Back in January, Scrabble makers Mattel (NYSE: MAT) and Hasbro (NYSE: HAS) sent cease and desist notices to four parties involved with the production and distribution of Scrabulous, a popular Facebook application based on Scrabble.

The company has since reportedly entered into negotiations with the creators of Scrabulous, aimed at working out some kind of licensing deal, but now it seems that Mattel may be deciding to do it without them.

"Scrabble by Mattel" has appeared on Facebook in Beta mode, although it is technically only available to players outside of North America, where Hasbro owns the rights.

According to the New York Times, the official version of Scrabble has received mixed reviews so far: "Facebook Scrabble takes a long time to load, does not always quickly update to show recent moves, and the words the game will accept do not reflect standard Scrabble dictionaries, or even the English language."

Given how popular and functional the Scrabulous app is, pairing up with its Calcutta-based creators seems like the best solution for Mattel and Hasbro -- by agreeing not to sue them for past copyright infringement, they could probably get them to run the game for a cut of the substantial advertising revenue it generates.

Tens of thousands of Scrabulous players threatened to boycott Mattel products if Scrabulous is shut down.

Hasbro (NYSE: HAS) and Mattel (NYSE: MAT), which own the right to Scrabble, are none too pleased with Scrabulous, a knockoff of the game that has gained tremendous popularity as an application on Facebook.

The game-makers have sent cease and desist notices to four parties involved with the production and distribution of Scrabulous, but it isn't immediately clear who those parties are.

In a statement, Hasbro said that it hoped to reach an amicable solution, but that, "If we cannot come to one quickly, we will be forced to close down the site and its associated distribution points."

The obvious solution is to make the game a fully-licensed version of Scrabble, and give Hasbro and Mattel a cut of the ad revenue it generates. Such a move would also probably boost sales of the board game at retail stores as people realize that Scrabble is actually pretty fun.

According (subscription required) to the Wall Street Journal, "While there are authorized Scrabble games online, Scrabulous has gained popularity because it's free, easy to play with friends and easy to access on Facebook. Scrabulous listed more than 600,000 daily active users on Facebook as of Wednesday and is one of the 10 most used applications on the site. People can also play at Scrabulous.com."

This week games-maker Electronic Arts (NASDAQ:ERTS) announced a deal with Hasbro (NYSE:HAS) to create electronic versions of the toymaker's brands, including Scrabble and Monopoly. The deal runs through 2013, and covers all Hasbro properties, which include such popular names as the Bratz dolls, the Fantastic Four, Gastrointestinal Joe, The Simpsons, and Twister.

While EA hasn't released information about their plans to make use of these properties, the possibilities are endless –

• Monopoly Extreme -- Why should players be allowed to stroll uninhibited down Boardwalk and Atlantic Avenue, when the game could be much more interesting in a Grand-theft- Auto-type world? Imagine shooting your way out of Marvin Gardens, highjacking a Reading Railroad train, and trolling Baltic Ave. for a hooker.
• Chutes and Ladders -- In the video world, falling into a chute would cost the player much more than a few squares – perhaps even a visit the Hell! Ladders, on the other hand, could lead to greater rewards, such as a front row seat at a Barry Manilow show in Las Vegas. Or do I have those backwards?
• Bratz – the Hilton version. Dress up your Bratz from an endless variety of skanky outfits (underwear tonight- yes, or no?), take her partying in the hottest Hollywood clubs, indulge her in the very best drink and toot, and check her in to the most exclusive rehab clinics. Accumulate points every time she manages to smack a paparazzi with her purse.
• Scrbl – txt vrsn. Txtrs cmpt 2 c who cn use t fwst ltrs 2 spl wrds.
• Easy-Bake Iron Chef – No more light bulbs and tasteless cakes. In the virtual world, mini-chefs can compete with gamers around the world to create monster desserts, exotic entrees or even cook up batches of meth.

Now, that's entertainment.