Annual Report 2022
“It is a privilege to lead this organization. Hasbro has tremendous assets including an unparalleled brand portfolio; industry-leading expertise in growing, highly profitable categories including gaming; and a talented team of experienced professionals across toys, games, licensing and entertainment. As we celebrate our 100th year as a company, there is much to be proud of and even more to look forward to as we begin our next century of bringing joy and wonder through the power of play.”
Refreshed and Modernized Strategy
Blueprint 2.0 is the next evolution of our strategy
Blueprint 2.0 builds on the brand-oriented focus we executed over the past decade. It puts the consumer at the center of our strategy while we build discipline around data-driven decision making. Importantly, we are reestablishing play as the grounding principal for everything we do.
Brand Insights Platform
Bigger Better brand focus
We will leverage Hasbro’s iconic brand portfolio to entertain and connect generation of fans through games, play and experiences in five focus categories where we have or can have a leadership position: Actions Figures & Accessories; Arts & Crafts; Games; Outdoor & Sports; and Preschool Toys.
Strategic Growth Initiatives
For our franchise brands, licensing represents an exciting, high profit growth opportunity to expand our brands reach and engagement potential.
We have an opportunity to work with partner companies to license out non-strategic properties, drive higher profits and keep these brands active and growing with consumers for future opportunities.
Brands Moving to Out-Licensed Model beginning in 2024:
We are expanding Hasbro’s Gaming Leadership across tabletop and digital, including the industry’s biggest games brands: MAGIC: THE GATHERING, DUNGEONS & DRAGONS, MONOPOLY and the entire Hasbro Gaming portfolio. Digital gaming is a growth investment area for Hasbro, led by the team at Wizards of the Coast and through licensed partnerships. At ~$2B in revenue and better than 30% operating profit margins, games are a key area of focus and investment for the company.
Direct to Consumer
We will invest to build direct relationships with fans by leaning into our unique fan experiences including Hasbro Pulse, D&D Beyond, Secret Lair and Magic: The Gathering Arena. We purchased D&D Beyond in May 2022. It is a highly strategic asset and the fastest growing distribution vehicle for D&D. It is rapidly becoming a key tool in how our fans role play together and is a fantastic engagement platform. In just over 6 months, we’ve already added over 2 million registered players from the time of the acquisition to year-end 2022, a 20% increase.
2022 Progress Despite Disappointing Results
2022 financial results, including a consumer slowdown in the fourth quarter, were a disappointment. Importantly we made sustainable progress that meaningfully improved our bottom line and sets us up for margin expansion in 2023 even with what we anticipate will be a continued challenging consumer environment.
Magic: the Gathering
MAGIC: THE GATHERING crossed the $1 billion threshold in 2022, growing 7% to $1.065 billion. In topping the billion-dollar mark, MAGIC has grown at a 14% CAGR over the last 10 years.
This is a huge milestone, not just for Hasbro but for the thousands of hobby stores, our most important and fastest growing channel for the brand, and millions of fans who make both MAGIC and D&D more than just games, but vibrant global communities.
The driver of MAGIC remains tabletop gaming. Each tent pole set release through the first three quarters of 2022 crossed $100 million in revenue for the first time and the fourth quarter release, The Brothers War, is on track to do so in 2023. Warhammer 40K Universes Beyond Commander deck was reprinted three times to meet robust player demand. We also have over 10M registered digital players with Magic Arena, and in the past few years our fastest-growing category of MAGIC player are the hybrid players who play on digital and tabletop. This group tends to have the highest satisfaction rates and the highest level of spending at 40% over the average revenue per MAGIC player across all expressions.
If you aren’t familiar with the game, MAGIC was created in 1993 and is the world’s first trading card game. It has been played by over 50 million players to date globally. The gameplay is highly strategic and customizable to any individual’s playstyle. Players take turns doing battle against each other by casting spells, summoning creatures and using artifacts depicted on individual cards drawn from their personalized deck.
Multiple times per year we survey tens of thousands of MAGIC fans on a variety of topics related to the game. The MAGIC active tabletop player on average is 30 years old, with players ranging from 13 to over 45 years old. One third have less than 3 years’ experience with the game, another third has up to 10 years of history with the game, and the final third have MAGIC engagement spanning more than a decade.
We’ve seen growth in casual players, who we estimate represents 80% of the player base and the competitive player represents the remaining. This one insight alone has led to a major rethinking of our offering and how to serve our growing and more diverse player base.
After several years of Covid shutdowns, players are “gathering” again. In October 2022, we organized the largest in-person event in MAGIC’s history with over 10,000 players gathering in Las Vegas to kick-off our 30th Anniversary Celebration. We have four additional events planned for 2023 in the U.S. and Europe.
Our surveys show that our Net Promoter Score globally has increased to the highest it’s been in the past 3 years… and we are committed to bringing the best game possible to our players around the world.
Our Purpose in Practice
At Hasbro, we are privileged to create products and experiences that bring joy and spark human connectivity across generations, cultures and lifetimes. Our Purpose motivates our employees, engages our consumers, and positively impacts the communities in which we operate. We believe strong Environmental, Social and Governance (ESG) performance drives long-term value for our business and stakeholders.