Hasbro Says WOTCs Profit Is Up, Overall Revenue Down - What This Means For MTG

Wizards of the Coast and Hasbro have been pretty clear about their intentions to increase the amount of money they make. For WOTC, things are going as planned. However, despite the success that Magic: The Gathering is having, the overall revenue for Hasbro is reportedly down quite a bit. We'll take a look at what the numbers are saying, the reason things may be shaking out the way they are, and what these numbers mean for us MTG players.

Hasbro Reveal Quarterly Earning Report

Hasbro recently revealed a massive amount of info about their quarterly finances. Some of which, of course, has to do with Wizards of the Coast and Magic: The Gathering. You can read the full rundown here if you're interested in how much Play-Doh has made over the last few months, amongst many other things.

For those who don't want to read the rather lengthy report, here is the short version of what pertains to Magic: The Gathering players. Overall, WOTC and MTG increased the money they brought in for this quarter by 40%! Shoutout to everyone who bought Commander Masters and LOTR. However, the gross revenue for Hasbro as a whole is down by 10%. In other words, MTG crushed, and Hasbo is still down in the big picture.

Let me put into perspective just how much our beloved card game is carrying the company. The total yearly contribution of Monopoly Go and Baldur's Gate 3 combined is expected to be around 90 million dollars. The Lord of the Rings set alone made around 200 million since June. So, MTG pulled in double the second and third-place earners in a third of the time. And will continue to be sold throughout the following year.

So, why is Hasbro still down overall?

Why Is Hasbro Down 10% If MTG Is Doing So Well?

According to Hasbro, they're struggling in many other departments. Again, this is the short version. Hasbro has a few broad things they do - Toys, entertainment like movies and shows, and gaming like MTG and DnD. I don't know if you have children (or perhaps collect toys yourself), but toys aren't selling like they used to. Kids these days have things like iPads, VR gaming, and many more things that might make an action figure seem underwhelming.

Next, even if you collect toys as an adult, Hasbro has fallen from grace regarding quality toys. In other words, they don't make them like they used to. And the beloved, popular franchises that the company once sold like wildfire (such as G.I. Joe and Transformers) aren't as in the limelight as they used to be.

Then there's the entertainment sector. If you didn't know, many writers and actors have been on strike recently. It seems the writers are coming around... The actors, not so much. Hasbro said, "Turning to the Entertainment segment. In the quarter, revenue declined 42%, primarily as a result of the writers and actors strikes." and went on to say, "...for entertainment, we continue to expect revenue declines of 25% to 30%, which incorporates the impact of the writers and actors strikes section deliveries in the back half of the year."

I mention this to drive home the point that Hasbro would really be in a hurt box if not for Magic. It's an essential factor when we look at the game's future. Continuing to have overall profits in the toilet is not an option for Hasbro, and they're expecting continued losses in many departments. What this means is they're going to want more money from WOTC moving forward.

What This Means For Magic: The Gathering

If Hasbro wants more money from Magic, it means we're going to get more products overall, and they're going to cost more. It could also mean that we'll continue to see cuts in quality when it comes to physical card production, the story/lore, and the art, which will make the sets cost less to make. It's very likely going to be all three.

As I've said many times now, Universes Beyond is going to be the way they take the game moving forward. After the success of LOTR, Hasbro will continue to do sets based on other IPs and have rare, serialized cards included. We just had Doctor Who drop (with the serialized Doctor cards) and have Fallout right around the corner with the numbered bobbleheads.

UB and numbered cards are here to stay. So, what else? I think, in general, sets will cost more moving forward. The upcoming Modern Horizons 3, for example, is the perfect candidate for a massive price tag. It's also likely that the new play boosters will end up at a higher price than the previous products.

Let's assume the numbers paint an accurate picture of the future, and my predictions are correct - More releases, higher prices, and more cost-cutting. What does that mean for MTG?

Universes Beyond

First, as mentioned, more crossover sets. I don't know what these licensing deals cost Wizards, but many will be Hasbro IPs, for sure. Aside from that, building in other worlds is profitable and saves money on creating new stories, lore, and characters for Magic. So, even beyond their appeal to people who may not play MTG, they're likely cheaper to produce than a bonified, on-canon MTG set.

More Secret Lairs

Similarly, we'll probably see more Secret Lair drops and other "print-to-demand" products. Again, this takes much less work and manpower than a complete set. Being able to print the product as it's bought also helps ensure they don't get stuck with inventory that can't move. Secret Lairs is another avenue to dip into popular franchises that couldn't support a whole set, such as Street Fighter and Evil Dead.

Higher Prices... Lower Quality?

We've established that prices will go up. What I'm interested in is how WOTC and Hasbro will walk the line here. MTG players may fork over heaps of their cash for lackluster sets, but we've learned there is a line. At some point, most players will not buy products that are too expensive and not very good. The most prominent example is Magic 30. WOTC tried to sell legal proxies for $250 a pack, and very few people bit.

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To a lesser extent, the same thing happened with March of the Machine: The Aftermath and Commander Masters. Aftermath was overpriced but was mainly a lousy product. Commander Masters would have been fine at a decent price, but they wanted more than the cards were worth (I know, they always do), but it was especially egregious in this case.

The lesson here is that they can't continue to cut corners and increase the price in tandem if they want a high percentage of customers to give them money. How will they walk the line between cost and quality? Only time will tell.

The Plans To Revive Standard

Wizards has been making several changes recently to bring back Standard. And it does seem like they are on the right path. However, many things that would need to happen to breathe life into the format involve moving away from the quick cash grab sets and fire printing of powerful cards aimed to mix up eternal formats like Commander and Modern.

This leads to a potential conflict of interest. I struggle to think of a way that the company can spend less money and get more moving forward and, at the same time, put the long-term health of the game at the forefront. Again, Universes Beyond, Secret Lairs, Masters sets, and Horizons are likely the answer.

Take Lord of the Rings as an example. Cards like The One Ring and Orcish Bowmasters managed to really shake up Modern and even Legacy and Commander. But that wasn't a standard legal set. The same is true for Modern Horizons or, possibly, future Pioneer Horizons sets.

Hypothetically speaking, these outlets would allow Wizards to maintain a healthy Standard and continue to explore the most profitable crossovers possible, print powerful cards, and include chase collectibles while not muddying up the game's core format.

Conclusion

Given the monumental success of the Lord of the Rings set, I'm not surprised that WOTC is bringing in record-breaking amounts of cash. What is a little surprising to learn is that despite this success, Hasbro is still in the hole. And the projections for many of the company's sectors look grim. Simply put, MTG is floating the boat at Hasbro and will only be expected to do more.

As a game player, this isn't exactly the news you want to hear... Because they'll try and get that extra money right out of our pockets, dear reader. We can, at least, hope we're getting a decent product in return. Would I be a pessimist to say I'm skeptical this will happen? Perhaps. Am I right? Likely so.

Now I want to hear from you. What do you make of the numbers, and how do you think they'll affect WOTC and MTG moving forward?