Modern Horizons 3 was the fastest-selling Magic: The Gathering set of all time in the first weeks of release, leading Hasbro CEO Chris Cocks to note the comparison to the Lord of the Rings set in the conference call. “We expect Modern Horizons 3 to, if not be our best-selling set of all time (which is currently held by Lord of the Rings), to certainly be a contender for it,” he said in the Hasbro conference call last week. Sales of Modern Horizons 3 in Q2 2024 were higher than sales of Lord of the Rings in the same quarter last year.
The sales patterns will be very different between the two sets, Cocks pointed out. The Modern Horizons 2 set had a very long tail, with continuing sales for 30 months after release, while the Lord of the Rings set had a big surge when first released, and then again in December with the release of additional product. Sales of Modern Horizons 3 in Q4 this year will likely lag sales on Lord of the Rings in Q4 last year, but over time, Modern Horizon 3 sales are expected to approach or pass sales of the Lord of the Rings set.
Tabletop game sales were up 3% in the Wizards of the Coast and Digital Gaming segment, from $298.5 million in 2023 to $307.6 million in Q2 this year. The increase was attributed to Magic: The Gathering; Dungeons & Dragons sales were not characterized.
Digital sales continue to be on fire, up 87% from $77.1 million in Q2 2023 to $144.4 million in Q2 this year, primarily behind Monopoly Go!, and to a lesser extent, Baldur’s Gate 3.
Magic: The Gathering sales, including both tabletop and digital, were up $8%, to $336.0 million from $311.0 million in Q2 last year.
Overall sales in the Wizards of the Coast and Digital Gaming segment were up 20%, Hasbro reported, with the high growth driven by digital and an international publishing deal. That’s a substantial improvement over a good quarter in Q1, when sales were up 7% (see “Tabletop Game Sales Up“).
WotC was extremely profitable, with a 54.7% operating margin, up nearly 17 points from last year, driven by increases in higher-margin digital sales, supply chain productivity gains, and lower royalty payments due to the comparison with the Lord of the Rings quarter last year. WotC’s operating profit in Q2 was $247.1 million, up from $142.3 million in the year ago quarter.
Hasbro upped its guidance for WotC; it now expects a sales decline of 1-3% for the year, improved from the old guidance of a 3-5% decline, due to the better-than-expected digital sales.
Pre-orders for the new Dungeons & Dragons core books are running ahead of expectations, Cocks said in the conference call, while revealing that digital revenues are over half the sales for the brand due to the success of D&D Beyond, which now has over 18 million registered users.
As has been the case in recent years, the Wizards of the Coast and Digital Gaming segment had to carry the whole company. Overall Hasbro sales were down 18%, with the sale of the eOne division a big reason. Excluding the declines due to the divestiture, sales were down 6% overall. Consumer products (primarily toys) were down 20%.
Overall Hasbro revenues were $995.3 million in Q2 2024, down from $1,210.0 million in Q2 last year. It earned $138.5 million, a big improvement from the $234.9 million loss in the same quarter last year (see “WotC and Digital Gaming Down“).
Source: ICV2
