Hasbro CEO raves about performance of its Fallout cards, but notes Bethesda’s IP was expensive

Magic: the meetingThe recent Fallout-themed set of cards is the franchise’s “best-performing Commander set ever,” according to Hasbro CEO Chris Cocks. The announcement, made Wednesday during an earnings call with investors, draws attention to the potential of the trading card games’ ambitious Universes Beyond initiative. But it also highlights the risks of working with intellectual property licensed from other companies.

After successful experiments with The Walking Dead and Godzilla themed cards Magic: the meeting, the Universes Beyond initiative formally launched in February 2021. The first wave of crossover maps included franchises like Warhammer 40,000 and Doctor Who. While all of these sets sold well, it was the Lord of the Rings set that turned heads in the C-suite. It generated more than $200 million in revenue in less than six months, which Hasbro says is more than double the benchmark of other historically high-performing sets.

Now the Rhode Island-based company plans to produce two similarly sized sets each year. This means that significant costs must be incurred to license the best IP address.

The Fallout maps, released in May, were well timed to take advantage of the launch of the Fallout streaming television program on Amazon. But Cocks was quick to note that this wasn’t a Lord of the Rings-sized victory for Hasbro.

“I would say Fallout has been a great set,” Cocks said. “It’s probably our best performing Commander set ever, whether it’s a Universes Beyond set or not. However, Commander sets are usually a lot smaller than our general premier sets, so you have to take that into account.”

The Commander format generates far less revenue for Hasbro than its “premier” sets – that is, the larger multiformat sets designed for multiple communities within its player base. Weighed against the Fallout licensing costs from its owners at Bethesda, the Fallout set likely generated less revenue for the company compared to The Lord of the Rings.

The next Universes Beyond release, scheduled for 2024, will be Assassin’s Creed, and some of the revenue from those cards will have to go to the IP owner, Ubisoft. The same goes for the next two Universes Beyond sets scheduled for 2025: Marvel (owned by Disney) and Final Fantasy (owned by Square Enix).

Can any of these three sets compete with The Lord of the Rings? Cocks seems to think so, and his message to investors is that the revenue from the sale of those cards will exceed the cost of licensing the IP – possibly to a greater extent than was the case with The Lord of the Rings.

“I think Final Fantasy and Marvel are going to be pretty important sets,” Cocks said. “I would certainly put them in the same category as what we saw with Lord of the Rings.”

The reasons are clear, according to Cocks: Marvel has a huge international fandom and Hasbro has signed a multi-set deal with Disney, meaning it will have several bites at the apple. Final Fantasy, on the other hand, is also big in the US and Europe, but even bigger in Japan.

“Our sales in Japan will probably pale in comparison to what we did with Lord of the Rings,” Cocks said, “because of the resonance that (Final Fantasy) has in that market – which, you have to remember, is the No. 2 market for Magic. and the No. 2 market overall for trading card games.”

The cost of licensing IP places a greater emphasis on the performance of Hasbro’s own cards built with its internal IP. These sets essentially have lower overhead costs to produce. Cocks said he was still waiting to see how the company’s latest in-house set, Outlaws of Thunder Junction, performs. The irony here, of course, is that Hasbro is simultaneously using licensed IP to boost game sales, but also hoping to license its own IP for video games, movies, and other media projects.

“I think what you’re seeing in the first quarter is kind of our overall strategic thesis,” Cocks said, “that Hasbro is basically a games, IP and toy company, in that order.”

The trick is to ensure that Hasbro puts as much effort into its homebrew IP, thereby making it as attractive as possible to other developers and publishers.