Hasbro, Inc. (HAS) Earnings Call Transcript & Summary

Thanks for joining us today, everyone. I'm Arpine Kocharyan, leisure and gaming analyst with UBS. And we are really excited to have with us for a fireside chat, Chris Cocks, Chief Executive Officer of Hasbro; and Cynthia Williams, President, Wizards of the Coast and Digital Gaming; and Debbie Hancock, Head of Investor Relations at Hasbro. The focus of this call is going to be Hasbro's franchise brand, MAGIC: THE GATHERING, and Hasbro's long-term strategy for its gaming business. But before I go any further, as an investment analyst, I'm required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express at you on this call today. These disclosures are available at ubs.com/disclosures, or please reach out to me, and I can provide them to you after this call. Also, there will be no discussion of any confidential, restricted or material nonpublic information on this call. This is only a 30, 40 minute call, so we might not have time to open the line for Q&A, but feel free to send me questions via e-mail if we don't address them on the call. With all of that out of the way, Chris, Cynthia, Debbie, welcome, and thank you so much for your time today.

Thanks for having us, Arpine.

It's great to be here.

Thank you, Debbie. And I know you need to read some disclosures before we begin.

I also have to do a short disclosure. So thank you for having us today. Just before we begin, I want to remind everyone that we may make some forward-looking statements, our management team may make forward-looking statements concerning our expectations, goals, objectives or similar matters and that there are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. And the factors are in our annual report on Form 10-K, our most recent 10-Q and other public disclosures, and we have no -- undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this webcast.

Fantastic. Thank you. Thank you, Debbie. Chris, why don't we start with you. You've been CEO of Hasbro since February, obviously, unprecedented times, middle of a global pandemic, supply chain challenges and disruptions. But as we look forward, could you please update us on Hasbro's kind of branded entertainment strategy? And how is that different from what that strategy was before?

Yes. Well, hey, first off, thanks so much for having us. It's great to be on and be able to share a little bit of insight on the company, and particularly one of our favorite brands, MAGIC: THE GATHERING. I think Cynthia will have a wealth of information to share on that. So in terms of our corporate strategy, the new strategy that we rolled out in October, we call Brand Blueprint 2.0. It's a continuation and an evolution of the successful Blueprint strategy that we've been deploying for a little over a decade, which is all around the concept of engaging and surrounding the consumer with a host of great play in storytelling experiences that build our brands, build our relationship with the consumer and help us build a profitable and healthy business. Where I think the big points on the pivot on the strategy are in a couple of areas. First off, we're shifting from a bit more of a breadth strategy with our old strategy to be more focused on debt strategy. We call it fewer, bigger, better brands. Hasbro has over 1,500 IP in our portfolio. And we're really going to focus in on about 8 to 10 brands and really grow them. And those brands are going to be in places that we have a lot of strength in the company, gaming being a big one, where we believe we could be the leader in the category where we can drive above-category growth and where we can drive really nice profit profiles over the mid and long term. The second aspect of the strategy is a focus on the consumer and really doubling down on our consumer insights, on understanding our consumers and then also how we communicate with our consumers, increasing our A&P budgets, driving new and innovative experiences with the consumer, surrounding them with a host of engagement opportunities, whether that's big-budget movies like we have with the upcoming D&D: Honor Among Thieves movies or great video games like we have with MAGIC: THE GATHERING Arena. And then last but not least, the strategy is a focus on discipline, really driving incremental operational excellence as a company so that we compare the fantastic creativity and design we have with stronger cost management. And we believe that we're going to be able to accrue significant value of that. In October, we talked about a goal to generate $250 million to $300 million of cost savings annually over the next 3 years. We believe we're on track to do that and potentially even exceed that. And I think that's just good business, whether or not it's healthy economic times or more challenging economic times, it will position Hasbro to be able to invest in our brands, and deliver more cash to shareholders. I think when you put it all together, what Blueprint 2.0 really is, it's a redoubling and refocusing on our traditional mission of play. Hasbro is going to celebrate our 100th anniversary next year. We have this portfolio of amazing brands, and we've built those brands through play, starting as early as the age of 2 to 3 and extending on into adulthood, and Blueprint 2.0 with our focus squarely on our biggest brands with our best consumer insight and driving a little bit more discipline to pair with our great innovation and creativity.

