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

Given that the company’s shares increased by 7.3%, Hasbro is doing well. Analysts attribute this to the success of games like Dungeons & Dragons, Magic: The Gathering, and Monopoly as well as the hugely successful partnership between Larian Studios and 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)

The fact that it occurs despite Hasbro Inc. (NASDAQ: HAS) and its subsidiary, Wizards of the Coast, being at the center of contentious problems for the past year is even more impressive. These include over-commercializing its brands (such as Dungeons & Dragons and Magic: The Gathering), leaking information about the Open Gaming License (OGL), which infuriated users and third-party developers, raising the price of their goods, and more.

In a report published on Tuesday, Bank of America increased the “Buy” rating for Hasbro shares from $85 to $90. Hasbro was the best-performing stock in the S&P 500 on August 21 and 22, with real intraday shares rising 7.3% from $63.25 to a high of $68.38.

The Bank of America predictions for Hasbro are highly positive, with a potential upside of 41%, not just for the rest of 2023 but also for the years 2024 to 2025, according to Bank of America Securities analyst Jason Haas. The company uses the popularity of Monopoly Go!, Magic: The Gathering, and Dungeons & Dragons as 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.

Hasbro expects royalties from the popular CRPGBaldur’s Gate 3 to be at least $61 million, with unit sales of the game perhaps reaching up to 10 million in its first year. In the meantime, Monopoly Go rose through the ranks on the Apple App Store, bringing in $200 million. The Lord of the Rings crossover helped WotC’s Magic: The Gathering sell a ton of copies. As Haas puts it

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.

The Business Insider report at this link has further information.

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At the end of 2022, Hasbro’s stock was reduced due to the overproduction of Magic: The Gathering sets and expansions. However, the massive success of the Tales of Middle-Earth crossover caused things to change.It should be mentioned that Hasbro’s stock was downgraded by Bank of America from “Buy” to “Underperform” back in November 2022. This resulted from Magic: The Gathering’s excessive manufacturing, which included both its own expansion sets and crossover sets with other well-known IPs. This unfavorable impression was made worse by the vocal opposition from fans and retailers to the 30th Anniversary Magic: the Gathering sets and their exorbitant costs.

In the months that followed, other problems with Wizards of the Coast and its parent corporation Hasbro emerged. Up until WotC backed down and released the license as a Creative Commons, leaks of the intended revisions to the Dungeons & Dragons OGL and SRD (System Reference Document) became the topic of conversation. Another problem was what appeared to be harassment from Pinkertons toward a Magic: The Gathering aficionado.March of the Machine: The Aftermath set leak investigation was taken on by WotC. Additionally, the box office performance of the big screen Dungeons & Dragons: Honor Among Thieves movie was only average.

The popularity of Monopoly Go! has led to revenue of almost $200 million on the Apple App Store.Despite this, consumers are still speaking through their attention and money. And it might not end with Monopoly, D&D, and Magic: The Gathering. As Haas emphasized:

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.

At market closing on August 22, 2023, Hasbro stock was trading at $67.71 with a volume of 4,019,184 shares, according to NASDAQ. At the time of writing, it is still holding at $67.07.

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