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“Hasbro is Fumbling the Ball a Little Bit” - says Bank of America

Started by Reckall, February 08, 2023, 08:10:59 AM

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Reckall

February 08, 2023, 08:10:59 AM Last Edit: February 08, 2023, 08:12:38 AM by Reckall
The article is behind a paywall I believe (I'm subscribed) but the title alone is telling:

Hasbro 'continues to destroy customer goodwill' and the stock could crash 29% as it dilutes the value of Magic: The Gathering, Bank of America says

https://markets.businessinsider.com/news/stocks/hasbro-dilutes-magic-the-gathering-brand-stock-price-bank-america-2023-2

Seeing "Hasbro", "29" and "crash" in the same sentence is vaguely eerie. Anyway, the gist of it is that Hasbro is worryingly eroding the value of WotC. A overproduction of MTG cards is diluting the brand value. D&D is suffering the dire consequences of the OGL stunt. Generally speaking:

"Within its Wizards segment, Hasbro continues to destroy customer goodwill by trying to over-monetize its brands."

This is a direct quote from BoA, which, as a result...

reiterated its "Underperform" rating for Hasbro and its $42 price target [for share], which represents potential downside of 29% from current levels.

The article is longer but this is it in essence. When players complain, OF COURSE the laments come from bigoted incels. I doubt, however, that this can also apply to BoA - but I'm not an economist.
For every idiot who denounces Ayn Rand as "intellectualism" there is an excellent DM who creates a "Bioshock" adventure.

Klytus

#1
February 08, 2023, 11:51:12 AM
QuoteHasbro stock has 29% downside potential as it continues to dilute the brand value of Magic: The Gathering.
That's according to Bank of America, which reiterated its "Underperform" rating on the stock in a Tuesday note.
"Within its Wizards segment, Hasbro continues to destroy customer goodwill by trying to over-monetize its brands."

Hasbro continues to dilute the brand value of its popular Magic: The Gathering card game, according to a Tuesday note from Bank of America, which said that the company faces a steep decline in its share price if it continues to "destroy customer goodwill."

The bank reiterated its "Underperform" rating for Hasbro and its $42 price target, which represents potential downside of 29% from current levels. In November, BofA warned that Hasbro was "killing its golden goose" by over-monetizing Magic: The Gathering.

According to BofA, Hasbro continues to over-monetize the brands within its Wizards segment, which includes Magic: The Gathering and Dungeons & Dragons.

"Within its Wizards segment, Hasbro continues to destroy customer goodwill by trying to over-monetize its brands," Bank of America said. The bank said that while it preannounced negative earnings, the stock is still not de-risked "given a host of outstanding issues."

Mainly, Hasbro is attempting to squeeze out as much profit as possible from its Wizards products in the short-term without any thought as to the long-term durability of its brands. And the over monetization is irking customers, according to BofA.

"We remain especially cautious on Hasbro's Wizards segment given its over-monetization of Magic. Wizards recently tried a similar tactic with D&D-proposing changes to its licensing agreement which led to substantial pushback from the community including calls to boycott the D&D movie," BofA explained.

Hasbro wanted to change its 20-year-old open game license for Dungeons & Dragons in a bid to boost revenue ahead of an upcoming movie release based on the game.

The specific changes would have required independent publishers and content creators to report financial data directly to Hasbro and pay significant fees if they generated a certain threshold of revenue.

Hasbro has since dropped its proposed changes to Dungeons & Dragons after receiving a strong amount of backlash from customers, with nearly 70,000 D&D fans signing a petition protesting the proposed licensing change.

The snafu by Hasbro validates BofA's view that management at the toy company remains willing to risk customer loyalty for short-term profit.

"We've spoken with several players, collectors, distributors and local games stores and have become aware of growing frustration. The primary concern is that Hasbro has been overproducing Magic cards which has propped up Hasbro's recent [earnings] results but is destroying the long-term value of the brand," Bank of America analyst Jason Haas wrote in November.

The oversupply of Magic cards means "card prices are falling, game stores are losing money, collectors are liquidating, and large retailers are cutting orders," Bank of America explained.

The bank names "weak fan engagement with Hasbro's brands" and "fading appetite for Magic releases" as key downside risks for the stock.

I was able to view the above without paying. I think they have a free article limit per month.
Klytus, I'm bored. What plaything can you offer me today?

An obscure body in the S-K System, Your Majesty. The inhabitants refer to it as the planet... "Earth".

Chainsaw

#2
February 11, 2023, 08:49:21 AM
Very bad management from the board/c-suite. The whole thing's eaten up with politics and has lost its way - doesn't understand the product, doesn't understand the customer, doesn't understand its fiduciary obligation to its shareholders. You need a brutal activist to force leadership changes. Probably requires moving HQ too.

The Spaniard

#3
February 11, 2023, 10:27:38 AM
BofA criticizing someone else for questionable business practices?  Now that's funny!

Danger

#4
February 11, 2023, 12:39:04 PM
Quote from: The Spaniard on February 11, 2023, 10:27:38 AM
BofA criticizing someone else for questionable business practices?  Now that's funny!

Right?!?
I start from his boots and work my way up. It takes a good half a roll to encompass his jolly round belly alone. Soon, Father Christmas is completely wrapped in clingfilm. It is not quite so good as wrapping Roy but it is enjoyable nonetheless and is certainly a feather in my cap.