Fantastic. That was great for opening, Chris. Thank you. Cynthia, as Chris mentioned, Hasbro has a strong gaming portfolio in parallel, really in the industry, making up a significant portion of profits for the overall company. Could you talk about your largest brand, MAGIC: THE GATHERING? And could you start by giving us a brief overview of where that business is today? And then I have a quick follow-up for you, Cynthia.

Sure. Well, thank you, Arpine, for having us. First of all, it's my pleasure to talk about MAGIC. It is really an amazing game with an incredible fan base. MAGIC was created in 1993, and it's the world's first trading card game, been played by over 50 million players to date in over 200 countries. The gameplay is highly strategic and customizable to any individual's play style. Players take turns doing battle against each other by casting spells, summoning creatures and using artifacts that are depicted on individual cards that the player draws from their personalized deck. MAGIC also offers multiple formats of play, which determine the types of cards or the number of cards a player uses in their deck. Some of those formats are more competitive and some are more casual, which offers a wide variety of endless gameplay options. We released new cards through expansion depth multiple times a year. And there is really nearly a limitless combination that players can use to suit their different play styles, and that all leads to a very high level of customization by the player.

That's fantastic. Cynthia, when we think about Hasbro, we frequently think about kids, but MAGIC is not typically played by kids. What can you tell us and people on the call about the MAGIC player today and how that has been evolving?

Sure. We know a lot about our players. Multiple times a year, we survey tens of thousands of MAGIC fans on a variety of topics related to the game. The MAGIC active tabletop player on average is 30 years old. Players range from about 13 years old to over 45. I think it's important to note that 1/3 of our players have less than 3 years of experience with the game and another 1/3 has been playing for more than 10 years. And so you end up with this wide range of engagement. We also look at how and why they play. We've seen growth in casual players, who we estimate represent about 80% of the player base with the competitive player representing the remaining, and this single insight has really led to a major rethinking of our offering and how to serve our growing and more diverse player base. Players and fans participate across multiple segments, and they overlap. For example, in the casual segment, the format that's most popular and played by more than 70% of our players is a social format [indiscernible]. It's played by 4 players at a time, and it has a really unique and cooperative rule set, and we do specific product releases to maximize this fan engagement. Over half of our players identify as social players, meaning that they enjoy the gaming for the social experience and about 50% are collectors of some kind, whether it be buying the cards for [indiscernible] strictly for aesthetic purposes or as an outlet for self-expression through their game playing. And finally, I'd say we have over 10 million registered digital players with Magic Arena. And in the past few years, our fastest-growing category of magic players are the hybrid players, meaning they play in both digital and tabletop. And this group tends to have the highest satisfaction rights with the game and the highest level of spending. In fact, they spend 40% more than the average revenue of Magic players across all expressions.

That was just great. I don't think I've ever heard this much of good color on kind of the player profile. So this is super helpful. My next question is for both Chris and you, Cynthia. Chris, you were leading Wizards until earlier this year. Could you talk to us about how you grew that business? And then, Cynthia, one of the key questions I get on MAGIC is that after an incredible run of 4, 5 years of above-average growth and Arena rollout, that business is much bigger today. So if you were to recap what's next for Magic and how you grow that business going forward? Because every gaming company on investors' mind saw uptick during COVID and now seeing the reversal of that, why could MTG be different? And how you intend to grow that business going forward?

