Hasbro’s stock prices took a dive after Bank of America analysts found it was overprinting and overpricingMagic: The Gatheringcards. Bank of America claimed Hasbro was ruining the long-term value ofMagic: The Gatheringwith its overly-aggressive business model.Magic: The Gatheringis produced by Wizards of the Coast, a subsidiary of Hasbro, one of the largest toy and entertainment companies on the market. In addition to the collectible card game,Wizards of the Coast also producesDungeons and Dragons, the popular tabletop role playing game.RELATED:Assassin’s Creed, Final Fantasy, and Fortnite Are Coming to Magic: The GatheringThe toy company giant’s stock dipped 5.2% after having its status downgraded twice, from “buy” to “underperform.” This downgrade came after Bank of America conducted a deep dive intotheMagic: The Gatheringbusiness modeland found it was sabotaging its own value. By printing too many cards too quickly and pricing them too aggressively, its market threatens to become oversaturated, with too much supply and not enough demand.
Stock market analysts use a three-tier system when rating stocks:
Hasbro’s double-downgrade from the highest to the lowest tier of stock value means many investors may pull out from the company, causing many long-term problems in the process. If it is unable to bounce its market back, it could impact theproduction of other Hasbro and Wizards of the Coast products.
ManyMagic: The Gatheringfans have been warning Wizards of the Coast of this exact thing for years now. In the past, it would be typical forMagic: The Gatheringto release between three and five products in a given year. However, in 2022 alone,Magic: The Gatheringhas released over a dozen physical products. Though not all of them are full sets, many include unique new cards or rare reprints that are prized by many collectors. To make matters worse, theprices of theseMagic: The Gathering productshave been steadily rising over the years.
This has causedfinancial burnout with manyMagic: The Gatheringfans, who simply cannot keep up with the rate Wizards of the Coast is releasing products. These players have been beggingMagic: The Gatheringto slow down for years. Now that Bank of America has done the same–with a major monetary penalty to go with it–perhapsMagic: The Gatheringplayers and their wallets might get some relief over the next few years.
