Hasbro CEO Cocks and Execs Sued for Alleged Securities Violations

[trappedslider]

But do they refer to their product as collector's items? Do they profit from the increase or decrease of that perceived secondary value? That's part of this. Yes, the elephant in the room is that there is a secondary market where these things are sold for a lot of money. Yes, Hasbro is aware that's happening. But what you're describing is a speculative market, and it doesn't sound to me like Hasbro makes money directly from that market.

Once a box of product is sold, that it as for what money goes into hasbro's pockets.

To put it into D&D terms, if you sell a sword you took off the body of an npc, the guy who sold the sword to the NPC isn't going to see any of that gold from you selling the sword.

 

[Koloth]

But do they refer to their product as collector's items? Do they profit from the increase or decrease of that perceived secondary value? That's part of this. Yes, the elephant in the room is that there is a secondary market where these things are sold for a lot of money. Yes, Hasbro is aware that's happening. But what you're describing is a speculative market, and it doesn't sound to me like Hasbro makes money directly from that market.

The category is referred to a Collectable Card Game.
From the Magic section of the Hasbro website: Arena Direct: Lorwyn Eclipsed Sealed, January 30–February 1
A product listed with Collector Boosters printed on the box.
So yes to the first question.
As to the second question, I don't think Hasbro directly profits from the secondary market. But there is an argument to be made that first sales(Hasbro to distributors/retailers) are driven in part by the secondary market(folks hoping to score big with that special MtG card.) Tank the secondary market and Hasbro's first sales probably take a big hit.

 

[UngainlyTitan]

IME, this seems to be the current corporate culture in general. In the industry I'm in, I see it all the time. Manipulating budget reports and costs to make the immediate quarter look good but is a disaster for long term stability*. Execs don't care because they are only around 1-3 years before getting a golden parachute. So why would they care about long term growth and stability if they can get $30 million dollar bonuses each year for slash and burn, then get $50 million as a going away bonus when it all comes to light?

*For example, just with my own Fortune 500 company, 2/3 of all technology was laid off to make the 4th qtr budget look better to shareholders. Only now there isn't enough people to keep up with production defects in our applications or enhancements that are required by various regulatory changes. So we will end up missing deadlines and then get sanctioned and fined for not being in compliance. But that's a "4th qtr 2026 problem".

It's maddening.

People will perform to the metrics, it is not just modern corporate culture, a lot of enterprises (in the general sense; educational, scientific, as well as commercial) have this problem an insistence on performance metrics and then wondering why things are being done to game the metrics instead of what the enterprise should really be about.

 

[Sacrosanct]

People will perform to the metrics, it is not just modern corporate culture, a lot of enterprises (in the general sense; educational, scientific, as well as commercial) have this problem an insistence on performance metrics and then wondering why things are being done to game the metrics instead of what the enterprise should really be about.

Way back when I was in leadership school in the army (1990s), there was a phrase that stuck: "You get the behavior you reward."

 

[Staffan]

Would Hasbro say they've entered into a social contract regarding the secondary market value of their cards? Like, that sounds very much like a collector's justification for why Hasbro is to blame for prices in the secondary market, but that doesn't make it true.

Wizards of the Coast has had various reprint policies in the past, aimed at providing some protection for secondary market value. Originally, I don't believe they had any such policy, but in the mid-90s after the release of 4th edition and Chronicles, they got a lot of feedback from customers who were angry about devaluing their cards, because they had bought them with the understanding that they'd actually retain value. This lead to the creation of the first reprinting policy, and there may or may not have been legal stuff involved (Mark Rosewater, one of the main influences on Magic and one of their more prominent spokespeople, have said something along the lines of "I can't tell you why we can't make meaningful changes to the reserved list, and I can't tell you why I can't tell you", which sounds like there's some sort of legal settlement involved).

It is somewhat notable that there are some cards (500-something) where there is a promise of not reprinting them, as that would imply that no such guarantee exists about the other bazillion cards. And yet, we can look at the events of mid-2024 to see that a not insubstantial number of people do consider their card collection partially as an investment – maybe not in the sense of "I'm seeing a 3% RoI per year on my card collection", but at least as a rainy day fund. What happened? Well, there is a highly popular casual-ish Magic format called Commander, which is played with 100-card decks that can't have more than any copy of any non-basic land, and where one of the cards is your Commander which can be played from outside the game and imposes some limits on deck construction. This format used to be run by fans, without any direct control from Wizards – Wizards did print cards designed for the format, but didn't officially control legality and such. Anyhow, in September 2024 the people who did run the format decided to ban four cards... and people went apepoop. One of the cards had been pretty much expected on account of having been overpowered and a nuisance, but the other three cards were all highly valuable cards that were pretty powerful. Some people went so far as accusing the rules committee (the people deciding on the ban) of "insider" trading, or even sending death threats. The end result was that the rules committee handed the format over to Wizards who now control it directly (but with input from a panel of fans).

