In November, analysts at Bank of America issued a rare double downgrade on Hasbro’s stock, claiming that the gaming giant was “destroying the long-term value” of its shares. Magic: The Gathering branding using overprint cards. On Thursday, CEO Chris Cocks and Wizards of the Coast President Cynthia W. Williams strongly rejected those claims. The executives spent nearly 45 minutes during a “fireside chat” publicly defending their strategy, while at the same time revealing important details about the future of the collectible card game and its sibling, the iconic role-playing game Dungeons & Dragons.
The presentation, which is archived online, began with a detailed look at the Magic player base Then, around 25 minutes in, host Arpiné Kocharyan, an analyst at UBS, got down to business.
“There’s been this claim that you’re printing too many cards,” Kocharyan asked. “What’s your one sentence answer to that?” Williams began by explaining that major releases are not produced on a limited basis. Instead, the company uses a “print-on-demand” model, whereby Hasbro pushes more cards into the sales pipeline after their initial release when retailers demand more. Williams continued:
Our average post-launch sales amounts for our blockbuster debut sets were flat in 2022 compared to 2021. Taken together, there is no evidence that Magic is superimposed, and the sentiment of “Magic you need to reduce print runs to support prices”, that is a misunderstanding of our business and our customers. If our prices for a potential product increase significantly soon after our release, that simply means we are not adequately meeting customer demand and making millions of players unhappy with their lack of ability to acquire the card they want to play. .
Williams later lobbied against another claim, this one coming more recently from vocal members of the Magic online community, meaning that falling prices on the secondary market is evidence that Hasbro is releasing too many card games each year. William’s response:
We understand that some players focus on the collectible commercial aspects of our product, and we are always delighted to see players enjoy and value our products for years after the initial release. But we do not participate in secondary market activity for Magic products, nor do we earn any income from trading or selling. What we hear from some of our [Wizard’s Play Network-affiliated local game] stores that trade and sell cards after an initial sale, is that, like any marketplace for any other collectible product, some individual products and cards become more collectible than others, and values can change over time due to a multitude of factors external, many completely unrelated to the number of cards printed. We have no indication that there is [have] there have been large negative swings in interest in post-purchase trading or selling Magic products
Williams and Cocks also spoke openly about the fan response to the recently released Magic: The Gathering 30th Anniversary Edition. The announcement of the nearly $1,000 box set of four 15-card booster packs angered many longtime players because it included reprints of incredibly rare cards, including the legendary Black Lotus. Williams said Hasbro heard those comments loud and clear, and responded in kind by releasing fewer of those games. In the meantime, MagicThe Warhammer 40,000 card game Warhammer 40,000, part of its burgeoning Universes Beyond initiative, is now in its third edition, and Hasbro is making as many of those cards as possible to keep up with consumer demand.
“Magic it will be our first billion-dollar mark this year,” Williams said. “We are growing that brand ahead of the industry and pushing the boundaries of where we can take the product. Most of the time, we get it right […] and sometimes we take a step back and listen to customer feedback.”
Williams went on to say that fans should expect six blockbuster releases in 2023, just like in 2022. However, those releases will be spread more evenly throughout the year.
“In the second half of 2022 we had a very compressed launch schedule that was driven in part by supply chain issues,” Williams said. “But in 2023, we’ll be back to our preferred release cadence of about two months in between our blockbuster sets, with individual micro-sets sprinkled in between.”
die-hard fans of Magic should also expect more crossover with no-Magic intellectual properties, such as The Lord of the Rings and Doctor Who. The executives said that in the future, these types of collaborations will become the primary method of onboarding new players.
So what does all this have to do with D&D? Williams said that many of the growth factors that have led to the success of Magic it will apply to D&D as well, especially when it comes to digital content. MagicIt’s biggest area of growth, executives said, is in the digital space. The so-called “hybrid players”, that is, players who play Magic both with physical cards and online using Magic: The Gathering Arena — spend 40% more than others Magic players. The goal, therefore, is to open up similar opportunities for players to spend money through the newly acquired D&D Beyond digital toolset.
“Dungeon Masters […] they only make up about 20% of the audience, but they are the bulk of our paying players [today]said Williams, who previously worked at Microsoft as general manager and vice president of its Gaming Ecosystem Business Team. “For the rest of the players at the table, we believe that digital will allow us to offer many more options to create a rewarding experience.”
You don’t have to try too hard to read between the lines in this case. Hasbro is already getting customers used to downloading digital content through D&D Beyond with free stuff right now, like this holiday season’s digital advent calendar. Players should expect more microtransactions in D&D Beyond throughout 2023.
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