On July 19th, Chris Cocks led the Q2 Earnings Management Conference Call to discuss how this financial quarter went. With it, were many pieces of very interesting information that I’ll quickly sum up. If you want to read the whole call, there will be a link at the bottom of the article!
This Was Magic’s Most Profitable Quarter
Easily the biggest piece of news from the call, Wizards had it’s biggest quarter ever in Q2, beating out last year’s Q2. To add to that, tabletop revenues grew 15% overall (this is for all Wizards products). Magic, in particular, has 11% revenue gains and is 10% up from last year same time. Chris Cocks forecasts that Magic will continue to grow within a range of “high single digit or low double digits” year to year. Even more amazing, for the first time in history, every major Magic set eclipsed $100 million in sales.
Magic: Arena Is Coming To Steam And Major Consoles
Another huge piece of news from the call is that Magic Arena will be expanding the platforms that it’s on! Arena should be on Steam before the year is out, and sometime in 2023, Arena will be playable on “major consoles”, so presumably, the Nintendo Switch, the Xbox Series X/S, and the PS5.
Supply Chain Issues Shouldn’t Be As Much Of An Issue
Earlier this year (and for some future products) there were a good amount of product delays as the supply chain crisis continues on. However, Chris Cocks is more optimistic about circumventing supply chain issues for the remainder of the year through “innovative new initiatives”. For example, retailers increased Direct Imports by $60 million to help proactively mitigate supply chain issues and ensure that they can meet demand.
Price Increases Still Happening And Will Be Reflected In Future Quarters
From Deb Thomas’s (Hasbro’s CFO) portion of the address, we see that the price increases we’ve seen on select Magic products have yet to be reflected in their quarterly earnings. Deb reiterates that they’ve been very proactive in helping mitigate supply chain issues, but still face much higher product and freight costs. Deb Thomas notes that “…we are beginning to see a reduction in port congestion
delays and lead times have come down, although they remain 2 times higher than historical levels.” Deb continues that this price increase to the Magic products helped somewhat offset the higher shipping costs and will continue to do so in the next few quarters.
Even with Covid affecting tabletop play and a supply chain crisis, Magic is clearly still stronger than ever. With higher revenues and only more growth expected to come, it seems that Magic has a long and bright future ahead of it.
If you want to read the whole transcript, you may do so here.