world,” Mattel Chief Executive Ynon Kreiz said in a statement following the release of the company’s fourth-quarter earnings. “The acquisition is in line with our strategy to capture the full value of our IP in high-margin, highly accretive entertainment verticals.”
‘Marked by uncertainty’
The move is another sign Mattel is accelerating efforts to expand its media empire as its toy business weakens. The company’s fourth quarter earnings included a net income of $106 million, a 25% decrease from the year prior. According to Kreiz, the company fell short of expectations in part due to slow growth in the U.S. during the holiday shopping season, as well as weaker performance with the infant, toddler and preschool demographic.
“(The year) 2025 was marked by uncertainty in U.S. trade dynamics that affected retailer ordering patterns for much of the year,” Kreiz said. “After two challenging quarters where U.S. retailers delayed orders, there was a significant acceleration in orders through most of the fourth quarter. December, however, ended up growing less than anticipated in the U.S., and our full year results finished below expectations.”
Nabbing Mattel163 is the toy company’s first acquisition since the company overhauled its growth strategy under Kreiz to expand use cases for its intellectual property through television, games and theme parks. It’s a similar playbook used by toy companies like Hasbro Inc., which sold Monopoly IP to Culver City-based Scopely Inc. to create one of the most downloaded mobile games in history.
“The margin of Mattel163 is almost twice the margin of the toy business,” said UBS analyst Arpine Kocharyan. “If done right and successfully, it can be hugely accreted.”
