AI-powered versions of twelve iconic Hasbro characters, including Mr. Potato Head, Megatron, and G.I. Joe villian Cobra Commander are now available for licensing from Hasbor's new AI Studio, Sixth Wall.(Photo by Mario Ruiz/Getty Images)

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Toymaker Hasbro today unveiled a project it has been working on in stealth mode for the past year - an AI studio tasked with giving iconic Hasbro properties like Mr. Potato Head interactive, AI-powered personas.

Hasbro’s proactive approach to AI could signal the beginning of a new era in character licensing, and create a lucrative revenue stream for the giant toy and entertainment company.

The company envisions a new kind of licensing model, which it is calling behavioral licensing, in which it licenses not only the character’s voice, but gives licensees access to a character’s personality, background story, and full creative DNA.

Hasbro executives preface discussions about the AI studio with some important caveats. At this point they are not creating AI character personas designed to interact with children, or to be embedded in toys. Also, the AI personas are a B2B offering, not something consumers will purchase, with characters available for licensed use by business partners such as theme parks and entertainment venues, or to be used as chat assistants for retailers, or in-store brand amabassadors.

The AI studio also addresss a key industry problem, according to Hasbro CEO Chris Cocks - the unauthorized AI use of intellectual property such as Hasbro’s iconic characters. Hasbro, he said in a statement, wanted to create a trusted way to bring characters onto AI-platforms, and to give credit to, and compensate, the voice talent behind those characters.

As of today Hasbro is making AI personas of 12 of its characters - including Optimus Prime, Cobra Commander, and Mr. Potato Head - available for licensing.

“We’re preparing our IP [intellectual property] for the age of AI," said Roberta Thomson, the Hasbro exec who will head the effort as CEO of the company’s new AI Studio, which Hasbro has named Sixth Wall.

Sixth Wall, Thomson said in an interview, is “building a proprietary tech platform that we call CharacterOS - the Character Operating System - which contains what we like to call a Golden Record for each of our characters, an AI-friendly set of data that encodes the lore and canon of the character and their universe, their personality and emotional range.”

Toy industry insiders who were given a sneak preview of the studio’s capabilities at last month’s Licensing Expo were amazed at the ability of the AI personas to have detailed interactions with humans, and respond to questions while fully remain in character.

“Hasbro has, smartly, developed a genuine way to interact with its characters that maintains the integrity of the source IP while embracing human creators and voices to power the experience,” said James Zahn, Editor in Chief at The Toy Book.

Zahn had an opportunity at the Licensing Expo to interact with one of the characters Sixth Wall is officially unveiling today, the Cobra Commander character from the G.I. Joe franchise.

Zahn said he was impressed with how believably the AI Cobra Commander reacted with characteristic paranoia and rage when Zahn suggested one of the Licensing Expo booths was a front for top-secret weapons developer M.A.R.S Industries.

“Let’s just say I raised his digital blood pressure, as he immediately accused me of being in league with Destro, whom he assumed had gone behind his back with some scheme,” Zahn said. “This may sound like nonsense to most, but for G.I. Joe fans, this is a direct line into the lore that lives well beyond the toys themselves.”

Zahn gives Hasbro credit for waiting to announce the AI studio until it had concrete examples of AI personas to show. “The industry knew Hasbro had an AI studio, but few knew what those folks were actually building, and the possibilities for its application extend far beyond traditional toys,” he said.

Thomson, who was tapped to head the studio a year ago, said Hasbro began experimenting with conversational AI for its characters at the end of 2022. It created an AI version of a Ouija board, and an AI-enabled Trivial Pursuit - Trivial Pursuit Infinite - which used AI to allow players to request questions about a multitude of topics.

“Hasbro’s been innovating around play for more than 100 years so it’s no surprise that we wanted to avail ourselves of all the newest technologies," she said.

With the CharacterOS platform, “We’re super excited to bring forth this new model to the licensing industry," Thomson said, “licensing not just the static IP that appears in toy, the video game, the movie, but actually the behavior of a character.”

Hasbro today also announced that it has entered a strategic partnership with AI audio company ElevenLabs to add Hasbro characters to its audio marketplace.