WotC Wizards Q1 2023 revenue up 12%

[mamba]

Anyone savvy enough to pick through the numbers and figure out how much licensing impacted their revenue? We're seeing more and more licensed products, I'm curious how much money that's bringing in for them.

you cannot even tell how much D&D contributes, they were always rather vague

 

[mamba]

It rather puts the late unpleasantness in perspective.

if you look at overall gaming, it grew by 2%. Since a large part of that is MtG which grew by 16%, the rest actually shrank. Given their relative sizes, by about 15%.

$ Millions	Q1 2023		Q1 2022		% Change
MAGIC: THE GATHERING	$	229.1		$	197.2		16	%
Hasbro Total Gaming1		386.5			378.8		2

1Hasbro’s Total Gaming Category includes all gaming revenue, most notably MAGIC: THE GATHERING, Hasbro Gaming and DUNGEONS & DRAGONS.

Later on we find WotC + Digital Gaming

Wizards of the Coast and Digital Gaming

$

295.2

$

262.8

12

%

If you subtract the MtG part, this is 66.1 this quarter and 65.6 last year. So essentially flat. How much is digital vs D&D, we do not know. With digital growing by 9% D&D should at best have had no growth but probably shrank a little.

 

[Sparky McDibben]

Hi! Financial analyst here, specializing in corporate and management reporting. The comparison to prior year is interesting, because typically you ground these communications against expectations. Prior year comparisons usually get trotted out when you aren't meeting budget. We don't know WotC's expectations for this quarter. If they budgeted growth of 25%, then only hitting 13% is terrible news. Just something to keep in mind.

 

[bedir than]

Hi! Financial analyst here, specializing in corporate and management reporting. The comparison to prior year is interesting, because typically you ground these communications against expectations. Prior year comparisons usually get trotted out when you aren't meeting budget. We don't know WotC's expectations for this quarter. If they budgeted growth of 25%, then only hitting 13% is terrible news. Just something to keep in mind.

They exceeded analyst expectations, which is why the stock went up despite profits going down.

 

[bedir than]

if you look at overall gaming, it grew by 2%. Since a large part of that is MtG which grew by 16%, the rest actually shrank. Given their relative sizes, by about 15%.

$ Millions	Q1 2023		Q1 2022		% Change
MAGIC: THE GATHERING	$	229.1		$	197.2		16	%
Hasbro Total Gaming1		386.5			378.8		2

1Hasbro’s Total Gaming Category includes all gaming revenue, most notably MAGIC: THE GATHERING, Hasbro Gaming and DUNGEONS & DRAGONS.

Later on we find WotC + Digital Gaming

Wizards of the Coast and Digital Gaming

$

295.2

$

262.8

12

%

If you subtract the MtG part, this is 66.1 this quarter and 65.6 last year. So essentially flat. How much is digital vs D&D, we do not know. With digital growing by 9% D&D should at best have had no growth but probably shrank a little.

D&D products were asked about in the Q&A. Hoffer says that D&D was up 13%

 

[Parmandur]

Hi! Financial analyst here, specializing in corporate and management reporting. The comparison to prior year is interesting, because typically you ground these communications against expectations. Prior year comparisons usually get trotted out when you aren't meeting budget. We don't know WotC's expectations for this quarter. If they budgeted growth of 25%, then only hitting 13% is terrible news. Just something to keep in mind.

This was for Hasbro in general, and Hasbro had a pretty bad year other than WotC.

 

[TheSword]

Hi! Financial analyst here, specializing in corporate and management reporting. The comparison to prior year is interesting, because typically you ground these communications against expectations. Prior year comparisons usually get trotted out when you aren't meeting budget. We don't know WotC's expectations for this quarter. If they budgeted growth of 25%, then only hitting 13% is terrible news. Just something to keep in mind.

If WotC are budgeting growth of 25% YOY in a quarter without significant changes then I’d say they’re either extremely optimistic or used to doing extremely well.

I suspect they don’t talk about position against budget because that doesn’t mean much to the public in general. YOY is concrete.

 

[mamba]

D&D products were asked about in the Q&A. Hoffer says that D&D was up 13%

This quite literally does not add up when looking at their numbers, unless WotC has something other than MtG and D&D that lost a lot of sales / was discontinued. Nothing comes to mind though

EDIT: they do say it grew 13% though, go figure...

"Tabletop gaming revenue increased 13%. Digital and licensed gaming revenue increased 9%, bolstered by the addition of D&D Beyond."

 

[LuisCarlos17f]

Some time in the past I said the economy in this year 2023 will be different, and then the companies should get ready for the worst case. The main goal should be the survival.

D&D is a brand what is earning power. If Hasbro has to talk with other companies about collabs, licence, crossovers, or maybe a future merger or acquisition, then D&D is becoming one of the best cards in the tabletop.

 

[FitzTheRuke]

Book sales are definitely down. If I had to guess, I'd say that most of that is due to licensing deals made for merchandising for the film.

 

[bedir than]

Book sales are definitely down. If I had to guess, I'd say that most of that is due to licensing deals made for merchandising for the film.