Anyhow, that was a long-winded way of saying that while Wizards no longer makes any promises about the value of their cards, there are definitely a fair number of players/collectors who care about it.

 

[Olgar Shiverstone]

As to the second question, I don't think Hasbro directly profits from the secondary market. But there is an argument to be made that first sales(Hasbro to distributors/retailers) are driven in part by the secondary market(folks hoping to score big with that special MtG card.) Tank the secondary market and Hasbro's first sales probably take a big hit.

It's kind of a bizarre thing for me because this same argument is going around right now for the CCG that I do play, Star Wars Unlimited, with players complaining that the "value" of a booster box is less than what they pay, and stores complaining that they have to deeply discount what they have for sale to move product as a result, with many players advocating for more high rarity/high powered cards in sets to encourage "chase" buying. As someone who just plays the game to play, and hates the feeling that a tool I need to play the game is locked behind a paywall, it's frustrating that people trying to look at playing cards as in investment as reducing my ability to play and enjoy the game.

The two markets are clearly linked; that they are I think says we've lot the plot. But MTG has been around for more than 30 years -- I'm either deeply wrong, or there's a crash coming.

Sadly if there's an MTG crash, D&D probably gets wiped out. Thank goodness for the SRD and all those books sitting on my shelf.

 

[MGibster]

Would you, as a consumer, buy a new set at 100$ if the last one was firesold off at 50$ due to overprinting?
Would you, as a distributor, order a bigger allocation of new cards if the last shipment sold poorly?
Where do consumers go when local game stores go under on unsold inventory?

Even if they don't make money off of secondary sales, it affects their pricing power and future revenue.

I can't help but look at your three points and wonder what that has to do with the secondary market. Maybe I have the wrong idea of what makes up the secondary market because what you describe above is what I think of as the regular market. The producer sells the packaged cards to the distributor, the distributor sells to the retailer, and the retailer sells to the consumer. If my retail store is selling individual cards or I'm selling my individual cards, that's part of the secondary market.

 

[TiQuinn]

Wizards of the Coast has had various reprint policies in the past, aimed at providing some protection for secondary market value. Originally, I don't believe they had any such policy, but in the mid-90s after the release of 4th edition and Chronicles, they got a lot of feedback from customers who were angry about devaluing their cards, because they had bought them with the understanding that they'd actually retain value. This lead to the creation of the first reprinting policy, and there may or may not have been legal stuff involved (Mark Rosewater, one of the main influences on Magic and one of their more prominent spokespeople, have said something along the lines of "I can't tell you why we can't make meaningful changes to the reserved list, and I can't tell you why I can't tell you", which sounds like there's some sort of legal settlement involved).

It is somewhat notable that there are some cards (500-something) where there is a promise of not reprinting them, as that would imply that no such guarantee exists about the other bazillion cards. And yet, we can look at the events of mid-2024 to see that a not insubstantial number of people do consider their card collection partially as an investment – maybe not in the sense of "I'm seeing a 3% RoI per year on my card collection", but at least as a rainy day fund. What happened? Well, there is a highly popular casual-ish Magic format called Commander, which is played with 100-card decks that can't have more than any copy of any non-basic land, and where one of the cards is your Commander which can be played from outside the game and imposes some limits on deck construction. This format used to be run by fans, without any direct control from Wizards – Wizards did print cards designed for the format, but didn't officially control legality and such. Anyhow, in September 2024 the people who did run the format decided to ban four cards... and people went apepoop. One of the cards had been pretty much expected on account of having been overpowered and a nuisance, but the other three cards were all highly valuable cards that were pretty powerful. Some people went so far as accusing the rules committee (the people deciding on the ban) of "insider" trading, or even sending death threats. The end result was that the rules committee handed the format over to Wizards who now control it directly (but with input from a panel of fans).

Anyhow, that was a long-winded way of saying that while Wizards no longer makes any promises about the value of their cards, there are definitely a fair number of players/collectors who care about it.

THAT is some crazy stuff! Dang!

 

[Scribe]

So, the secondary market clearly matters, Wizards clearly tracked it, and when it was being managed responsibly Wizards would sprinkle reprints into Standard to manage both card prices, and packs and boxes being sold to chase those value reprints.

This system was sustainable, drove people to shops to Crack packs AND kept the cost of Standard down by nature of bulk sales.

Wizards knew all this, still does. However short term greed, has throw all kinds of intelligent management of the secondary market, game power level, and formats, completely out the window.

 

[Cergorach]

I think that's a lot of tilting at windmills unless the folks doing the suing are people with deep pockets like a Carl Icahn-type individual to be able to prove that executive bonuses and stock sales are evidence of wrongdoing.

Don't forget that there are folks with tens of millions in just MtG assets, besides their other assets. There have been other 'shareholders' that were fans first and business people second that made a $#!& storm a while ago, they failed, these folks might fail as well, but they might win. Stranger Things have happened...