Hasbro CEO Chris Cocks called Magic a “standout performer” in the earnings call for its Q1 results, which highlighted the increasing importance of the company’s first billion-dollar brand to its bottom line.
Magic revenues grew 16% in Q1 year-on-year, a feat Cocks described as particularly impressive given the game’s 40% growth in Q4 2022.
That helped offset a 23% slump in revenues for Hasbro’s consumer products arm, which includes its board game operation, and a 14% decline in revenues for the company as a whole.
High inflation has dominated global markets over the past 12 months, and the scramble to raise interest rates to counter runaway price rises has severely cut into consumer spending.
A report from Deloitte released yesterday focused on the state of the US consumer said, easing inflation was helping drive optimism around the economy and personal finances, but consumers remain focused on savings over spending – especially when it comes to discretionary purchases.
Outgoing Hasbro CFO Deb Thomas, who is retiring after 25 years, told the earnings call that the business “remains cautious about the macro and the consumer environment”, but highlighted a strong Magic release schedule as a key element of a second half of 2023 for Hasbro that improves year-over-year.
That reliance on an increasingly hectic Magic release schedule is not without its dangers, however. Last November Bank of America warned that Hasbro was destryong the long-term value of Magic by printing too many cards and selling them at too high a price.
The investment bank doubled down on that opinion in February this year, saying Hasbro faces a sharp share price decline if it continues to “destroy customer goodwill”.
Hasbro continues to dilute the brand value of its popular Magic: The Gathering card game, according to a Tuesday note from Bank of America, which said that the company faces a steep decline in its share price if it continues to “destroy customer goodwill.”
But Chris Cocks said in the earnings call, “The fundamentals of Magic, Hasbro’s first billion-dollar brand, are strong with new player growth, player engagement and player sentiment all pointing in the right direction.
“We expect the positive momentum for Magic to continue with Q1 also seeing one of our most successful pre-orders ever for our upcoming Universes Beyond The Lord of the Rings: Tales of Middle- arth set which will launch in late Q2.
“Given our release calendar, we expect revenue for Magic to be down in Q2 but up solidly in Q3 and for the full year.”
Upcoming Magic: The Gathering releases for 2023:
- March of the Machine: The Aftermath – May 12th
- Universes Beyond – The Lord of the Rings: Tales of Middle-Earth – June 23rd
- Wilds of Eldraine – Q3
- The Lost Caverns of Ixalan – Q4
- Universes Beyond – Doctor Who Commander Decks – Q4