While Wizards of the Coast, publisher of Dungeons and Dragons and MTG, continues to grow, its parent company Hasbro has reported a weak fourth quarter performance and is laying off 15% of its global workforce. The toymaker announced the widespread layoffs on Thursday, declaring a weak performance in its Entertainment and Consumer Products segment for Q4 2022, due to a “challenging holiday period environment”.
The company is expected to begin cutting jobs in the next several weeks, as it aims to reduce costs. It’s switching to a strategy that focuses on “fewer, bigger brands”, including its gaming, digital, and “rapidly growing direct to consumer and licensing businesses” (e.g. Hasbro Pulse).
The most successful area for Hasbro in an otherwise underperforming quarter was Wizards of the Coast. The company’s Wizards of the Coast and Digital Gaming segment had a Q4 revenue of $339 million, up 22% year-over-year. But this could not make up for the massive losses in the company’s much larger Consumer Products segment, whose revenue of $1 billion was down 26% on last year’s Q4.
Things appear less drastic when zooming out to look at 2022 as a whole, with Wizards of the Coast actually only growing by 3%. Consumer Products and Entertainment segments still saw significant losses, with a 10% and 17% shortfall respectively.
Despite its runaway financial success, Wizards has been under attack from fans in recent weeks, after its attempt to rewrite the DnD Open Gaming Licence caused many players and third-party publishers to revolt. In the face of so much controversy, the company rolled back its plans for the licence, and unveiled a more collaborative process, involving fans – though most recently it acknowledged that even this has missed the mark.