“Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” said Hasbro CEO Chris Cocks.
For the full year, the company foresees revenue hitting $5.86 billion, down 9% compared to 2021. “While the full year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses,” Cocks said.
The layoff of around 15% of its global workforce comes as the company seeks to save between $250 million and $300 million annually by the end of 2025. Hasbro said it expects fourth-quarter revenue, which includes the holiday season, to reach $1.68 billion, down 17% compared to the year-earlier period. Estimates had called for Hasbro to reach $1.92 billion during the quarter, according to data from Refinitiv.
The company has faced revenue woes in recent quarters, as it contends with tough comparisons with pandemic-fueled toy sales, inflation weighing on consumers wallets and high levels of inventory.
Wizards of the Coast, which includes Dungeons and Dragons, Magic: The Gathering and digital gaming, will remain a bright spot, the toymaker said. The company expects the division to have generated $339 million in revenue during the fourth quarter, up 22% compared to last year, and reach $1.33 billion in revenue for the full year, up 3% from 2021.
Hasbro said it still intends to create a new open game license, or OGL, but that it will not include a royalty structure or give itself access to intellectual property made by third-party content creators. The company is set to report its fourth-quarter earnings Feb. 16.
The division recently came under fire from fans after Hasbro attempted to rewrite a two-decade-old open game license for Dungeons and Dragons in order to boost revenue. Earlier this month, the Rhode Island-based toymaker postponed its update of its licensing terms in order to address mounting concern from the D&D community, which largely viewed the proposed changes as overreaching and unfair to third-party content creators.
