Wizards of the Coast, creator of Magic: The Gathering and Dungeons and Dragons, brought in significantly less revenue in the third quarter of 2021 compared to the same period last year, according to parent company Hasbro’s latest financial report.
Hasbro released its 2022 third quarter financial results on October 18. These show a substantial loss in its Wizards of the Coast and Digital Gaming segment: a 16% drop in revenue compared to Q3 2021. Whereas the segment raked in $360.2m in Q3 2021, its revenue was only $303.5m for this year’s third quarter. Similarly, adjusted operating profits declined from $159m to $102m.
Hasbro’s report chalks much of the revenue loss up to Magic: The Gathering sets being “scheduled for release in the fourth quarter versus the third quarter last year”. In 2021 there were two premier sets released in Q3. There was Adventures in the Forgotten Realms in July and Innistrad: Midnight Hunt in September.
Q3 2022 was relatively sparse for Magic by comparison, thanks to delays to Unfinity and the MTG Warhammer 40k decks that pushed these product releases back to October. We still saw Double Masters 2022 and Dominaria United released in this timeframe, however.
Hasbro says the 36% decline in the segment’s operating profit is down to a combination of factors, including lower revenue, higher production costs, and higher investment in development. It also lists incremental royalty expenses due to new Universes Beyond set releases, and amortisation from the company’s D&D Beyond acquisition as contributing factors.
Overall, Hasbro saw a 47% decline (31% when adjusted) in operating profit in Q3 2022 compared to last year, despite only a 15% change in revenue. Next to that, Wizards of the Coast’s results perhaps don’t seem so bad.
In the report, Chris Cocks, Hasbro chief executive officer, says he expects a particularly strong Q4 for the WoTC and digital gaming segment. “Growth will be driven by what we expect to be one of the biggest fourth quarters for Magic: The Gathering as we kick off the brand’s 30th anniversary and celebrate Hasbro’s first ever $1 billion brand,” he says.