Hasbro is no longer a toy company with a games side business. Its second-quarter results make that plain: the $1.14 billion in net revenue it reported, up 16% year over year, was carried by Wizards of the Coast and Digital Gaming, where sales jumped 27% to $664 million GuruFocus via Yahoo Finance. Within that segment, Magic: The Gathering alone grew 32% in the quarter and, for the first time in its three-decade history, generated more than $500 million in a single quarter Retail Dive.
The milestone matters because trading-card games have become high-frequency, high-margin recurring-revenue platforms. Magic is doing it through regular set releases, organized play, and digital extensions on MTG Arena. First-half Magic revenue reached $604 million, and CEO Chris Cocks called the property "off to a ripping start" as Hasbro raised its full-year outlook Retail Dive. The company now expects 2026 revenue growth of 5% to 7% on a constant-currency basis, adjusted EBITDA of $1.45 billion to $1.50 billion, and at least $200 million in cost savings, up from a prior $100 million target GuruFocus via Yahoo Finance.
Yet the headline strength masks a lopsided business. Operating profit rose 14% to $282 million, but the adjusted operating margin contracted roughly 40 basis points to 24.8%, and adjusted EPS slipped 2% to $1.28 after a $56 million non-cash write-down on digital games scheduled for 2028 and beyond GuruFocus via Yahoo Finance. Consumer Products grew 5% to $463 million, marking a third consecutive quarter of growth, while Entertainment revenue collapsed 20% to $12.8 million GuruFocus via Yahoo Finance.
For operators, the read is straightforward: Hasbro's capital-light, IP-driven games model is working, while its film and TV bets are not. The company reinforced that strategic bet with a multi-year Nintendo licensing deal for The Legend of Zelda, expected to launch in 2027 GuruFocus via Yahoo Finance. The question heading into next year is whether Magic's momentum is durable enough to offset a shrinking Entertainment segment and a Consumer Products business that is only modestly recovering.
There are also macro headwinds to watch. Management flagged oil prices and trade policy as risks, and the write-down shows that not every digital gaming bet is paying off GuruFocus via Yahoo Finance. For now, though, Hasbro's playbook is clear: keep Magic fed with new sets and partnerships, squeeze costs, and let the entertainment assets shrink until they can stand on their own.