I didn't hear anything in this that makes me change my belief that most game stores couldn't afford the loss of D&D merch.
Is Magic bigger for WotC? Maybe.
There's no "maybe." It isn't close. On some stockholder reports D&D barely rates a mention, just being lumped in with WotC, whereas MtG is a pillar not just of WotC but of Hasbro. It's just a much, much more profitable game.
But does that translate into more profit for game store? I don't know that. I don't know what the reseller profit margins are for D&D and Magic.
We have game store owners who post here; presumably they can share.
I know that at my local stores, MtG is not just important for sales of boosters and so on, but probably more so for the aftermarket. It also brings players in - there are always games going. Then there are board games, and the all important Games Workshop section. D&D and TTRPG stuff is significant as well, but not on the same scale. And that's setting aside that we also have an entire Games Workshop store here in Victoria.
Given that we know that MtG sales were recently reported as about quintuple D&D sales, we can reasonably assume that it is also responsible for a similarly large share of sales in the average game shop. And that's not even factoring aftermarket sales.
This is a tangent, but I also believe that D&D has a halo effect that draws people to other RPG products and games. Just like Apple has said about Mac sales. Mac sales fuel a lot of their other product sales, which I feel is very likely similar for D&D. D&D powers a lot of other fantasy RPG and collectible card game sales. It keeps fantasy at the forefront of pop culture with video games and movies. Other games constantly benefit from that.
I'm somewhat skeptical here - there are a lot of variables. I think Tolkien and Harry Potter have probably done a lot more to mainstream fantasy, though D&D is important. And it was MtG that
saved D&D when TSR went bust.
But back to Apple for second. Why doesn't Apple drop Mac computer sales? After all, they sell about $30 billion/year on the Mac side but $200 billion/year in iPhones. Why not just focus on iPhones and stop making Macs? Answer: because money is money and they want all of it. D&D is still profitable, even if we assume MtG makes more.
We
know MtG makes a LOT more - around five times as much. Those are publically reported numbers with legal consequences - you can't fib on shareholder reports. But, yes, D&D certainly seems to be profitable, and its value to Hasbro has certainly grown from 2014, when it was basically an afterthought. However, it's ultimately not a superstar earner because, as Hasbro has complained, it's difficult to monetize. Ultimately, most of those sales are books, which is a notoriously thin market. Thus their repeated attempts to diversify the D&D brand, with mixed results.