Toy industry pressures make digital the star
The gap between rival toy manufacturers is widening hasbro And Mattel — thanks in part to a 30-year-old trading card game.
Toy giants have been dominating the space for decades, vying for the most coveted master licenses to put new fan favorites (Disney princesses and “Star Wars” characters among them) on store shelves. However, as the industry recovered after a period of declining sales, Hasbro was the winner on Wall Street.
For fiscal 2025, Hasbro reported a 14% revenue increase to $4.7 billion, while Mattel reported a 1% decline in net sales to $5.3 billion.
Even though Mattel’s revenue exceeds Hasbro’s, its growth remains stagnant, according to Eric Handler, managing director and senior research analyst at Roth Capital Partners.
“[Mattel’s] “Revenue has been in a very narrow range for the last five years, and on an organic basis, 2026 is the same,” he said.
Mattel shares are trading around $17, down more than 20% in the last 12 months. Meanwhile, Hasbro’s shares are up nearly 46% over the same period, and shares are trading around $100.
Of course, Hasbro’s post-pandemic journey was not without its own unique winds. The company’s revenue took a hit during this period eOne divests film and TV business. Also includes the entertainment segment, which includes film and TV licenses deeply affected With Hollywood’s dual labor strikes in 2023.
“Despite market volatility and a changing consumer landscape, we have returned this company to meaningful growth,” Hasbro CEO Chris Cocks told investors on an earnings call earlier this month.
Throughout these changes, a key part of Hasbro’s business has been growing steadily: Wizards of the Coast.
A pinch of Magic
The Hasbro division includes Dungeons & Dragons, Magic: The Gathering, and the company’s portfolio of digital and video games.
In 2025, Wizards’ revenue rose 45% to $2.1 billion, driven by sales of sets tied to Magic’s Universe Beyond and smaller, limited-edition Secret Lair packs, some of which sold for close to $200.
While the segment accounts for less than half of the company’s revenue, it represents 88% of its adjusted profit.
Magic: The Gathering playing cards form a light fixture at Wizards of the Coast headquarters on September 11, 2025 in Renton, Washington. With traditional toy and game sales lagging, Hasbro has found a growth engine in role-playing games like Dungeons and Dragons, trading card games like Magic: The Gathering, and its growing portfolio of digital and video games.
Bloomberg | Bloomberg | Getty Images
Created in 1993, the strategic card game Magic typically involves two players going head-to-head using special decks of collectible cards to cast spells, release creatures, or use artifacts to defeat their opponents.
Over the last five years, Hasbro has expanded beyond the first game’s story and released card sets based on third-party intellectual property, such as “Avatar: The Last Airbender,” Marvel’s “Spider-Man” and “Lord of the Rings.”
These sets are not only popular among longtime Magic fans, but also serve as a gateway to the world of Magic for consumers from other fanbases. In mid-2025, Hasbro released the “Final Fantasy” set, which became the fastest-selling expansion pack in the history of Magic: The Gathering. 200 million dollars On sale in a single day.
“They’ve done a great job of expanding the funnel over the last few years and it’s become a multi-generational product,” Handler said. “The player base is growing. It’s a sticky player base that’s eager for new products and new ways to play.”
According to Cocks, more than 1 million unique players have participated in organized games (i.e. sanctioned tournaments) by the end of 2025. That’s a 22 percent increase year-on-year, he said.
Additionally, the number of game stores hosting events called Wizards Play Network increased by 20% compared to 2024, reaching over 10,000.
“Taken together, this strengthens our confidence in Magic’s long-term growth,” Cocks said on the company’s earnings release. “We are building a gaming system with multiple entry points, product types, and interaction paths that is positioned to continue driving growth into 2026 and beyond.”
Hasbro plans to release new Magic sets based on “The Hobbit,” “Teenage Mutant Ninja Turtles” and “Star Trek” in 2026.
The company is forecasting mid-single-digit growth in its Wizards business in 2026, but DA Davidson vice president and research analyst Keegan Cox said that forecast was “conservative” in a research note released shortly after the company’s earnings.
digital border
Hasbro’s Wizards unit also produced “Monopoly Go!” This includes the digital and licensed gaming space, where revenues are up 6% in 2025, fueled by the success of the game.
Cocks has previously noted that modern consumers and modern games are increasingly moving to online forums, and that the company is opening new games and a personal video game studio in Montreal to increase play.
While Hasbro’s digital game division is growing, Mattel is just launching its own digital unit.
Earlier this month, Mattel announced it would acquire partner NetEase from its 50% stake in the company. Mattel163 joint ventureassumes full ownership of the business. Mattel163 develops digital games based on the toy company’s brands and has released four digital games since 2018: Uno, Uno Wonder, Phase 10 and Skip-Bo.
“In our opinion, [Mattel] Prosecutor Davidson’s Cox wrote that Hasbro is in the early stages of an investment similar to the one it made in the gaming industry seven years ago. [Mattel] We will seek to compete with Hasbro…we believe [Mattel] “Based on their IP, they can make successful mobile games and should increase their profit margins over time.”
An industry in flux
Mattel’s move to digital comes at a time when its two flagship brands are struggling to sell.
Handler stated that “Barbie, like Fisher-Price, experienced a significant decline.” “This negates a lot of the good news about Hot Wheels.”
Gross billings in the vehicles division rose 11% in 2025, while the doll segment fell 7% and the infant, toddler and preschool space fell 17%.
This segment of the youngest consumers has been in decline for more than a decade as a result of declining population growth and children being introduced to electronics at an earlier age in their development. Changing play habits mean toy manufacturers must adapt quickly.
But there is hope for Mattel and the toy industry as a whole. According to Circana’s data, total annual dollar sales in the US increased by 6% in 2025. And perhaps more importantly, the number of products sold rose 3%, quelling fears that price-conscious consumers were abandoning toy purchases.
“Unit sales growth I think is the most important metric we can look at,” said James Zahn, senior editor of The Toy Insider and The Toy Book. “If unit sales are down, then you know people are actually buying less, and that hasn’t happened.”
Mattel and Hasbro, among other toy companies, are expected to get a boost from a strong movie calendar this year.
Two of Mattel’s own brands are represented at the box office; “Masters of the Universe” will be released in June and “Matchbox” in October. While Mattel may not see a huge increase in ticket sales, toy sales may increase. After all, the release of “Barbie” in 2023 is a There was a 16% increase in the baby’s gross receipts in the quarter following its theatrical release.
Mattel also owns the master toy licenses for “Toy Story” and Disney princesses; That means it will handle the bulk of the merchandise for “Toy Story 5” and the live-action “Moana.”
Hasbro will have toy lines for “The Mandalorian and Grogu,” “Spider-Man: Brand New Day” and “Avengers: Doomsday.”
Mattel and Hasbro also collaborated on the highly anticipated product line. of Netflix hit animated movie “KPop Demon Hunters”, promising dolls, foam role-play items, games and plush items.
“‘KPop Demon Hunters’ will do great business for both Hasbro and Mattel,” Zahn said.
