Dive Brief:
- Hasbro’s net revenue increased over 16% to $1.1 billion in Q2, largely driven by its Wizards of the Coast and digital gaming segments, which were up 27% year over year.
- Magic: The Gathering revenue increased 32% to $545 million, marking the first time the property surpassed $500 million in quarterly revenue in its over 30-year history, per a Tuesday company press release.
- Second quarter net income was $161.3 million, compared to a nearly $855 million loss in the year-ago quarter.
Dive Insight:
Magic: The Gathering is “off to a ripping start,” this year, Hasbro CEO Chris Cocks said on a call with analysts.
”While Magic’s roots are based in the thousands of local game stores around the world, Magic is not a niche hobby business. It is a mega franchise,” Cocks said.
The toy company has reviewed its portfolio and updated its digital plans, which include canceling several games scheduled for release in 2028 and beyond. Hasbro recorded a $56 million noncash write-down this quarter for related capitalized costs due to those decisions.
The company is instead focusing its digital strategy on trading card and role playing games with brands that have the potential to become a significant digital franchise. Magic: The Gathering, for instance, is one of the most successful digital trading card games of all time, per Cocks.
As a result, Hasbro now expects its total digital spend to decrease at least 25% annually by 2028.
“As we move into the next generation of games, our model becomes more efficient. We are past the startup phase. We now have more mature tools, teams and production processes,” Cocks said.
Hasbro earlier this summer announced the launch of AI studio Sixth Wall in a bid to better control its intellectual property. Sixth Wall introduced a new category of IP licensing called behavioral licensing, which is focused on how characters think, speak and interact in dynamic experiences.
The toy company earlier this month also debuted Play-Doh for adults through its Blooms kits, marking the company’s entry into adult crafting and home decor. The initial launch sold out at major retailers in less than 24 hours, according to Cocks.
Hasbro has raised its full-year outlook, with total revenue expected to increase between 5% and 7%, compared to the previous expectation of a 3% to 5% increase.
