How Magic: The Gathering Took Over Hasbro

For years it was Mattel vs. Hasbro battling for toy dominance.

And then Hasbro shoved an old business model into an old product and got something completely new. Now they’re not even playing the same game – and the Magic: The Gathering takeover is complete.

In its 2025 financial presentation released last month, Hasbro announced that Magic made almost $800M in operating profit, or about three-quarters of the company’s total adjusted rake. Hasbro’s market cap is up 115% since its Nov. 2023 nadir, while Mattel is languishing, down 44% since the height of excitement around Barbie movie production.

And the how is maybe more impressive than the what: Hasbro has pulled an old trick out of its hat and made it new, renting third-party intellectual property, slapping it on Magic cards, and watching those little pieces of cardboard turn into straight paper.

It is similar to the age-old licensing model for toys: Kenner, after all, made its entire fame and fortune from a fortuitous licensing deal with Star Wars in the late 1970’s, and there are countless other examples of toymakers leveraging third-party IP.

In recent years, however, both Hasbro and Mattel have focused on licensing their own IP – Barbie, Transformers, etc. – out to entertainment shops to create TV shows and movies that would in turn drive marketing for toys and other merch. That was the new secret sauce of the toy business for decades. Hasbro executives believed in it so much that they brought production in-house, purchasing Entertainment One for $4B in 2019.

But then 2020 happened, bringing with it a pandemic that halted virtually all entertainment productions, and Hasbro was left wondering what to do with its new studio. The matter was exacerbated in 2021 when CEO Brian Goldner, who had championed the IP licensing model, died of prostate cancer at age 58.

When President Chris Cocks was elevated to the head executive role, he also had some new ideas about where to take the business. Or, rather, old ideas, turning that licensing model right-side-up and using Hasbro products – Magic cards – as tiny billboards for other brands’ IP.

Today, Hasbro is using its flagship card game as a distribution engine for other peoples’ stuff.

And with Magic, there is a twist. Because a consumer in 1977 may be interested in a toy for every Star War, but the allegiance likely ended there. Magic, however, comes equipped with its own 30-year IP, a base of 10M active global players, and an addictive game that keeps consumers and collectors coming back for more every time a new product is dropped.

In economic terms, Magic is sticky. It also provides a crucial hedge for the birth-rate risk inherent in the toy and games business: The average age of a Magic player is 35.

“They have done a fantastic job of widening the funnel in the last couple years, and it’s become a multigenerational type of product,” Roth Capitol Partners Managing Director Eric Handler told CNBC recently. “The player base is growing. It’s a sticky player base that is showing eagerness with new products and new ways to play.”

It all started in 2020 when Wizards of the Coast printed cards bearing The Walking Dead IP to its Secret Lair series. Fans were suspicious – more on them soon – because Secret Lair had been a program of small-batch card drops until that point had only been used to test new designs and artists on reprints of existing cards.

And that’s as far as fans wanted it to go.

But at the time the TV show The Walking Dead was also an in-house property, distributed by Entertainment One. The gamble paid off – The Walking Dead became the best-selling Secret Lair drop of all-time. Suddenly cards such as Rick, Steadfast Leader and Daryl, Hunter of Walkers were making their way into Magic playgroups.

Then at Hasbro’s Investor Day in February 2021, Cocks announced full sets of third-party IP cards called Universes Beyond, set to be released in the coming years. For the first time, Magic collectors would see tournament-legal sets bearing characters not from the MTG universe, but from Lord of the Rings and Warhammer 4000.

(In the case of Warhammer, the sets would be released only in the popular Commander format).

Universes Beyond proved effective to say the least; Magic surpassed $1B in revenue for the first time in 2022, made another $1B in 2023 and in 2024, then jumped 59% last year with massive hits in its Final Fantasy, Spider-Man and Avatar: The Last Airbender sets.

And yet its most loyal fans could not be more pissed.

In the 2+ years since the explosion of Universes Beyond, the Loyalists have set the internet ablaze with their displeasure. The general argument has gone that the third-party IP was an insult to the universe that the original creators of Magic had carefully curated over the past 30 years, and that fans of other franchises wouldn’t stick around to see the whole thing burn down anyway.

A popular Magic content creator named Sam Gaglio (aka Rhystic Studies) took to his Substack in October 2024 to bemoan all of these damn multiverse kids on the Magic lawn.

“The boundaries between our game and their media franchises have melted away,” he wrote, “and Magic is now designating itself an ‘IP’ within its own flagship presentations.”

The complaint here, by the way, is that by bringing in so many other third-party IP’s, the Magic universe had been lost for the success of the Magic card game.

He continued:

“If the goal is to make more money, what happens when that money is just being spent on more crossovers? At that point, isn’t the proverbial ouroboros just eating its own tail?”

It turns out, actually, that while the dragon of Magic may be diluting the IP base of its play universe – there was a 20% growth in unique tournament players in 2025 – it does not make much of a meal out of its tail of royalty payouts. Royalties for Universes Beyond went up about $52M, dwarfed by an increase of revenue of $700M on 45% margins.

To put that in perspective, the Final Fantasy set released in June sold $200M in one day, meaning that on that day, June 13, Wizards of the Coast had covered its entire royalty overage for the year before breakfast.

And sure enough, as the Magic loyalists fume, Cocks and team are celebrating. In a blog post from October, head designer Mark Rosewater said the production evolution was not “some evil agenda to make players play the way we want them to play.” “Universes Beyond is at the level it is,” he wrote, “because it’s a wild, run-away success, by every possible metric we have to measure success.”

To which the first commenter replied: “They really must only be using $$$ as a metric.”

Hasbro is indeed banking on it, with a Magic set devoted to Teenage Mutant Ninja Turtles released earlier this month and more on the way promoting Marvel Super Heroes, The Hobbit and Star Trek. Hasbro is expecting Magic to support a 3-5% growth for the overall business in 2026, and if its 10-year annual growth rate of 16% holds, Magic could break the $3B mark in revenue by 2029.

For its part, Mattel is still playing catch-up; this year it plans to focus on building out its digital footprint, something Hasbro began seven years ago, and is still banking on the marketing bump from its Masters of the Universe and Matchbox movies. And both Mattel and Hasbro look to capitalize on the success of K-Pop Demon Hunters, securing dual licensing deals on merch for the successful franchise.

Fans are not wrong about the dilution of the Magic: The Gathering universe. About half of all Magic cards printed today come affixed with characters and stories created by people outside the Wizards of the Coast shop. But the dilution was the main feature – not a bug – and it has put the company on an upward trajectory at a time when its main competitor is scuttling.

The strategy is also going nowhere: Rosewater wrote recently that Universes Beyond sets are locked into the Magic plans at least into “the early 2030’s.”

There’s no word yet from Hasbro on when and if we might see a Rumi, Hunter of Demons trading card. It may just be a matter of time and $$$.