More than the closure of any specific store, the trend of digital-first consumers in younger generations threatens Hasbro's (HAS) ability to grow.
Shares of the Pawtucket, Rhode Island-based toy manufacturer slipped strongly in morning hours despite a fight back from a pre-market plunge.
Aside from the daily trading issue however, the company's business model could be in for some challenges ahead as younger generations avert their eyes from toys and onto technology.
"We remain wary of HAS's ability to recover lost sales from Toys 'R' Us in 2019, as children play with tablets more than traditional toys," CFRA analyst Camilla Yanushevsky said.
That is a prescient point of emphasis, as new studies suggest that many children are picking up an Apple (AAPL) iPad before they can even speak.
According to a report from Common Sense Media, 72% of children under eight years old have used a smartphone of tablet. That is a staggering number for those who grew up enjoying army guys or Star Wars action figures.
This builds on an issue for Hasbro in the next logical demographic, in "tweens" who could be targeted for beyblades, nerf guns, and Easy Bake Ovens.
Across both genders, 66% of children aged 8 to 12 play video games for an average of 2 hours per day, taking significant time from any interest in physical toys or board games.
However, the mobile and video game usage is not only applicable to a distraction from Hasbro's physical products, but in regards to essentially taking the games it makes and transitioning them to a mobile platform that can be played by friends sans a table to sit around.
The most obvious example is Zynga's (ZNGA) Words with Friends, which is essentially just mobile Scrabble. Why would kids assemble the board game when they can play the same game on mobile with no arguments over whether "Qi" is a word or not. No cleanup necessary, by the way.
To be sure, Hasbro does maintain a partnership with Zynga, but the partnership largely pertains to real world board games, not the more popular mobile trade.
Further, the company's Backflip Studios has tried to claw back some market share in the burgeoning mobile market with games like Dragonvale.
Still, none of the studio's games are in the top 50 grossing games according to Think Gaming.
"I think the first dynamic that you really have seen and it's a long arch of change that's gone on in the industry, there was a time not that many years ago because change is happening so quickly where the most important thing you could do is develop the game and then you put it out in the market," he explained. "[Now,] the most important days come as you look at day 7, 14, 21, 28, retention."
He said that the growth in the space takes significant capital as well as each company must balance monetization and investment in creators.
"You need more people who are in data analytics and monetization, you still need great artists and creators, but you have to find the right balance between the two," he said. "DragonVale is a key game of Backflip and it's now enjoining its eighth year of success or Transformers Earth Wars has been out several years and it's been reinvented over several different periods. So we do have some games that really track. We're adding some new games, but we also want the team to focus on getting it right creatively from an immersive standpoint but also games that are really able to monetize over time."
The main hope for Hasbro in the digital world is that their Magic the Gathering: Magic Arena PC game can cash in on investor excitement developed so far.
"Magic Arena is performing very strongly for us and exceeding the measures for engagement and stickiness," Goldner said. "We had nearly 350 million games of Magic played in Arena. On average, a Magic player is playing for about eight hours per week."
He added that his should help the company parlay into the eSports market as well, with some solid viewership on video game streaming platform Twitch.
Still, the game remains in beta and is uncertain as to its true impact, despite the strong early indications.
In the end, it only takes one hit game to make a world of difference as King gaming showed with Candy Crush and Supercell showed with Clash of Clans.
However, as Dragonvale, the highest touted game from its Colorado-based Backflip Studios, is around the 800th most popular game in terms of downloads according to SensorTower, Hasbro doesn't have one...yet.