And Other Fun Facts from Hasbro's Investor Day
Posted by Milton Griepp on February 26, 2021 @ 4:01 am CT
The top line number is that Wizards of the Coast had $816 million in sales in 2020, with Magic: The Gathering revenue up 23% and Dungeons & Dragons revenue up 33% for the year to record years for both. Sales for the WotC and Digital Gaming segment as a whole were up 19%, from $761.2 million in 2019 to $906.7 million in 2020. That means that the non-WotC portion of the segment (licensed Hasbro digital gaming) was $90.7 million.
The craziest number is that the operating profit for the WotC and Digital Gaming segment for 2020 was $420.4 million. That’s an eye-popping number on its own, representing a 46% operating profit margin, but what’s even more amazing is that the number for the WotC and Digital Gaming segment is over $112 million more than the operating profit for Hasbro’s entire consumer products segment, which includes its massive toy business and all the rest of its games. The consumer products segment generated over four times the WotC segment’s sales in 2020 ($3.65 billion), for less profit.
Wizards of the Coast on its own is also more profitable than Hasbro’s consumer products segment; even if you subtract the non-WotC digital gaming revenue ($90.7 million), the segment makes more money than the toys and other products.
From the outside, Hasbro looks like a toy company, but with these numbers, it’s revealed to be a geek game company with toy and entertainment divisions. No wonder Hasbro CEO Brian Goldner explained, "We have simplified our structure to maximize our growth and provide a clearer view to the drivers of Hasbro revenues, profit, margin, and cash generation."
The restructuring may explain why Hasbro moved the Avalon Hill brands to Hasbro from Wizards of the Coast last fall (see "Avalon Hill Will Move from WotC to Hasbro"); it leaves WotC as a clear play with its own creations.
The last time Hasbro reported separate numbers for sales by Wizards of the Coast was back in 2001, when WotC coffers were bulging from its sales of the Pokemon CCG, for which it had a license. Here’s another crazy number: adjusted for the inflation, WotC sales have actually gone down since then. Tearing apart Hasbro’s reporting after it acquired WotC, Wizards of the Coast sales in 2000 were likely around $725 million (with around $568 million of that amount due to Pokemon, see "Hasbro Results Cite Pokemon Decline"); that’s around $1.1 billion in 2020 dollars. But WotC has learned a lot since then, and selling its own brands is generating a big multiple of the $100 million or so in profits it was making selling someone else’s game along with its own.
In August of 2001, Hasbro moved WotC into its gaming segment for reporting purposes (see "Hasbro Clips WotC’s Wings") and the view turned opaque; this is the first time since then that we’ve had visibility to the geek game giant’s performance.
WotC is not slowing down in 2021 and beyond; not only did Hasbro announce that it is increasing the number of premiere card set releases for Magic: The Gathering from five to six in 2021, it is also launching a sub-brand under which it will launch Magic sets for Warhammer 40K and Lord of the Rings beginning in 2022 (see "Licensing Plans for ‘Magic: The Gathering’").
A new logo for Wizards of the Coast was rolled out for the event.