Sales by Hasbro’s Wizards of the Coast and Digital Gaming segment were up but profits were down in Q1, Hasbro reported in its Q1 earnings release. Sales for the segment were up 12%, from $262.8 million in Q1 2022 to $295.2 million in Q1 2023. The increase was led by tabletop games, which were up 13% to $217.9 million from $192.2 million in the year ago period; digital and licensed gaming were 9%.
Operating profits for the segment were down 28%, from $106.4 million in Q1 2022 to $76.8 this year, a decline the company attributed to investments in product development and personnel, higher product cost, advertising expense, and costs supporting the return of organized play. Hasbro’s non-WotC games, such as Monopoly, continued their declines in Q1, dragging the growth rate for Hasbro Total Gaming, which includes both the WotC and non-WotC brands, down to 2%. The decline in non-WotC games was driven by mass retailers’ efforts to reduce inventory, which had ballooned during Covid.
Within Wizards of the Coast, Magic: The Gathering was up 16%, from $197.2 million in Q1 2022 to $229.1 million in 2023, behind a strong response to the release of Phyrexia: All Will Be One, as well as robust catalog sales of previously released sets, the company said. Two sets were called out in particular: Modern Horizons 2 has become the first $200 million set, and Universes Beyond Warhammer 40,000 Is now in its fourth printing. The company also noted strong pre-orders for Universes Beyond: The Lord of the Rings.
Overall, Hasbro struggled in Q1, although beating expectations. Sales were down 14% to $1,001.0 million, from $1,163.1 million in Q1 2022. The company showed a net loss of $22.1 million, a flip from a $61.2 million profit in the year ago period. Some $15.8 million of the loss was due to unfavorable foreign currency movements.
Hasbro’s C-suite is getting a shake-up, as CEO Chris Cocks (who previously ran Wizards of the Coast) settles into his second year in the post. Longtime CFO Deborah Thomas will be retiring on May 18 after 25 years at Hasbro, and will be replaced by Harley-Davidson CFO Gina Goetter. Tim Kilpin, who held top executive positions at PlayMonster, Activision Blizzard, and Mattel, is the new President of Toy, Licensing, and Entertainment; Riot Games Chief Marketing Officer Jason Bunge has joined Hasbro in the same role; and former Meta executive Bertie Thompson is the new Chief Communications Officer.