Except that they said the exact opposite to their investors


Unless your suggestion is that licensed goods for the movie released four days before the quarter ended outsold physical books by such an extent that the Hasbro share of those goods earned them double digit growth, again in four days?

 

[LuisCarlos17f]

We should agree Hasbro strategy is making money with the multimedia franchises, from different sources: comics, toys, videogames...

Hasbro wanted to become a media empire, but after the death of the former CEO the changed the plan. Now they are focused into the digital market.

 

[Sparky McDibben]

They exceeded analyst expectations, which is why the stock went up despite profits going down.

It's up less than a dollar from yesterday's close, which is peanuts. My point, though, was that WotC is not measuring their success vs prior year, they are measuring to budget. Ergo, we don't actually know how well D&D did, in WotC's eyes.

 

[FitzTheRuke]

Except that they said the exact opposite to their investors


Unless your suggestion is that licensed goods for the movie released four days before the quarter ended outsold physical books by such an extent that the Hasbro share of those goods earned them double digit growth, again in four days?

Not at all. They don't need to sell the licensed goods in four days - they need to sell the license to licensees earlier in the quarter. The D&D BRAND then becomes more successful for the quarter. The licensees are the ones who need to worry about whether or not their merchandise actually sells to people without WotC having to worry about it. As far as I understand it (and I admit, I don't know a lot about licensed merchandise beyond selling it for thirty years) that's why a company would want to license their brands.

Also, your tweet doesn't say anything at all about how D&D books have been selling, so I don't know how it's the "opposite" to what I suggested. I sell D&D books for a living (among other things) and while the current ones are still selling well, they're not selling anywhere near as many as previous offerings. I can't imagine how my experience in this wouldn't also be true across the board.

 

[Parmandur]

This quite literally does not add up when looking at their numbers, unless WotC has something other than MtG and D&D that lost a lot of sales / was discontinued. Nothing comes to mind though

EDIT: they do say it grew 13% though, go figure...

"Tabletop gaming revenue increased 13%. Digital and licensed gaming revenue increased 9%, bolstered by the addition of D&D Beyond."

I think Hasbro is engaged in some funny business to hide something not doing well, but not D&D or Magic: those are the screen protecting something failing in digital, methinks. WotC became the umbrella for all digital initiatives from Hasbro, for all their brands, I'm the past year and a half. Looks like something very much did not do well the past year.

 

[Parmandur]

Not at all. They don't need to sell the licensed goods in four days - they need to sell the license to licensees earlier in the quarter. The D&D BRAND then becomes more successful for the quarter. The licensees are the ones who need to worry about whether or not their merchandise actually sells to people without WotC having to worry about it. As far as I understand it (and I admit, I don't know a lot about licensed merchandise beyond selling it for thirty years) that's why a company would want to license their brands.

Also, your tweet doesn't say anything at all about how D&D books have been selling, so I don't know how it's the "opposite" to what I suggested. I sell D&D books for a living (among other things) and while the current ones are still selling well, they're not selling anywhere near as many as previous offerings. I can't imagine how my experience in this wouldn't also be true across the board.

Not to discount your own experience, but the Amazon numbers still seem strong. It is worth noting that they called out Beyond as doing gangbusters, so that could have an impact on physical books

 

[Scribe]

Also, your tweet doesn't say anything at all about how D&D books have been selling, so I don't know how it's the "opposite" to what I suggested. I sell D&D books for a living (among other things) and while the current ones are still selling well, they're not selling anywhere near as many as previous offerings. I can't imagine how my experience in this wouldn't also be true across the board.

Forgive me as I'm ignorant of the details, but would WotC cutting out the middle men and selling direct on Amazon account for it?

 

[bedir than]

It's up less than a dollar from yesterday's close, which is peanuts. My point, though, was that WotC is not measuring their success vs prior year, they are measuring to budget. Ergo, we don't actually know how well D&D did, in WotC's eyes.

From the call to today it went up $7. For a stock that started April at 52 that's not peanuts.

 

[FitzTheRuke]

Forgive me as I'm ignorant of the details, but would WotC cutting out the middle men and selling direct on Amazon account for it?

It wouldn't account for GROWTH. There's just NO WAY that the current BOOKS have outsold previous ones. It's absolutely possible that they've done better at Target and Amazon than they've done for me - but only relatively so. I've never experienced a situation where my personal sales were not indicative of the trend at large. Or when they were, it was a very, VERY obvious blip (usually because it was something that I personally hand-sold that outsold something more mainstream).

But there are many ways for D&D the brand to make more money in spite of the books dropping off a bit.

 

[bedir than]

It wouldn't account for GROWTH. There's just NO WAY that the current BOOKS have outsold previous ones. It's absolutely possible that they've done better at Target and Amazon than they've done for me - but only relatively so. I've never experienced a situation where my personal sales were not indicative of the trend at large. Or when they were, it was a very, VERY obvious blip (usually because it was something that I personally hand-sold that outsold something more mainstream).

But there are many ways for D&D the brand to make more money in spite of the books dropping off a bit.

they also added a new channel with DtC that included digital bundles