So as an adult with a small child, I have some biased here. These observations are just from my perspective, and I welcome discussion. The TLDR is that Hasbro is ready for a sharp decline in which the company shows no signs of recovering.
My argument is that both arms of the company are in for a deep decline, likely due to improper monetization. As a toy company, the number one thing your toys need to be is fun. Hasbro lags in consumer trends and focuses primarily on physical entertainment (toys, cards, books) rather than virtual (video, media, etc.). The effects of a post covid environment, cheap electronics, and poor decision-making will cause the company to contract.
Physical Toys and dolls are the first half of their revenue stream. The two major carriers seem to be Nerf guns and dolls/action figures. Currently, there is an excess of unsold inventory. This leads to an increase in price for sold inventory to make up for the difference. This shows that Hasbro toys are both falling out of trend and becoming uncompetitive. https://www.wsj.com/articles/hasbro-has-q3-earnings-report-2022-11666105768.
In perhaps one of the biggest letdowns to my inner child, Toys R' Us closed its stores. I can't help but notice that one of the major reasons we didn't go there was that we could download new entertainment. I can't help but notice a trend for digital copies of products. Roblox and Minecraft seem to be replacing lego. Although there was an uptick with the covid baby boom, the secondhand market is now flooded as parents give hand-me-down toys to their second children. https://www.prnewswire.com/news-releases/us-toy–game-sales-to-drop-15-in-2022-301599442.html
Wizards of the Coast represents the other 50% of their revenue stream. The two major flagship products are a card game Magic the Gathering, and a Tabletop RPG game Dungeons & Dragons. Recently many MTG players have voiced concern about the recent state of the game. This article from Gizmodo explains the situation pretty well. https://www.polygon.com/23458064/magic-the-gathering-overprinting-hasbro-stock-downgrade.
The other issue is DnD. WOTC has decided to change its gaming license. The original license writers are taking legal action to prevent the old license from being overwritten. They seem to have a fairly straightforward legal case. https://t.co/uQNKiz0wzv?fbclid=IwAR0yub1o9Hb7jujwqFC0WrHvvFsPxaiKgRCUrbVHUr1Eff5-lDZxWTRBc1A
Even if they do not, the proposed changes to the OGL are already affecting cash streams and leading to a mass exodus to other gaming systems. The TTRPG industry's dissatisfaction with WTOC has been building due to the declining quality of their released content. I have felt this and am starting to look at my bookshelf without the same rosy affection I used to.
Anyway, those are my thoughts. Please let me know what you all think in the comments below.
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