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The world’s leading toy manufacturer, Mattel, Inc. (MAT - Analyst Report), recently renewed its existing licensing contract with Feld Entertainment, a live motor sports events specialist. According to the agreement, Mattel will continue to develop toys that include die-cast, plastic as well as feature vehicles, accessories and playsets modeled on the Monster Jam trucks under its Hot Wheels brand over the next five years.

Under the renewed contract, the company will also continue to be the official sponsor of the Team Hot Wheels Monster Jam truck race team, which performs at several live motor sports events.

Monster Jam – organized by Feld Entertainment – is a popular live entertainment show and television series which mainly focuses on the racing of the monster trucks. Mattel and Feld Entertainment’s relationship dates back to 1999 when the company’s Hot Wheels brand became the premier licensee for developing Monster Jam replica toys. Since its launch, Hot Wheels’ licensed Monster Jam vehicles have taken the retail market by storm and to date nearly 125 million monster truck toys have been sold worldwide. The company is also geared to launch the micro-sized monster truck toys, Hot Wheels Monster Jam Mighty Minis, in the fall of 2013.

Monster Jam’s huge acceptance made it a lucrative target for Mattel. We believe that the newly extended partnership with Feld Entertainment will further help Mattel to boost its Hot Wheels brand portfolio in the mass market, especially among children. 

Launching toys and games through new gaming deals seems to be a popular strategy in the market. Another toy maker, Hasbro Inc. (HAS - Analyst Report), recently penned a deal with Rovio Entertainment to develop toys and physical games based on the Angry Birds brand. This licensing agreement will allow Hasbro to boost its gaming initiatives further.

Mattel currently carries a Zacks Rank #3 (Hold). Some other gaming stocks that are worth a look include Electronic Arts Inc. (EA - Analyst Report) and LeapFrog Enterprises Inc. (LF - Snapshot Report), both carrying a Zacks Rank #2 (Buy).

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