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

Hasbro stock rallies thanks to brands like D&D, Magic: The Gathering, Monopoly, and partnering with Larian Studios for Baldur’s Gate 3.

Hasbro stock rallies thanks to the strength of brands like D&D, Magic: The Gathering, Monopoly, and partnering with Larian Studios for Baldur’s Gate 3. (Images: Wizards of the Coast/Hasbro and Larian Studios)

Hasbro is seeing green as the company's stock surged 7.3%. Analysts credited this to the strong showings of Dungeons & Dragons, Magic: The Gathering, and Monopoly, as well as the monster hit collaboration with Larian Studios that resulted in Baldur's Gate 3.

What's more impressive is that it happens despite a year Hasbro Inc. (NASDAQ: HAS) and its subsidiary, Wizards of the Coast, being at the center of controversial issues. These include over-monetizing their brands (Dungeons & Dragons and Magic: The Gathering), the Open Gaming License (OGL) leaks that had fans and third-party developers in uproar, price increases of their products, and more.

Bank of America issued a note on Tuesday, raising the "Buy" rating of Hasbro stock from $85 to $90. The actual intraday shares were up 7.3%, from $63.25 to a high of $68.38 between August 21 and 22, resulting in Hasbro being the top S&P 500 performer for that day.

Bank of America Securities analyst Jason Haas gave more insight as to why the Bank of America projections for Hasbro is looking very promising, with a potential upside of 41%, not just for the remainder of 2023, but through the period of 2024 to 2025. The firm highlights the successes of the Dungeons & Dragons, Magic: The Gathering, Monopoly Go! as key talking points.

Thanks to the mainstream success of Baldur's Gate 3, newfound attention to the Dungeons & Dragons brand helped boost Hasbro stock's "Buy" rating from Bank of America analysts.

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.

Overproduction of sets and expansions for Magic: The Gathering downgraded Hasbro stock at the end of 2022. But the overwhelming sales of the Tales of Middle-Earth crossover changed that.

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.

Monopoly Go! is selling like hotcakes, grossing upwards of $200 million on the Apple App Store.

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.

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  1. Hasbro has been killing it in recent years. I can see them making moves to acquire other franchises soon.

Geoff Borgonia

Geoff Borgonia // Articles: 626

Geoffrey "Borgy" Borgonia is a veteran writer, artist, journalist, gamer, and entrepreneur based in the Philippines. When not contributing to some of the top pop culture sites on the planet, he spends the rest of his time running his business, practicing martial arts, working on and developing books, comics, and games. In his man-cave, his only luxury is sleep.
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