Hasbro's Wizards of the Coast, which publishes Magic: The Gathering and Dungeons & Dragons, and Digital Gaming segment showed growth of ten percent in 2023 even as the company itself saw a revenue decline of 15 percent according to the company's full year financial results for 2023.
The company's operating loss of $1.539 million includes $1.3 billion of non-cash goodwill and intangible asset impairment charges associated with eOne film and TV, which Hasbro sold off to Lionsgate in December of 2023.
"2023 was a productive year for Hasbro, although not without some challenges." said Gina Goetter, Hasbro chief financial officer. “As we navigated the current environment, we took aggressive steps to optimize our inventory, reset the cost structure, and sharpen our portfolio focus on play with the eOne film and TV divestiture. Taken together, the actions throughout the full year have positioned the company for improved financial performance in 2024 and beyond. We are encouraged by our recent progress and remain laser focused on execution to deliver on our transformation objectives.”
Specific to the Wizards of the Coast and Digital Gaming segment, the revenue increase of 10% was driven by increase in licensed digital gaming revenue behind Baldur's Gate III from Larian Studios and Monopoly Go! from Scopely. Tabletop revenue only increased by one percent behind growth in Magic: The Gathering despite a reported strong performance by the The Lord of the Rings: Tales of Middle-earth Universes Beyond sets. Despite these gains, Hasbro reported an operating profit decline of two percent and an operating profit margin of 36.1 percent due to higher royalty costs associated with Universes Beyond.
In the fourth quarter of 2023 alone, Hasbro reported a revenue decline of 23 percent despite a seven percent growth in the Wizards of the Coast and Digital Gaming segment.
“Guided by our strategy of “Fewer, Bigger, Better,” we had important wins across both toys and games while making progress in our transformation during a challenging 2023. Despite the macroeconomic backdrop, we are entering 2024 with a healthier balance sheet, a leaner cost structure, and a diverse portfolio of industry-leading toy and game brands that support our capacity to invest in the business and maintain our commitment to returning cash to shareholders via our category-leading dividend,” said Chris Cocks, Hasbro chief executive officer. “Our refreshed leadership team is bringing innovative new products to our fans. At the same time, we are taking the necessary actions to transform Hasbro and deliver long-term profitable growth starting with driving significant profit growth across our segments in 2024 and building momentum in our innovation pipeline between now and 2025.”
Looking ahead to 2024, Hasbro expects Wizards of the Coast's revenue to be down between three and five percent due in large to second half comp in licensed digital gaming.
