There are many great hobbies out there. For those who enjoy a combination of strategic and creative thinking (like yours truly), Magic: The Gathering (or just Magic, for short) is one of them. This trading card game has an immense global following thanks to its rich gameplay and art. And for $10.5bn-market-cap Hasbro, Magic is the driving force behind Wizards of the Coast, by far the best-performing business in the group.
With the share price up 34% year to date, Hasbro has outperformed many names on the market. It’s smashed toy maker and sector peer Mattel, which is down 2% for the year. And if you look around and consider birth-rate trends, you’ll probably conclude that being invested in a pure-play children’s toy maker (pun shamelessly intended) isn’t the best idea.
Hasbro’s strategic plan is called Playing to Win. It doesn’t specify the age of the players, though, which is exactly the point. The Magic player base ranges from late primary school (when I first started playing) to adults, with the secret sauce being that the game can be played in ways that range from fairly simple to incredibly complex. The average age of a tabletop player, according to Hasbro, is 35.
Here’s how the business model works: every couple of months, a new set of collectable cards is released. Some people genuinely just love collecting the cards, without much regard for gameplay. Hasbro makes a fortune off these players by doing collaborations with other intellectual property (IP) universes like The Lord of the Rings or the latest example, Final Fantasy. And for the truly afflicted, there are special-edition cards sold through the Secret Lair — a direct-to-consumer channel akin to how Ferrari sells highly personalised cars to its most devout customers (at a high margin, of course).
The average age of a tabletop player, according to Hasbro, is 35
For others (like me), it’s far more about the gameplay and strategy. This means hunting down only a handful of cards each time a set is released, often at a higher value per card. Hasbro doesn’t directly benefit from the secondary market (where players trade among themselves), but it does benefit from being able to sell sealed packs into the primary market at a higher initial price based on the strong expected value in the secondary market.
The growth flywheels are spinning quickly. There was a 40% increase in the number of unique competitive players in the first half of 2025, with almost 9,000 locations globally offering a place to play (and to meet other players). The importance of the community element of this business cannot be overstated. While some primarily enjoy the competitive gameplay, others are there for the diverse and inclusive community and the ability to meet people with similar interests.
It’s little wonder, then, that most of the prepared remarks in Hasbro’s latest earnings transcript were reserved for Magic, with the CEO dedicating just a couple of paragraphs to the consumer products division that includes brands like Play-Doh and Peppa Pig — IP that should be worth a fortune, if only there were more small humans running around in the world.
Just how critical is this trend of focusing on adult hobbies and play vs toys for children? In the latest quarter, revenue in the Wizards of the Coast and digital gaming segment was up 16%, with Magic up 23%. In stark contrast, consumer products (the toys) fell by 16%, with Hasbro laying the blame at the door of retailer order timing, tariff uncertainty and “market softness” in specific areas. The management team isn’t exactly about to point out that there’s a structural demand problem in that market — but the rapidly declining number of maternity cases tells you exactly what the issue will be for Hasbro in the years to come.
Luckily for Hasbro, the world is shifting towards its lucrative business rather than away from it. Full-year revenue growth for Wizards of the Coast is expected to be in the high 20% range, with an operating margin of 42%-43%. Consumer products, by comparison, is expected to suffer a revenue decline of 5%-8%, with an adjusted operating margin of just 4%-6%.
Unsurprisingly, a combination of owned IP and a low unit cost of production (these are just cardboard cards, after all) is far more profitable than creating moulds and jumping through health and safety hoops to manufacture products for children — especially when there just aren’t enough children out there to drive demand. These days, adult hobbies are where the real money is.
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