Hasbro’s Wizards of the Coast division is planning to license new IP for use inside its signature gaming franchises.
Revealed in a Hasbro earnings call this week, Wizards of the Coast plans to use its Magic: The Gathering and Dungeons & Dragons play systems for more IPs. This will expand the Universes Beyond program for Magic: The Gathering, but is a new development for Dungeons & Dragons.
“You’ll see us continue to expand the number of formats and reach new customer segments by expanding our Universes Beyond initiatives, which brings IP from outside of Magic into the Magic play system,” said Cynthia Williams, the newly appointed president of Wizards of the Coast and Digital Gaming. “We’ve talked a lot about Universes Beyond in Magic, which is this concept of thinking about Magic as a play system and bringing in outside brands or outside IP into that play system. We see potential for that with D&D as well.”
Hasbro also talked about its newly acquired digital roleplaying companion D&D Beyond, which it purchased from Fandom this month.
Hasbro sees D&D Beyond as the primary hub for its expansion of the D&D play system into other IPs, and also plans to create physical products exclusive to the platform. “We see a lot of e-commerce and direct opportunities working in partnership with our Hasbro Pulse team to have physical digital tie-ins that are unique to the platform,” Williams said.
D&D Beyond has been growing at a three-year compound annual growth rate of over 50%, and was a major impetus for bringing more players into the Dungeons & Dragon gaming world. Hasbro D&D Beyond to enjoy an operating profit margin of 65%, significantly more than the rest of the Wizards of the Coast and Digital Gaming division, which currently has an operating margin of just over 40%.
In addition to detailing its plans to extend the IP for its signature gaming offerings, Hasbro revealed that game sales continue to be a strong sector for the company. Sales in the Wizards of the Coast and Digital Gaming segment were up 9%, from $242.2 million to $262.8 million. Within the segment, tabletop revenues (Magic and D&D) were up 10%, while digital and licensed gaming sales were up 6%.
Magic: The Gathering sales (print and digital combined) were up 7%, behind strong sales for Kamigawa: Neon Dynasty, which Hasbro said was its best-selling winter set of all time, up 28% over the same set last year. It was one of WotC’s top three Magic sets ever, and its the fifth set that generated over $100 million for the company.
Hasbro gaming sales excluding franchise brands Monopoly and Magic: The Gathering were up 5%, led by Dungeons & Dragons, Avalon Hill’s HeroQuest,and Duel Masters. Total gaming sales including franchise brands were up 4% over Q1 2021 to $379 million.
The only negative note for Hasbro’s gaming division was due to the global supply chain issues that are affecting virtually all companies. While sales and revenues grew, operating profits actually shrank by 3% due to higher product costs, increased freight costs, and the HR costs for product development.
In order to trim some of those logistics costs, Hasbro says it has purchased a massive supply of paper products to make sure it has enough stock on hand to fulfill growing consumer demand.
Also, while Wizards of the Coast remained the fastest growing division for Hasbro, the company in general made a strong showing in Q1. Sales revenues increased by 4% from $1.115 billion to $1.163 billion, although net earnings were down 47%, from $116.2 million to $61.2 million year over year.