Hasbro CEO, Chris Cocks, and President of Wizards of the Coast (WotC) and Digital Gaming, Cynthia Williams, held a fireside chat focused on Magic: The Gathering today, speaking on topics like the game’s growth, future, business strategy, and more.
Cocks opened things up talking about Hasbro’s corporate strategy, dubbed “Brand Blueprint 2.0,” which takes the business from a breadth strategy to a depth strategy that now focuses on growing eight to 10 brands, with gaming being a big one that they believe that can be a leader in world wide. Magic has been one of the biggest success stories in the games category for Hasbro in the past decade, but a shift in philosophy around 2016 launched Magic from around a $400 million brand to what is on pace to be the first $1 Billion brand.
The big change was moving away from viewing Magic players as a mainly competitive-focused monolith. While WotC was once afraid to make and market products for non-competitive players, shifting gears to design products for all players was the boost the game needed after Magic plateaued around 2014-2015.
“If we were able to segment our player profiles in really simple ways: the competitive player, the social player, and the collector, and build products that spoke to each of them, we could make each segment happier, we could engage them more, we could get more of their time and more of their share of wallet and grow the business as a whole,” Cocks said. “As a result, over that intervening six-and-half-year period, we probably either tripled or came close to tripling the overall Magic business. And we have been able to do it across over a wide set of products and a wide set of segments that have made the business healthier than ever.”
That shift lined up with the data WotC gathered. The average active Magic tabletop player is 30 years old with a range from 13 to over 45 and varying degrees of involvement. A third of the player base has less than three years of experience playing while another third has more than 10 years of experience. The other factor that stands out is that more than half of all Magic players identify as social players, their enjoyment comes from the social experience, with more than 70 percent of players playing Commander — the game’s most popular format. Competitive players only make up about 20 percent of the player base, with collectors accounting for more than double that percentage.
“We look at how and why they play. We’ve seen growth in causal players, who we estimate represent about 80 percent of the player base, with the competitive player representing the remaining. And this single insight has really led to a major rethinking of our offering, and how to serve our growing and more diverse player base,” Williams said. “Over half of our players identify as social players and about 50 percent are collectors of some kind.”
Williams pointed out that WotC has more than 10 million registered digital players on MTG Arena as well. She said the fastest growing category of Magic players are the hybrid players, those who play on digital and tabletop. This group tends to have the highest satisfaction rates with the game and highest level of spending. Williams said the hybrid players spend 40 percent more than the average player across all expressions. Notably, Williams didn’t mention player statistics for Magic Online, the game’s older digital client.
The growth in digital players is also is leading to more players going to local game stores to play, galvanizing the hybrid player base, according to Williams. In-store play participation numbers are trending up and they are already up to about 75 percent of where they were pre-pandemic. Williams said more than 80 percent of WPN stores reported that they are growing or equal to where they were last year, with more than 60 percent reporting growth in business.
With the influx of tabletop players from the digital realm, MTG Arena will refactor the new player experience to improve onboarding for new players and help them quickly find the play experiences that appeal to them the most in 2023. This will coincide with WotC’s acquisition efforts and looks to maximize the impact of MTG Arena’s upcoming launch on Steam, the largest gaming platform in the world other than mobile. The Steam launch will mark the biggest expansion for MTG Arena since last year’s mobile full mobile release.
“We will continue to engage new players and longtime Magic players with our expanding product releases and event offerings, including our first digital Universes Beyond set, featuring Lord of the Rings,” Williams said. “We’ve seen really great engagement with our premier play launch, and 2023 will see our first full year of Arena Championships and Qualifier Weekends, as well as our increasingly popular Arena Opens.”
