Hasbro gains big time from D&D, Magic, Monopoly, and Baldur's Gate 3

With the hit CRPG Baldur's Gate 3 potentially reaching upwards of 10 million unit sales in its first year, Hasbro is looking at royalties of at least $61 million. Meanwhile, Monopoly Go went up the charts on the Apple App Store, generating $200 million revenue. And WotC's, Magic: The Gathering saw massive sales with its crossover with The Lord of the Rings. As Haas states:

These two games [Baldur's Gate 3 and Monopoly Go] could materially contribute to earnings per share in [the] fourth quarter of 2023 through 2024. We recently upgraded Hasbro to Buy on the strength of its Lord of the Rings Magic set. Hasbro has now seen two more successful releases, early wins for Hasbro's Blueprint 2.0 strategy which focuses on fewer, bigger brands.

More information can be found on the Business Insider report at this link.

It should be noted that back in November 2022, Bank of America

downgraded

Hasbro stock from "Buy" to "Underperform". This stemmed from the overproduction of Magic: The Gathering, not just with its in-house expansion sets, but also with the crossover sets with other popular IPs. The public pushback by fans and retailers against the 30th Anniversary Magic: the Gathering sets and their high prices further escalated this negative perception.

Other issues related to Wizards of the Coast and parent company Hasbro arose in the months after that. Leaks of the proposed changes to the Dungeons & Dragons OGL and SRD (System Reference Document) became the talking point until WotC backed up and released the license as a Creative Commons. Another issue was the apparent harassment a Magic: The Gathering fan received from Pinkertons WotC hired to address an accidental set leak of March of the Machine: The Aftermath. And the big screen Dungeons & Dragons: Honor Among Thieves film had a mediocre showing at the box office.

Yet, regardless of all of this, consumers are speaking with their attention and wallets. And it may not stop with D&D, Magic: The Gathering, and Monopoly. As Haas pointed out:

We increasingly see risk skewed to the upside for 2024. We believe investors don't fully appreciate Hasbro's potential to generate high-margin licensing revenue from its strong IP library which includes Transformers, Power Rangers, GI Joe, My Little Pony, and many more.

NASDAQ reported Hasbro stock closed at $67.71 with a volume of 4,019,184 when the market closed on August 22, 2023. It is currently holding at $67.07 as of the time of this writing.