Business Analyst Warns That Company Behind Magic: The Gathering Is Overproducing Cards

A financial analyst offered a warning over Hasbro’s handling of Magic: The Gathering, prognosticating that their flagship series may be headed towards a downturn. Bank of America analyst Jason Haas wrote that Hasbro is “killing its golden goose” and downgraded his evaluation of the company from “buy” to “underperform” as the company’s stock dipped to its lowest point in almost two years.

Haas explained that Hasbro is “destroying the long-term value of the brand” by creating an oversupply of cards. This overproduction has led to a situation where “card prices are falling, game stores are losing money, collectors are liquidating and large retailers are cutting orders.” He also wrote that “Magic has grown primarily by extracting more revenue from each player rather than by growing its player base.” He observed that Hasbro should be particularly concerned because Magic the Gathering makes up as large as 15% of Hasbro’s annual revenue and 35% of its yearly earnings.

This overproduction of cards comes from an abundance of new sets, with the Magic 30th Anniversary release, a $999 bundle that includes many rare cards, being cited as emblematic of the problem. Haas wrote, “Not only is the price excessively high,” Haas wrote, “but the set also includes Reserved List cards which Hasbro had promised to never reprint. This has created panic among collectors and we’re seeing collections being liquidated now that the scarcity value of Magic is in question.”

It should be noted that although the overproduction of cards may be a long-term negative for Hasbro’s bottom line, its effects on the broader trading card scene are more nuanced. While the existence of more copies of cards is particularly bad for collectors and small retailers, like local board game stores that use second-hand sales of cards to stay afloat, more cards generally mean lower prices for the average player. It’s common for particularly potent cards to have fewer versions in print, making it expensive to purchase cards second-hand for the most relevant competitive decks. With more cards being printed, deckbuilding potentially becomes more affordable.

However, the other factor is that not only are there more copies of existing cards in circulation, but Hasbro has also been rapidly releasing new sets, which financially squeezes players interested in game formats that only allow cards from the most recent releases. When Haas mentions how the company has been “extracting more revenue from each player,” this is what he’s referring to. Hasbro’s stock has fallen by 44% this year, vastly outpacing the general S&P 500 decline of 14%, so it is possible that changes to Magic’s release schedule are on the way.