WotC WotC Generates 75% Of Hasbro's Profit

ICv2 is reporting that WotC generated $110M of Hasbro's $147.3M operating profits in the first quarter of this year, with an increase of 15% on last year.

Of overall sales, WotC generated (only!) 22% of Hasbro's $1.1B.

The growth is attributed to Magic: the Gathering and D&D. Recently, Hasbro restructured with 'WotC and Digital Gaming' getting it own division.

WotC - D&D Gets A New Division At Hasbro

Hasbro is reorganizing and giving tabletop gaming -- Dungeons & Dragons and Magic: the Gathering -- a higher priority. According to the Wall Street Journal, WotC's revenue last year was $816 million (a 24% increase on 2019). Brian Goldner, Hasbro's Chief Executive, says WotC is predicted to...

www.enworld.org

 

[Morrus]

With so much revenue, will Wizards of the Coast ever be able to purchase freedom from the Hasbro corporate enslavement?

You have it backwards. The more it makes, the less likely a company would let that asset go. You don't get rid of the assets which are making you the most money.

 

[humble minion]

With so much revenue, will Wizards of the Coast ever be able to purchase freedom from the Hasbro corporate enslavement? Like is there an escape clause in the contract that sold WoTC to Hasbro?

There is no Wizards of the Coast separate to Hasbro. Wizards can't 'purchase its freedom' from Hasbro because Hasbro owns everything WotC has to purchase with, and there's no Wizards decision-making capacity separate to that of Hasbro.

Once a company is sold, it's sold. There's no going back unless the purchasing company decides to sell to someone else. Wizards has no more autonomy than the Hasbro accounting division.

 

[Marc_C]

With so much revenue, will Wizards of the Coast ever be able to purchase freedom from the Hasbro corporate enslavement? Like is there an escape clause in the contract that sold WoTC to Hasbro?

WoTC is just a division with a logo. It's no longer a legal entity. The only way WoTC could leave Hasbro would be when Hasbro decides to sell the WoTC brand. With the numbers they are cranking out these days that will not happen for the foreseeable future.

 

[aco175]

Gee, with that amount of money, you would think the movie will be good. Although it is someone else's money.

 

[Mannahnin]

WoTC is just a division with a logo. It's no longer a legal entity. The only way WoTC could leave Hasbro would be when Hasbro decides to sell the WoTC brand. With the numbers they are cranking out these days that will not happen for the foreseeable future.

Wizards of the Coast, LLC is a legally incorporated entity. It is also a wholly-owned Subsidiary, though, so your conclusion is correct and I agree with your prediction.

 

[John R Davis]

This is good for tabletop gaming all round. Keep up the good work

 

[Marc_C]

LLC

Wiki says : "An LLC is not a corporation under state law". LLCs are just a way to play around with taxation depending on States and liability the owners is limited.

 

[Mannahnin]

Just for clarity, an LLC is definitionally a legally-incorporated entity. A Limited Liability Company is like a hybrid between a partnership and a corporation. It has its own tax ID. Though if it is a wholly-owned subsidiary it may file taxes through its parent company. Similarly to how a child is a legally separate being from its parent, though dependent thereon.

This is a bit different from being "just" a division with a logo, which means there's no separate legal entity. Merely a DBA (Doing Business As) name (some states require a Registration of Fictitious Name, to document that entity A also uses this alternate name, rather than entity A owning entity B).

 

[AmerginLiath]

It makes sense. Production and especially shipping/distribution of toys and games is much more expensive right now. Meanwhile, WotC is a mix of publishing, printing of card stock, and selling of digital files. Even without taking into account the increased visibility of D&D et al during the pandemic, there’s a vast difference in overhead between divisions and thus a lot more profit coming from the sales of this division. The brand has managed itself very well in recent years, and Hasbro has found a good balance of support and hands-off involvement to maximize how it grows in its particular sector — while any of us may have different qualms one way or another with editorial direction, WotC as a brand line is indisputably running very well.

 

[Burnside]

They don't give a breakdown between D&D and Magic revenues, so it's hard to tell exactly where the growth is coming from. It's really striking that WotC is 75% of the profits but only 22% of the sales though - D&D/Magic must be seriously high-margin products to get that sort of ratio. Vindication for people who rant about how money-grubbing and overpriced they are?

Not necessarily. I suspect there's a ton of profit from licensing deals with DNDBeyond, Roll20, Larian Studios, and OneBookShelf - all of which cost WotC nothing. So that's profit WotC is generating but not based on direct product sales.