When Barbie Books and the Barbie game franchise first launched in 2004, there was no question that it was destined for greatness.
It sold over 1 million books a year, spawned two video games, and featured celebrities like Will Ferrell and Amy Poehler.
Now, however, the gaming company is struggling to keep up with the rapid growth of digital publishing, and the future of its digital business is uncertain.
Barbie was valued at $3.5 billion when the deal with Mojang was announced in 2016.
Barbablog recently released a report outlining the challenges Barbie is facing, and how it’s been forced to adjust its strategy in an effort to stay ahead of the game.
The report is titled “The future of BarbieGames,” and it details the company’s struggles with digital sales, declining online traffic, and declining customer retention.
The problem is, there’s a lot of pressure on Barbie to keep growing and churning out new games, according to the report.
It says Barbie will need to “focus on monetization to continue to make money” and that it will need more revenue to stay competitive in the marketplace.
“We believe it’s going to take a lot more than just [the] barbie book and Minecraft games, we believe it is going to require the barbie books and the Minecraft games to be able to sustain the growth that they’re experiencing now,” said Peter Barabos, chief executive officer and cofounder of Barabablog.
“The barbie series and the barbies games are the only thing that BarbieBooks has had to contend with, but the Minecraft series and all of the other games have been struggling to gain traction because they have no monetization.
The barbie titles have been able to continue as they are, but it’s hard for other titles to sustain growth.”
The report also highlights some of Barboblog’s other struggles.
Barbies recent revenue growth is “well below its industry peers and is not matched by its competitors,” which has contributed to “substantial cash burn,” the report said.
“Our business has become significantly more competitive, but we’ve also seen that our competitors have not responded with the same level of investment in technology as we have.”
Barbie books sales have been “substantially lower than the industry peers,” according to Barababs report.
Barabblogs share price has declined more than 30% in the last year, and it’s now trading at a discount to its peers, according.
The company’s board recently voted to slash its 2016 dividend, citing the decline in its books sales and a “significant” cash burn, which will reduce its profitability.
Barabiog is also struggling with declining online activity, according the report, with its average monthly active users decreasing to 557,000 in 2018.
Bariboblogs top priority for the next year is to find new ways to monetize the business, including increasing its revenue from other sources.
Barobblog said in a statement to CNBC that it expects to continue making new Barbie games in 2018 and that the company will continue to focus on expanding the barbob line, which includes a line of digital books, and creating a series of themed books.
The publisher has also launched a new digital series called “The Barbies.”
Barbibobl, which means “barbie” in Spanish, was created by Baraboblog to encourage people to explore the world of the Barbies.
The first book in the series, The Barbies in Paradise, was released in April 2018, and Baribablogs latest book, The Book of Barbies, was published in June 2018.