Hasbro, parent company of Wizards of the Coast (WotC), has released its Fourth Quarter 2023 and Full Year 2023 Financial Report.
WotC and the Digital Gaming Segment continues to be the main growth leader for Hasbro, as it is up 10 percent (up $526 million in profit), despite Hasbro’s 15 percent decline in revenue in 2023 due to drops in Consumer Products (-19 percent) and Entertainment (-31 percent). Magic: The Gathering tabletop revenue increased one percent with a strong performance from The Lord of the Rings: Tales of Middle-earth. Hasbro CEO, Chris Cocks, said that WotC and Digital Gaming is coming off a banner year, led by Magic’s Universes Beyond products, the success of Baldur’s Gate 3, and Monopoly Go.
Cocks said WotC and Digital overperformed in 2023 thanks to a series of blockbuster hits.
“Magic had another record year in 2023 with a string of amazing new sets, including out best selling set of all time, The Lord of the Rings: Tales of Middle-earth,” Cocks said,. “While a product like The Lord of the Rings creates a tough comp in 2024, we have some unique sets that fans are eagerly anticipating, including March’s Fallout, a new Commander-focused Universe Beyond product line, this summer’s Modern Horizons 3, the sequel to our prior best selling set of all time, and this September’s charming new world, Bloomburrow.”
Cocks mentioned that Magic will have some smaller Universes Beyond sets this year. Fallout will not be at the same size or scale of The Lord of the Rings: Tales of Middle-earth, but it will perform better than what a typical Commander would. Hasbro CFO, Gina Goetter, said Magic will have the same number of releases in 2024 as 2023, but revenue will be flat to down as they comp The Lord of the Rings: Tales of Middle-earth. Goetter said it is important to call out that Magic will be back to growth in 2025 as it expands its Universes Beyond lineup.
That growth in 2025 will largely come from the two premier Universes Beyond sets, making up a third of the six main set releases next year. Cocks said this will be the norm going forward and that those two releases make up the foundation of Hasbro’s bullishness on the growth of Magic in 2025.
“We believe the brands that we will be shipping in 2025 have the same kind of carrying power as The Lord of the Rings. The one that we have announced that will be in the front half of the year is Final Fantasy, which is just a juggernaut in role playing games,” Cocks said. “We’ve announced partnerships with a host of other brands, Marvel being one of the last ones we have talked about. There will be multiple sets associated with that. So for 2025 going forward, you should expect to see as part of our six premier sets per year, two of them will be Universes Beyond branded and we think we’ll have a similar uplift to what we experienced with The Lord of the Rings.”
Cocks said the special emphasis on Universes Beyond sets is new player growth. The Lord of the Rings: Tales of Middle-earth was the most successful product ever in terms of brining in new players. He anticipates the same or potentially even greater results for IPs like Marvel or some of the other brands that are in store for the future.
Barely mentioned in the report and earnings conference call was the layoffs of 1,900 Hasbro employees in 2023. Goetter only touched on it briefly in her opening statement stating that, “While these decisions are never easy, this move will enable cost savings, which will improve profitability, and fuel investments toward long term growth around toy and digital games innovation.”
One bullet point in the list of 2023 highlights from the company was that it paid $388 million in cash dividends to shareholders for the full year and reduced debt by $506 million.
Read the press release from Hasbro.