Hasbro's stock recently took an unexpected fall this week after a Bank of America analyst issued a negative outlook about Magic: The Gathering's relentless release schedule and strategy. The toy company's stock dropped nearly 10% after analyst Jason Haas downgraded Hasbro's stock outlook from "buy" to "underperform".
According to the analyst, this rare "double-downgrade" rating was due to a deep dive on the company's recent strategy on its MTG releases, pointing out that the deluge of products being launched was flooding the market. "Hasbro is overproducing Magic cards which has propped up recent results," Haas explained. "Card prices are falling, game stores are losing money, collectors are liquidating and large retailers are cutting orders."
While the popular trading card game was recently touted as being Hasbro's first "billion dollar brand" and currently makes up about 15% of Hasbro's overall sales, Haas explains that Magic: The Gathering's growth has not been because of an expansion of its player base, but rather by focusing on its existing players. "Magic has grown primarily by extracting more revenue from each player rather than by growing its player base," Haas wrote.
Haas mirrored much of the recent criticism about MTG's recent releases. In addition to the limited edition print-on-demand Secret Lair drops, Hasbro's publisher Wizards of the Coast also announced the $999 30th Anniversary Edition, which contains reprints of several rare "Restricted" cards such as the super-expensive Black Lotus and other cards from the Limited Edition Beta set.
"Not only is the price excessively high," Haas wrote. "But the set also includes Reserved List cards which Hasbro had promised to never reprint. This has created panic among collectors and we're seeing collections being liquidated now that the scarcity value of Magic is in question."
Now, people in the Magic community and fans of trading card games in general have shared their reactions to the analyst's outlook, with many agreeing to the criticism while some fans defended the future of MTG, saying that the card game is going to be fine.
You can check out their reactions from Twitter below:
Is Hasbro killing its "golden goose"?
MTG community's voices finally "getting recognized"?
Why are people shocked about Hasbro's stock drop?
Only retailers and distributors are affected?
Players are not buying "any of the new shit"?
Bank of America's forecast is "extremely basic"
Related: Magic: The Gathering Misprints in Unfinity Causing Huge Problems For Players
Do you agree or disagree with Bank of America's forecast? Let us know what you think on the MTG Rocks Facebook page.
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