Hasbro's Adult Fans Power a 'Magic' 16% Sales Jump

Hasbro's strongest growth in the second quarter came from an audience most toy companies chase last: adult collectors, hobby gamers and longtime fans. Revenue in the Wizards of the Coast and Digital Gaming segment increased 27%, led by the Magic: The Gathering trading card franchise.

"Magic fans play and collect for years because mastery never ends," CEO Chris Cocks said on the company's second quarter earnings call Tuesday. "That retention is what powers a robust secondary market and a passionate community of tens of millions of fans who treat the game as a lifelong pursuit rather than a passing trend."

That fan base is reshaping Hasbro's digital strategy. The company is cutting $56 million in games that no longer meet its investment thresholds and focusing on the platforms its most loyal fans already use. The titles staying in the lineup–Magic: The Gathering Arena, Baldur's Gate 3, Dungeons and Dragons Beyond and two new games set for 2027 (Exodus, a sci-fi role-playing game and Warlock, a Dungeons & Dragons expansion)–are built for the fans driving Hasbro's revenue growth today.

On the cost side, Hasbro is moving more development work to lower-cost regions. Montreal is emerging as its primary hub, and total digital spending is expected to fall at least 25% annually by 2028. Some of those savings are funding CharacterOS, Hasbro's behavioral licensing platform that turns Hasbro characters into digital avatars and interactive experiences fans can license directly.

Internally, Hasbro calls this strategy GEM Squared: gamified, entertainment-driven, multi-purchase and multi-generational. In plain terms, it means designing products for adults who grew up with the brand and never left it.

That customer is showing up across every category. Magic: The Gathering revenue grew 32% in the second quarter. The Marvel Super Heroes set became the fastest release in the game's history to reach $300 million, setting records for both day-one and month-one sales. Distribution grew by double digits across hobby stores, mass retail and international markets. Hobby stores now account for roughly 70% of Magic sales, mass retail about 20% and international markets the remaining 10%.

The adult-focused push extends beyond gaming. Blooms by Play-Doh, a new line aimed at adult crafters, sold out at major retailers within 24 hours of launch, Cocks said. A multi-year licensing deal with Nintendo to develop Legend of Zelda products will begin appearing in 2027.

"Retailers are leaning in and are pretty eager for more product in those GEM Squared categories," Cocks said. "The gamified, entertainment-driven, multi-purchase, multi-generational. Basically the stuff for kidults."

Hasbro reported second-quarter net revenue of $1.14 billion, up 16% year over year. Adjusted operating profit was $282 million, up 14%, with an adjusted operating margin of 24.8%. Adjusted earnings per diluted share were $1.28, down 2% due to the digital write-down.

Through the first half, net revenue of $2.1 billion grew 15%. Adjusted operating profit of $569 million grew 21%. Adjusted operating margin expanded 150 basis points.

Wizards segment revenue grew 27% to $664 million, with operating profit up 12% to $270 million and an adjusted operating margin of 40.7%. Consumer products revenue grew 5% to $463 million, though the segment posted an operating loss of $7.5 million. Entertainment revenue was $12.8 million, down 20%.

For the full year, Hasbro raised its consolidated revenue growth guidance to a range of 5% to 7% on a constant currency basis. It lifted its adjusted operating margin outlook to 25% to 26%. Adjusted EBITDA is now expected between $1.45 billion and $1.5 billion. Consumer products revenue is expected to grow in the low single digits. The company also increased its share repurchase target to a minimum of $200 million for the year, up from $100 million previously.