{"id":133,"date":"2023-04-28T09:25:39","date_gmt":"2023-04-28T08:25:39","guid":{"rendered":"https:\/\/boardgamewire.com\/?p=133"},"modified":"2023-06-20T12:12:55","modified_gmt":"2023-06-20T11:12:55","slug":"hasbros-strong-q1-results-show-increasing-reliance-on-magic-amid-consumer-spending-slump","status":"publish","type":"post","link":"https:\/\/boardgamewire.com\/index.php\/2023\/04\/28\/hasbros-strong-q1-results-show-increasing-reliance-on-magic-amid-consumer-spending-slump\/","title":{"rendered":"Hasbro’s strong Q1 results show increasing reliance on Magic amid consumer spending slump"},"content":{"rendered":"\n

High demand for Hasbro<\/a>‘s February Magic: The Gathering<\/a> release, Phyrexia: All Will Be One, helped propel the gaming giant to a profitable first quarter despite weaker sales from its toys segment.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

A report from Deloitte released yesterday<\/a> 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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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<\/a> by printing too many cards and selling them at too high a price.<\/p>\n\n\n\n

The investment bank doubled down on that opinion in February this year<\/a>, saying Hasbro faces a sharp share price decline if it continues to “destroy customer goodwill”.<\/p>\n\n\n\n

Hasbro<\/a> continues to dilute the brand value of its popular Magic: The Gathering card game, according to a Tuesday note from Bank of America<\/a>, which said that the company faces a steep decline in its share price if it continues to “destroy customer goodwill.”<\/p>\n\n\n\n

But Chris Cocks said in the earnings call, “The fundamentals of Magic, Hasbro\u2019s first billion-dollar brand, are strong with new player growth, player engagement and player sentiment all pointing in the right direction. <\/p>\n\n\n\n

“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. <\/p>\n\n\n\n

“Given our release calendar, we expect revenue for Magic to be down in Q2 but up solidly in Q3 and for the full year.”<\/p>\n\n\n\n

Upcoming Magic: The Gathering releases for 2023:<\/strong><\/p>\n\n\n\n