Bank of America thinks Hasbro is destroying Magic: The Gathering; here’s why they have changed their position on the company.
Hasbro has been pushing Magic the Gathering quite hard in the past year or so, and while the profits were flying high, their recent strategies, at least according to Bank of America analysts, are actually destroying the game.
In a pre-market report, Bank of America changed their rating of Hasbro stock from Buy to a double downgrade of Underperforming, a move that cause ripples in the market. According to Bank of America, this is how they actually see Hasbro stock moving in the future, and it all basically comes down to Magic the Gathering.
Why Bank of America Accuses Hasbro of Destroying Magic: The Gathering
With the recent “rerelease” of reserve list cards (priced at $999 for essential proxies) pushing near-constant releases, Hasbro has been pushing the game basically as hard as possible. Wizards of the Coast actually had the highest operating profit of all of the Hasbro brands, and obviously, because of the continued growth, the stock was flying high.
This news of high sales was actually juxtaposed with player feedback, especially with the recent $999 packs that could score you cards on the reserve list, the fact that new cards are almost being shoved down players’ throats, and even the original creator of Magic the Gathering damning the direction Hasbro is taking the game.
It looks like the players might have had a little more insight into what was actually happening at the company. Bank of America seems to have actually heard the players’ concerns and did a deep dive into the whole issue, which has already led to a huge dip in stock prices, already %5.2, with CNBC saying the stock price could drop more than %30 by the time the dust settles…
Are There Too Many Magic The Gathering Releases?
From CNBC, this might be the most telling statement to start with:
BofA said Hasbro has been overprinting cards and destroying the long-term value of the business.
This is quite a strong statement, but if you’ve been paying attention to the actual releases, this really seems to have been the case. Not only did they release products that felt bad to players, but their normal set releases have also been skyrocketing in price just since the summer of 2022 alone.
This feels like a trend with game companies a lot of the time, get the quarterly profits above all else, and the long-term plan will work itself out. This is a huge issue as they seem to be attempting to extract more money from existing players instead of trying to expand the player base.
From BofA Research
When looking at the Magic the Gathering releases over even the past three years, the number of releases has more than doubled! This is actually pretty insane; if you compared this to another game (or any product, really), this would almost be unheard of.
If you played the game three years ago, you would have had to spend more than double to keep up with releases. However, while a lot of players were complaining about so many new releases, they may not have thought it could destroy the game.
According to Bank of America, that’s exactly what Hasbro is doing. Specifically, at this rate, they think the game will be destroyed by too many releases, which cheapens the actual value of those releases and cards.
What is The Problem With Magic the Gathering’s Card Value?
Basically, the reason certain Magic cards have value is the fact that Wizards of the Coast promised never to reprint them, so whatever is out there is all there is.
This creates scarcity in the market and raises the price. Hasbro sort of skirted that idea by making “reprint-proxies” and not actual new cards. So, while it might have seemed great to them at the time to sell $1000 packs of 60 cards, Bank of America pointed to this as a big issue in their new valuation.
Why? According to Bank of America, the 30th Anniversary packs show Hasbro is willing to devalue its overall Magic card values for profits. This, in turn, has made the market for reserve cards tumble.
With these single card values from MTGstocks, you can see some of the prices of reserve list cards are really dropping. The numbers on the left are the average prices, and the numbers on the right are the current market prices as of this writing.
Some card prices haven’t moved much, but some have dropped by more than %50. Just something interesting to look at right now and a decent indicator of how people value their actual cards that were printed 30 years ago amid the news of these new “reprint-proxies.”
What Can Hasbro Do Now?
Honestly, the answer is simple; it seems like, according to Bank of America, Hasbro just needs to stop printing so many cards! They need to sort of reset the overall market value of what a new release is actually worth and even stabilize the value of cards over the entirety of their line.
Then, the other part of the equation, according to Bank of America, is that Hasbro should expand the player base instead of just trying to get as much money from the current player base as possible. As players eventually grow away from games, which may happen faster if they feel they are getting exploited, it means the game itself will slowly start to fade.
Magic the Gathering has done a lot of crossover sets this year, and even one with Warhammer 40k. However, it should come as no surprise that it would be beneficial for those people actually to stick around for more than just that one release.
We’ll see moving forward into next year if Hasbro actually slows down the pace of releases or if they just keep going headlong. According to Bank of America, if Hasbro doesn’t change course, they might destroy Magic the Gathering at this rate.
Magic The Gathering Tells Customers & Bank of America NO!
Wizards of the Coast isn’t too concerned with fatigue for all the Magic the Gathering card sets they have been releasing; click here to see more on that.
What are your thoughts on the increased release schedule? Do you agree with Bank of America and their ideas on Magic: The Gathering?
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About the Author: Travis Pasch
Travis Pasch
Job Title: Head Writer & Editor
Joined: 2019
Socials: @paschbass
Bio: Dark Eldar Dracon and Warhammer 40k hobbyist since the third edition in 1998. He also loves camping because you can only paint so much! He joined the Spikey Bits team in 2019 and has been the main daily writer since 2020.
Maybe one day, he’ll finish converting all his Ad Mech models and turn into a true tech enjoyer, complete with sad and happy robot noises!
