Hasbro -- October 18, 2023

Locator: 45808INV.

I don't even know where to begin.

For me, this may simply be the biggest tech story of the day, for the week? The reason for the excitement was buried deep in the story.

Hasbro.

From the linked Barron's story:

Videogame players have rushed to join the imaginary world that exists inside Baldur’s Gate 3, but the likely financial impact of the game on Hasbro is no fantasy at all.

Baldur’s Gate 3, the videogame version of Dungeons & Dragons, has taken both the gaming world and social media by storm since it was released on Aug. 3. The videogame was created by developer Larian Studios, but Hasbro stands to gain nonetheless because its Wizards of the Coast unit owns the widely popular tabletop version of the role-playing game. Analysts surveyed by FactSet expect the company to report third-quarter Wizards of the Coast and Digital gaming revenue of $390 million on Oct. 26, which is a jump from the same period last year’s $304 million. Franchise brand sales for the quarter are expected to be $1.02 billion, up from last year’s $814 million.

“We will likely make more money on Baldur’s Gate 3 than we have made on all of our film licensing for the last five to 10 years, combined,” Hasbro Chief Executive officer Chris Cocks said on the company’s second-quarter earnings call in August. That includes movies like Dungeons & Dragons: Honor Among Thieves, as well as recent Transformers and G.I. Joe films.

Jefferies analyst Andrew Uerkwitz wrote in a research note Tuesday that he expects management to offer more detail on the outlook for videogame-related revenue when it discloses the third-quarter results. He said he is “positively biased for management commentary regarding the WOTC [Wizards of the Coast] segment.”

Hasbro could use the good news. Analysts expect the company to post third-quarter revenue of $1.657 billion, which would be down from $1.676 billion a year earlier.

“They are refocusing on their core product lines—the toys and games—looking into their licensing, and really looking for new ways to reconnect with consumers coming off of the pandemic-fueled sales boom that the greater industry also benefited from, and essentially a terrible holiday season last year across the board where there were inventory jam ups,” Zahn said.