Hasbro vs Mattel: How Magic: The Gathering Fuels Growth in a Shifting Toy Market

The toy industry is undergoing a significant shift, and the battle for dominance between Hasbro and Mattel is illustrating that change. While both companies have historically relied on licensing popular entertainment franchises, Hasbro is increasingly pulling ahead, fueled by the unexpected strength of its gaming division, particularly the trading card game Magic: The Gathering.

For decades, Hasbro and Mattel have competed for lucrative master licenses – the rights to produce toys based on blockbuster properties like Disney’s princesses and the Star Wars franchise. However, recent financial results demonstrate a clear divergence in performance. In fiscal year 2025, Hasbro reported revenue gains of 14%, reaching $4.7 billion, while Mattel experienced a 1% decline in net sales, totaling $5.3 billion. Despite Mattel’s larger overall revenue, its growth has stagnated, a trend analysts don’t anticipate reversing quickly.

“[Mattel’s] revenue has been in a very tight range for five years now, and 2026, on an organic basis, is the same,” noted Eric Handler, managing director and senior research analyst at Roth Capital Partners. This lack of growth is reflected in the companies’ stock performance. Over the past 12 months, Mattel shares have fallen by more than 20%, trading around $17, while Hasbro’s stock has surged approximately 46%, reaching around $100.

A Dash of Magic

The key to Hasbro’s success lies within its Wizards of the Coast division, home to Magic: The Gathering and Dungeons & Dragons. In 2025, Wizards’ revenue exploded by 45% to $2.1 billion, contributing a remarkable 88% of Hasbro’s adjusted profits. This performance underscores the power of a well-established and strategically expanded gaming franchise.

Magic: The Gathering, created in 1993, has evolved beyond its core base of dedicated players. Hasbro has successfully broadened its appeal through collaborations with popular franchises, including “Avatar: The Last Airbender,” Marvel’s “Spider-Man,” and “Lord of the Rings.” The release of the “Final Fantasy” set in mid-2025 proved particularly successful, generating $200 million in sales in a single day, demonstrating the potential of leveraging existing fanbases to attract new players.

“They have done a fantastic job of widening the funnel in the last couple years, and it’s become a multigenerational type of product,” Handler said. “The player base is growing. It’s a sticky player base that is showing eagerness with new products and new ways to play.”

Hasbro is actively fostering this growth through organized play. The number of unique players participating in sanctioned tournaments increased by 22% year-over-year in 2025, exceeding 1 million. The company has also expanded its Wizards Play Network, increasing the number of game stores hosting events by 20% to over 10,000 locations. Hasbro CEO Chris Cocks expressed confidence in Magic’s long-term growth, citing a “system of play with multiple entry points, product types, and engagement paths.”

Looking ahead to 2026, Hasbro plans to launch new Magic sets based on “The Hobbit,” “Teenage Mutant Ninja Turtles,” and “Star Trek,” signaling a continued commitment to expanding the game’s reach.

The Digital Frontier

Beyond the success of Magic: The Gathering, Hasbro’s Wizards unit is also benefiting from growth in the digital and licensed gaming space, with revenues increasing by 6% in 2025, largely driven by the popularity of “Monopoly Go!” This reflects a broader trend of consumers increasingly engaging with entertainment and play in online environments.

In contrast, Mattel is only now establishing a dedicated digital gaming unit. Earlier this month, the company announced its acquisition of NetEase’s 50% stake in their Mattel163 joint venture, taking full ownership of the business. Mattel163 develops digital games based on Mattel’s brands, having launched four titles to date: Uno, Uno Wonder, Phase 10, and Skip-Bo.

D.A. Davidson’s Keegan Cox noted that Mattel’s move is akin to Hasbro’s investment in gaming seven years ago, and while not aiming to directly compete with Hasbro’s scale, believes Mattel can successfully develop mobile games based on its intellectual property, contributing to profit margins over time.

An Industry in Flux

Mattel’s digital push comes as some of its core brands face challenges. Sales of Barbie and Fisher-Price have been declining, partially offsetting the gains made by Hot Wheels. The dolls segment fell 7% in 2025, while the infant, toddler, and preschool space slipped 17%.

The decline in the infant and preschool segment is a long-term trend, attributed to factors such as shrinking population growth and the earlier introduction of electronic devices to young children. This shift in consumer habits necessitates adaptation from toy manufacturers.

Despite these challenges, the overall toy industry showed signs of recovery in 2025, with total annual dollar sales in the U.S. Increasing by 6%. Importantly, unit sales also rose by 3%, alleviating concerns about consumers cutting back on toy purchases due to economic pressures.

“Unit sales being up, I think, is the most important metric we can look at,” said James Zahn, senior editor of The Toy Insider and The Toy Book. “If unit sales were down, that’s when you know people are really buying less, and that didn’t happen.”

Both Mattel and Hasbro are poised to benefit from a strong theatrical release schedule in 2026. Mattel has films based on “Masters of the Universe” and “Matchbox” slated for release, while Hasbro will have toy lines tied to “The Mandalorian and Grogu,” “Spider-Man: Brand New Day,” and “Avengers: Doomsday.” The success of the 2023 “Barbie” movie, which contributed to a 16% increase in Barbie doll sales in the subsequent quarter, demonstrates the potential impact of film releases on toy sales.

both companies are collaborating on a product line for Netflix’s animated film “KPop Demon Hunters,” promising dolls, roleplay items, games, and plush toys. Zahn predicts this collaboration will be a significant success for both Hasbro and Mattel.