Apparently there is a move from a minority share holder to split WOTC from Hasbro. Curious to see if this has any legs:
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Essentially, WotCâs franchises have much higher growth potential than most of Hasbroâs other, more traditional, toy franchises. Think MtG vs. MonopolyâŚ
MtG, etc.: physical cards, events, digital cards, digital subscriptions, âŚ
Monopoly: physical board game
So the activist investor feels the P/E for WotC is being undervalued because itâs blended in with all the lower performing Hasbro brands.â
Rudy put out a video with a good overview of this.
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If I were runninng Hasbro Iâd watch to eject that cancerous company as soon as I possibly couldâŚ
That company that is making 75% of their profits?
icv2.com/articles/news/view/48207/wotc-segment-75-hasbro-profits-q1
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As a Magic collector and player, my first thought was, âCould this mean an end to the 'MTG and â products that have been flowing from the WotC machine?â 
Mtg has been going to shit with Hasbro treating it as a product first and a game second.
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I think youâre greatly underestimating board game engagement and profitability. There is just as much interest in board games as there is in TCGs - the only difference is that TCGs have a large secondary market whereas board games do not (though this doesnât really benefit the companies all that much).
There are plenty of board games with events, digital cards and digital subscriptions - including Monopoly. Monopoly is one of the largest online gambling franchises as well. The Monopoly world championships take place every 4-8 years with the last one being held in 2015, awarding the winner a cash prize of $20,850.
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Yep, that one.
Thereâs nothing to underestimate â Alta Fox put out a 100-page report with the numbers. MTG grossed nearly $1b in 2021, with every other Hasbro-owned card/tabletop game combined grossing $500m. Monopoly is peanuts compared to WotCâs value to Hasbro.
As the report puts it: âour view is that Hasbro is now a âWizards of the Coastâ business that also happens to make toys.â
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Interesting how the newly announced WOTC president, Cynthia W. Williams, and the new General Manager of Digital Gaming, Tim Fields, both have deep history with Microsoftâs Xbox department.
Also interesting how the former President and COO of WOTC and Digital Gaming, Chris Cocks, is now becoming the new Hasbro CEO.
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Fascinating deck to read through. Obviously a lot of bias from the perspective of alta fox, but some very interesting insights, nonetheless. Probably a lot of similarities between MtG and Pokemon TCG that can be inferred from that report.
@pichufan, all very fair points. Monopoly likely is a more famous/well-known brand, has a popular mobile app that is monetized, etc. But I think the main difference is at the core of each game⌠with MtG (or Pokemon, Yugioh, etc.) there will always be a new set to buy in a few months; always a desire to buy one more pack or box; always the chase of pulling the card you really want. Monopoly at its core hasnât changed in 50?+ years. Thereâs a mobile game, and tournaments, but nowhere near the scale or future growth potential of top-tier TCGs. Recurring revenue is one of the most important aspects investors are looking for & factors of a companyâs P/E ratio. So even if Monopoly and MtG both grossed the same amount, if investors buy into Alta Foxâs argument, MtG will always be valued significantly higher, given investorsâ sentiments of recent years.
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My comment wasnât about this WotC/Hasbro split or even MTG/Monopoly, rather the incorrect comparison that TCGs have events, digital products and subscriptions whereas board games do not. A lot of especially successful board games have regional and world championships, they have a digital presence and offer subscription-based services - itâs not much different from successful TCGs in that regard.
I think a generic TCG stacked up against a generic board game would have a pretty uniform split.
If I was to comment on a WotC/Hasbro split Iâd say that I think a lot of WotCâs current value is bolstered by added interest in TCGs in general throughout the pandemic and - I say this as no investor, just a spectator - I wouldnât be too certain that WotCâs upward trend will continue.
The Pokemon TCG has had periods of extraordinary popularity as well as periods of dormancy. MTGâs popularity has historically functioned much differently. It has never had periods of dormancy, nor has it ever reached the heights of popularity that Pokemon has experienced. Itâs just been consistently very popular every second of every day since late 1993.
MTG sales increased during the pandemic, but so did board game sales. WotC was Hasbroâs most valuable asset pre-pandemic, and will almost certainly (IMO) remain so post-pandemic. I agree that TCGs are particularly trendy right now, but I donât think MTG was/is the primary beneficiary of this renewed interest. From what I can tell, the people buying/playing MTG are people who were already doing it pre-pandemic. Relatively different situation from Pokemon, and extremely different situation from flash-in-the-pan TCGs like Meta Zoo.
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With GE and Johnson and Johnson spinning off units into separate companies, it definitely looks to be in vogue to spin off right now.
TIL. Super interesting! Iâve never heard that before, but it makes sense.
Dan beat me to it! I was going to share that story earlier, but couldnât remember all the details, and how much of it is the whole reason. A former WOTC employee said that Pokemon was why Hasbro bought WOTC, for the reasons Dan mentioned. Of course its just the story according to those employees, who knows if there is more to it behind the scenes.
As for the market discussion, I donât think MTG had anywhere near the reaction Pokemon did during the pandemic. Also board games sold like crazy during the pandemic. According to ebay, board games had an even higher percentage of sales than Pokemon cards:
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Does anyone know the story how WotC lost the Pokemon license after e-series? Given that they had a couple sets planned that were never printed, Iâve always assumed they werenât anticipating losing the license.
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I donât know the story, but I just did a bit of digging and found an interesting article from 2003 that outlines the fallout between WotC and Nintendo. The article makes it sounds like Nintendo simply wanted a larger share of the profits, though Iâm sure thereâs more to the story than that.
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On a separate note, thereâs some other fascinating info in the article that I wasnât aware of. Apparently, EX Ruby & Sapphire was pretty much entirely developed by (former) WotC employees:
EX Ruby & Sapphire â the true last WotC set? 
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Interesting, didnât realize that was happening back then. Even today, in the original investor deck posted here, investors are viewing MtGâs potential as even higher than it currently is based on exactly what youâre saying, Pokemon/Yugioh being potential gateways to Magic.
A lot of us look back very fondly on the WotC era of Pokemon TCG, with good reason. But youâre right that at the time there were several unpopular decisions, and interest was significantly declining in Pokemon TCG. WotC was responsible for the marketing and was a factor in that decline.