Wizards of the Coast has built a house of cards. The company, a unit of toy behemoth Hasbro, is best known for trading card game Magic: The Gathering, which is available in several languages. Wizards of the Coast's other products include the granddaddy of medieval role-playing games (Dungeons & Dragons) and a variety of traditional games, books, and magazines. The company also makes Star Wars and Zynga games through licensing agreements. Through the years, Wizards of the Coast's hobby games have earned a cult following, with children and teens still playing the firm's games with friends into their adulthood. Peter Adkison, game designer Richard Garfield, and several others founded the company in 1990.
Based in Washington, Wizards of the Coast sells its entertainment products worldwide.
Wizards of the Coast is a subsidiary of games giant Hasbro. Gaming, specifically, contributed some 32% of its parent's fiscal 2013 net sales. The US and Canada, where Wizards of the Coast primarily sells its products, accounted for 48% of Hasbro's sales during the reporting period.
While parent company Hasbro does not break out separate financials for Wizards of the Coast, its games business generated 10% sales gains while Hasbro revenue in the US and Canada dropped by 4% in fiscal 2013 as compared to 2012. Lower volumes in its North American markets in 2013 contributed to revenue declines while the US and Canada segment saw growth in franchise brands. Higher net revenues for girls and games products offset sales slips among the parent company's boys and preschool products in 2013 vs. 2012.
With Dungeons & Dragons and Magic products representing the cornerstone of the company's and its parent's products portfolio, Hasbro is focused on key growth strategies. Specifically for Wizards of the Coast, Hasbro has staffed up to support its push for innovation among its top products. While Hasbro is squeezing a profit out of its overall business, the games maker is investing in product development at its Wizards of the Coast subsidiary. The company is further supported by Hasbro's Gaming Center in Rhode Island, which is where it concentrates on marketing and development, as well as re-imagining, re-inventing, and re-igniting core brands. In 2014, the company released the Dungeons & Dragons Fifth Edition Starter Set in Australia and New Zealand. It's also focused on innovation across its Magic series and creating memorable in-store experiences for customers.
Wizards of the Coast enjoys lucrative licensing agreements. The company stays busy creating brand extensions using the Star Wars name as it leverages Hasbro's deep brands portfolio. Through a global partnership with social network Zynga, inked in 2012, Wizards of the Coast is developing games for Zynga's Farmville and Cityville.
Sales and Marketing
Particularly through its Dungeons & Dragons and Magic franchises, Wizards of the Coast serves a lifestyle gamer rather than one who looks to gaming as occasional entertainment.
A multichannel marketer, Wizards of the Coast sells its products through internet-based retailer, wholesalers, distributors, chain stores, discounters, mail order houses, catalog stores, department stores, and other traditional retailers. Distributors include the likes of ACD Distribution, Alladin Distributors, Alliance, Diamond Comic Distributors, and GTS Distribution.
Uber retailers Wal-Mart, Target, and Toys "R" Us remain top customers, generating nearly half of Hasbro's sales. Hasbro promotes Wizards of the Coast and its other games properties through its Family Game Night marketing campaign, as well as by offering consumers other ways to interact with its brands. Outside the retail world, Wizards of the Coast is also working to capture the attention of younger readers by ensuring that their books are in US schools and libraries.
At one time the firm operated about 85 Game Keeper and Wizards of the Coast stores, but parent Hasbro closed them all due to ongoing sales declines and refocused Wizards of the Coast as a game developer and designer.