Magic: The Gatheringrecent set of Fall out-themed tag is “franchise at its best Command when to set up” said Hasbro CEO Chris Cocks. The announcement was made Wednesday in earnings call with investorsbringing attention to the ambitious potential of card games farther universe initiative. But it also highlights the risks of working with IP licensed from other companies.
After successful tests with The Walking Dead and Godzilla themed cards for Magic: Gathering, The Universes Beyond initiative was officially launched in February 2021. The first batch of crossover cards includes franchises such as War hammer 40,000 And Which doctor?. Even though all those sets are selling well, Lord of the Rings suite has made a splash in the C-Suite. It generated more than $200 million in revenue in less than six months, more than double the standard set by other historically high-performing sets, according to Hasbro.
Now the Rhode Island-based company wants to produce it two sets of similar size each year. That means incurring some hefty costs to license the best IP.
The Fallout cards, released in May, were well timed to benefit from the launch Fall out online TV shows on Amazon. But Cocks is quick to note that this isn't a Lord of the Rings-sized win for Hasbro.
“I would say Fallout is a great series,” Cocks said. “This is probably our best performing Command set ever, whether it's a Universes Beyond set or not. However, Commander sets tend to be a little smaller than our overall launch sets, so you get weight accordingly.”
The Commander format generates much less revenue for Hasbro than “launch” sets — that is, larger multi-format sets designed for multiple communities within its player base. Compared to the cost of licensing Fallout from its owner at Bethesda, Fallout may generate less revenue for the company than The Lord of the Rings.
The next Universes Beyond release expected in 2024 is Assassin's Creed, and a portion of the earnings from those cards will have to go to the IP owner, Ubisoft. The same is true for the next two Universes Beyond series planned for 2025, including Marvel (owned by Disney) and Final Fantasy (owned by Square Enix).
Can any of those three series compete with Lord of the Rings? Cocks seems to think so, and his message to investors is that the cost of licensing the IP will outweigh the revenue earned from selling those tokens.
“I think Final Fantasy and Marvel are going to be pretty important,” Cocks said. “At least I would put them in the same league, like what we saw with Lord of the Rings.”
According to Cocks, the reason is clear: Marvel has a huge international fan base, and Hasbro signed a series deal with Disney, meaning they'll have a few bites at the apple. On the other hand, Final Fantasy is similarly big in the United States and Europe, but it's even bigger in Japan.
“Our sales in Japan will probably be lower than what we did with Lord of the Rings,” Cocks said, “because of the resonance it had in that market – which, you should remember, is the number two market for Magic and number two. overall market for card games.”
IP licensing costs place more emphasis on the performance of Hasbro's own cards created using its own in-house IP. Those sets have substantially lower production costs. Cocks said he's still waiting to see what the company's latest internal suite looks like, Outlaw of Thunder Junction, perform. Of course, the irony here is that at the same time Hasbro is using licensed IP to increase its game sales, it is also hoping to license its own IP to video games, movieand other media projects.
“I think what you're seeing in Q1 is our overall strategic thesis playing out,” Cocks said, “that Hasbro is effectively a games, IP and toys company in that order there.”
The trick is to ensure that Hasbro puts as much effort as possible into its own self-created IP, thereby making it as attractive as possible to other developers and publishers.