With Magic on pace to be the first billion-dollar brand for Hasbro, Williams reiterated a sentiment heard often in the community: Magic is still growing and bigger than ever. Part of that growth comes from the increase in product releases, which was the answer to providing more segment-specific products to the many audiences in the game. While WotC has stayed consistent with six tentpole releases — or major sets like Standard-legal expansions and supplement sets like Masters sets or Un-sets — the company has ramped up the number of micro-sets with products like Secret Lair drops and Commander products. This year alone saw more than 50 Secret Lair drops to go along with main sets, Commander decks, and other preconstructed decks for various formats.
“We have been in a cadence of six tentpole releases a year for over three years now, and they are major releases that have the most to offer every kind of Magic player. With each of those tentpole releases we have expanded the number of booster product types to meet player preferences, including adding set boosters and collector boosters,” Williams said. “Then we will have smaller print run products sprinkled between those tentpole releases that are opt in, depending on what type of player you are and what resonates with you. If I were summarizing it, I’d say our growth has come from monetizing more player segments and not just from increasing the spend of the same core set of players, and our product release schedule really reflects that.”
Supply chain issues impacted the 2022 release schedule in the second half of the year, making the increase in products feel even more apparent. On October 7, the Warhammer 40,000 Commander decks and Unfinity released on the same day. Williams said WotC will not schedule tentpole releases as close together going forward.
While supply chain strains are one problem for WotC, inflation and the rise in price of materials for card games — things like paper pulp and demand for printing presses — are troublesome, too. Cocks addressed these issues when talking about how WotC raised prices of Magic products for the first time in a decade.
“We are very aware across our business of the pressures that the general consumer is under. This year we took pricing action on about half of the Magic line, the first time we have done that in ten years,” Cocks said. “When we look at how we think about growing Magic over time, I don’t think it’s about rising prices on Magic cards or rising prices on Magic packs. At the end of the day it’s about growing our player base and it’s about leaning into our segmentation strategy and adding products that our players want and that have a lot of play value and collector’s value.”
The avalanche of Magic products have led many in the community to point toward product fatigue and losing interest in all the new sets and Secret Lair drops. When asked about the claim that Magic is printing too many sets — in reference to a Bank of America report that said Hasbro is hurting the long-term value of MTG by overproducing cards — Williams either misunderstood the question or answered in a way to address actual print runs.
“Most of our Magic releases and our SKUs (stock keeping unit) are print-to-demand, and this means that we print and reprint products in a set to support players and customers who want to buy it, usually to play with it. And after an initial selling period prior to the launch of a set, all reorders after that set reflect real demand, and our average post-launch sales quantities for our tentpole premier sets, remains unchanged in 2022 compared to 2021,” Williams said. “In aggregate, there is no evidence that Magic is overprinted, and the sentiment that Magic needs to cut print runs to support prices is a misunderstanding of our business and our customers. If our prices for a print-to-demand product rise significantly soon after launch that simply means we are not adequately meeting customer demand and we are making millions of players unhappy at their lack of ability to acquire the cards that they want to play.”
Williams spoke more on printing to demand later in the webinar, but mainly in the context of their goal to grow the game and number of players it has. She did touch on how WotC listens to feedback in regards to scaling back the supply of Magic’s 30th Anniversary Edition, a controversial product containing four booster packs of non-tournament legal reprints from Beta with an asking price of $999.
“Our goal is to grow our player base. We print and reprint products to meet demand from our players. We are growing that brand ahead of the industry and pushing the boundaries of where we can take the product. More often that not, we get that right, like our Universes Beyond product, Warhammer 40,000, which is already on its third reprint due to demand,” Williams said. “And sometimes we step back and listen to customer feedback like we did on our recent 30th Anniversary Edition, where we scaled back the expected supply to assure a great collector experience. Now that decision might not have been great for us in the short term finically, but it was definitely the right call for the long-term health of the brand and it is good for our fans.”
On top of the Lord of the Rings set from Universes Beyond scheduled for next year, products featuring Dr. Who, Final Fantasy, and Assassin’s Creed IP are also in the works.
Listen to the whole webinar with Cocks and Williams, hosted by Arpine Kocharyan of UBS, here.