GhostNinja

#5
February 11, 2023, 01:03:52 PM
Quote from: Danger on February 11, 2023, 12:39:04 PM
Quote from: The Spaniard on February 11, 2023, 10:27:38 AM
BofA criticizing someone else for questionable business practices?  Now that's funny!

Right?!?

BOFA saying that is like Wells Fargo saying that someones practices are shady.   Yeah, Wells Fargo, the bank that opened phantom accounts for people without their knowledge
Ghostninja

The Spaniard

#6
February 11, 2023, 01:07:45 PM
Quote from: GhostNinja on February 11, 2023, 01:03:52 PM
Quote from: Danger on February 11, 2023, 12:39:04 PM
Quote from: The Spaniard on February 11, 2023, 10:27:38 AM
BofA criticizing someone else for questionable business practices?  Now that's funny!

Right?!?

BOFA saying that is like Wells Fargo saying that someones practices are shady.   Yeah, Wells Fargo, the bank that opened phantom accounts for people without their knowledge

Yea, they're both terrible.  Unfortunately I know a ton of people who work for both here in Charlotte.

~

#7
February 11, 2023, 01:17:01 PM
Wow, now that's how you do some laundry!

Cathode Ray

#8
February 11, 2023, 04:41:06 PM
One way to circumvent many paywalls (but not all) is to click "print view" at the right end of the Firefox URL bar.
Creator of Radical High, a 1980s RPG.
DM/PM me if you're interested.

honeydipperdavid

#9
February 11, 2023, 10:30:29 PM
The problem with D&D for monetization is the laziness of D&D as a whole and their own self imposed kommisar sensitivity reader requirements.  They are not putting in cunts who have no fucking clue what a RPG is but that damn midwit can recite Beverly DeAngelo and Xindi X Khandi.  If D&D went back to paper modules again and putting out a large amount of higher quality modules, including chained modules for a year, they'd make more money than the glue bound tomes of shit they are selling today.

Grognard GM

#10
February 11, 2023, 11:05:55 PM
Quote from: honeydipperdavid on February 11, 2023, 10:30:29 PM
The problem with D&D for monetization is the laziness of D&D as a whole and their own self imposed kommisar sensitivity reader requirements.  They are not putting in cunts who have no fucking clue what a RPG is but that damn midwit can recite Beverly DeAngelo and Xindi X Khandi.  If D&D went back to paper modules again and putting out a large amount of higher quality modules, including chained modules for a year, they'd make more money than the glue bound tomes of shit they are selling today.

Like most modern corpos, Twitter has convinced them that there's a vast untapped majority out there (actually composed of penniless ultra-minorities), if they can just get rid of their old dinosaur fans. The fact that the dinosaur fans spend a fortune, have decades left to live, and often have kids they want to share the hobby with, doesn't matter. They hunger for the $9.99 plushie they can sell to an polyamorous non-gendered Otherkin.
I'm a middle aged guy with a lot of free time, looking for similar, to form a group for regular gaming. You should be chill, non-woke, and have time on your hands.

See below:

https://www.therpgsite.com/news-and-adverts/looking-to-form-a-group-of-people-with-lots-of-spare-time-for-regular-games/

Spinachcat

#11
February 12, 2023, 12:18:48 AM
Hasbro stock crash? Tasty!

Anything that harms WotC is good for the RPG hobby long term.

Insane Nerd Ramblings

#12
February 12, 2023, 04:57:14 AM
Quote from: honeydipperdavid on February 11, 2023, 10:30:29 PMIf D&D went back to paper modules again and putting out a large amount of higher quality modules, including chained modules for a year, they'd make more money than the glue bound tomes of shit they are selling today.

Yea, I don't get why they cannot grasp smaller (relatively) cheaper modules with good content, say a dozen in a year each going for like $15 each, would likely be better for the market instead of 4-5 books a year going for $50 each. Besides, the modules they put out now, beyond being atrocious from a gameplay standpoint, all have that vapid corporate art that is bland AF.
"My political opinions lean more and more to Anarchy (philosophically understood, meaning abolition of control not whiskered men with bombs)" - JRR Tolkien

"Democracy too is a religion. It is the worship of Jackals by Jackasses." HL Mencken

Jam The MF

#13
February 12, 2023, 05:52:28 AM
WOTC is caught up in a glorious fuster cluck of their own making; and they now have no good way out, so it's full steam ahead in the name of being woke allies.
Let the Dice, Decide the Outcome.  Accept the Results.

Steven Mitchell

#14
February 12, 2023, 06:23:29 AM
Quote from: Insane Nerd Ramblings on February 12, 2023, 04:57:14 AM

Yea, I don't get why they cannot grasp smaller (relatively) cheaper modules with good content, say a dozen in a year each going for like $15 each, would likely be better for the market instead of 4-5 books a year going for $50 each. Besides, the modules they put out now, beyond being atrocious from a gameplay standpoint, all have that vapid corporate art that is bland AF.

Well, two problems:

- A string of modules is not all that productive, because not many people will buy them all, and that means you are cannibalizing your own sales.

- They wouldn't know "good content" if it bit them in the ass.  It's a lot easier for the marketing department to gear up to sale you bad content in bigger units, and hope enough units move before the reputation catches up.  Think what would happen with some films if you paid for it a third at a time, and could walk out if you didn't like the first third.

They sale their content in $50 hardbacks because that's the only way they can make any money with that content.  Which as I've been saying for years now, ought to tell people something. 
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