Once a fringe fixture of comic-book stores and hobby emporiums, a trading-card game has become a powerhouse in the toy industry — and it is doing it while the rest of the aisle shrinks.
The divergence
Sales of traditional toys have been under pressure for years, driven by declining birthrates and a shift toward video and online games. Sales of dolls are down 36% from 2021 to 2025, according to intelligence firm Circana, and toddler and preschool toys are down 15% over the same period. Games and puzzles — the segment that includes Magic — are up 36% over that time frame, helped by an audience that is typically older, increasingly includes adults, and is more likely to make repeat purchases.
Magic has been among the biggest hits in the category. Revenue from the franchise grew an average of 17% a year for the past 17 years, and Chief Executive Chris Cocks said last week that Magic is “off to a ripping start” this year, with sales up 34% in the first half to over $1 billion. A new series of cards based on Marvel superheroes set a record for first-day and first-month sales, becoming the fastest set to reach $300 million in revenue. “Step back and look at Magic over any real horizon, and you see one of the most consistent, compounding franchises in entertainment, a genuine peer to the biggest names in gaming,” Cocks said on an earnings call. “Magic is not a niche hobby business. It is a mega franchise.” The latest results sent Hasbro (HAS) shares up 8.8%, their biggest gain in more than a year.
Why the economics work
Created by mathematician Richard Garfield and first published by Wizards of the Coast in the early 1990s, Magic found success selling cards through thousands of local game stores around the world. Hasbro acquired Wizards in 1999 and says more than 50 million people have played. Cocks ran Wizards for six years before becoming Hasbro CEO in 2022; the unit, which also houses Dungeons & Dragons, has roughly doubled its revenue on his watch, partly by licensing blockbuster franchises so a player can build a deck mixing characters from Marvel, Lord of the Rings and Teenage Mutant Ninja Turtles.
The price architecture is the point. A starter box runs about $29.99, but many customers then buy special box sets at $50 or more, and others chase coveted cards through booster packs at roughly $5 to $7 each. Fans play and collect for years. “This is not just a fad that just showed up,” said Arpiné Kocharyan, a UBS analyst who tracks the toys and games industry, noting the brand’s “very successful collaborations with some of the best trophy franchises of the world…These franchises pull in collectors as well as players beyond your core, hardcore hobby-store gaming player.”
Collectible small luxuries with a subscription cadence — the same thesis behind the salty-snack and discount-retail work we have run all month, with materially better gross margins. A $5 booster pack bought weekly for twenty years is a recurring-revenue business that happens to be printed on cardboard, and a franchise that has compounded 17% a year for seventeen years is not a fad, whatever the shelf next to it is doing. Action: HOLD via index. We do not take single-name positions in toy makers; the franchise is the moat and the rest of the toy aisle is the tax you pay to own it inside a diversified company. Filed as confirmation of a consumer theme, not as a new position.
Hasbro (HAS)
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