Hasbro Seeks Tariff-Free Toys Due to Continued Popularity of Magic: The Gathering Cards
Hasbro's Wizards of the Coast, the publisher behind popular franchises such as Magic: The Gathering, is experiencing limited tariff exposure, according to CEO Chris Cocks. In a recent investor call, Cocks stated that the company is well-positioned in the current global trade circumstances. Contributing factors include the digital nature of its games business, domestic production of most board games, and low tariff exposure for Wizards of the Coast.
The majority of the tariffs, which were implemented by the Trump administration and partially reversed, have affected China, which remains a major manufacturing hub for Hasbro. The only Wizards-related import from China is the boxed sets for the tabletop game Dungeons & Dragons. Despite this, Hasbro is managing more complex logistics and advocates for a more predictable and favorable U.S. trade policy environment.
Cocks expressed concern about prolonged tariff conditions, stating that they could lead to higher consumer prices, potential job losses, and reduced profits for shareholders. However, the CEO stated that Hasbro's guidance remains unchanged, supported by the robust performance of its games and licensing businesses and the company's strategic flexibility.
The Magic: The Gathering franchise, which has seen a surging business for the first quarter of 2025-2026 and attributed to the division's 46% revenue growth, is expected to help mitigate some of the tariff impacts on sales. This is due to the card game's continued strength in licensing, particularly the upcoming crossover with Final Fantasy, which has already broken sales records with pre-orders.
While tariffs present a challenge for Wizards of the Coast and Magic: The Gathering sales, the brand's strong market position and the company's mitigation strategies should help manage the impact. Hasbro employs an "asset-light sourcing model," which allows for rapid shifts in production to mitigate tariff impacts. The company is also accelerating its $1 billion cost savings plan to offset tariff pressures.
Sources:1. Hasbro's Investor Call2. Hasbro Investor Presentation - Q1 Earnings Call Q&A (pages 8-10)3. Hasbro Q1 2023 Earnings Results4. Hasbro's Annual Report 20225. Reuters - How Hasbro is managing tariffs
- The "asset-light sourcing model" employed by Hasbro is intended to help manage tariff impacts, allowing for quick shifts in production.
- In the face of tariffs, Hasbro is also speeding up its $1 billion cost savings plan to counteract the pressure.
- Despite tariffs affecting China, where Hasbro primarily manufactures, the only Wizards-related import from China is for the boxed sets of Dungeons & Dragons.
- The continuing growth of the Magic: The Gathering franchise, particularly its licensing business with the upcoming Final Fantasy crossover, should help limit the tariff impact on sales.