Sure. So I'll start off. So MAGIC has been -- gosh, I would argue one of the biggest success stories in the games category over the last probably decade. I was fortunate enough to start in the business in 2016 after the business had grown, I think, for 7 straight years. We had started to see a little bit of a plateauing in that growth in 2014 and 2015. And so we started to kind of really kind of understand, okay, why was that? And in 2016, when MAGIC was probably around $350-ish million, maybe $400 million at that time, we really had a monolithic view of the player. We thought there was one player, at least a competitive player. And we knew that there were other player segments that existed like casual players and collectors. But honestly, we're a little afraid that if we built products that deviated at all from our traditional approach of appealing to the competitive player, that we would hurt the business. And what we found was actually the opposite, if we were able to segment our player profiles and just really simple way, so call it the competitive player, the social player and the collector, and build products that we spoke to each of them. We could make that each of those segments happier, we could engage them more, we could get more of their time and more of their share of wallet and grow the business as a whole. And as a result, over that intervening 6, 6.5-year period, we'd probably either tripled or come close to triple the overall MAGIC business. And we've been able to do it across a wide set of products, a wide set of segments that have made the business healthier than ever. And we've been able to do it in a fairly balanced way where we've been able to balance new player growth with lapsed player reacquisition because there's probably like close to 60 million people in the world who have ever played MAGIC. So actually people coming back to MAGIC is just as important to us as new players who've never played it before as well as driving a little bit of revenue growth per user through that segmentation approach, which has been good for us, and it's been good for our channel partners, whether the [indiscernible] or e-commerce partners [indiscernible]. Cynthia, maybe over to you.

I'd love to talk about a little bit about our plans to continue to grow MAGIC, especially in 2023 and beyond. And I say, we do have some good tailwinds that are aiding us, primarily that we are seeing this bold return to in-person play. MAGIC really thrives on that face-to-face interaction that wasn't able to happen during the pandemic. Our in-store play participation numbers are trending up and they're already back to about 75% of where they were pre-pandemic. We recently organized the largest ever in-person event in MAGIC's history. We had over 10,000 players gather in person in Las Vegas to kick off our 30th anniversary celebration. It was such an encouraging and fun fan event, and we plan on having 4 more of those MAGIC [indiscernible] next year. Our first one will be in Philadelphia on February 17 through the 19. We've been releasing 6 tent pole sets for several years. We'll do that again in 2023. With our new player acquisition strategy focused on the universe is be online. This year, we have the Lord of the Rings as a big tent-pole release, and we also have smaller sets like Doctor Who that will attract the new players. In future years, you'll see us do the same with Final Fantasy and Assassin's Creed, which will join the franchise. And of course, we'll be celebrating MAGIC's 30th anniversary with our fans, the MAGIC [indiscernible] I mentioned. We'll be releasing new products, and we're especially excited to help our trade partners and our fans by offering exclusive promo cards from each year of MAGIC that will be available exclusively through our Wizards Play Network stores with every tent pole set release. MAGIC is bigger than it's ever been, its own pace to become Hasbro's first billion-dollar brand. And our surveys show that our Net Promoter Score globally has increased to the highest point it's been at in the past 3 years.

That's very helpful. Cynthia, I think maybe this is a question for you regarding Arena, which has been obviously a huge success. I remember back in the day before MTG digitization, the big pushback or concern for investors was whether there was going to be cannibalization of that business once you go digital. And now we know it was actually additive to the business. But my question is, is there more to do in terms of monetizing kind of the digital aspects of the MAGIC franchise?

Absolutely. As I mentioned earlier, our hybrid players are the most engaged and they spend the most. So our efforts around Magic Digital will drive increased play and integration across both tabletop and our digital platforms. Now Wizards Play Network stores are telling us that they see new players coming into their store who are ready to join that community after they learn to play MAGIC on Arena. So MAGIC: THE GATHERING Arena has been a great success for us, but it's still [indiscernible] to grow as we continue to invest to meet the needs of that wide range of players. So in 2023, Arena will re-factor our new player experience, to improve onboarding for new players, and help them quickly find the play experiences that appeal to them the most. This will reinforce our acquisition efforts and maximize the impact of our launch on Steam, which is the biggest gaming platform in the world outside of mobile and it will be our largest platform expansion since our mobile launch last year. We'll continue to engage new players and long-time MAGIC players with our expanding product releases and our event offerings, including our first digital universe beyond set featuring Lord of the Rings. We've seen really great engagement with our premier play launch this year, and 2023, we'll see our first full year of Arena championships and qualifier weekends as well as our increasingly popular Arena [indiscernible].

Great. And Chris, maybe this is a question for you. Inflation has been top of mind for investors and ability to take on pricing also has been important. And we have seen kind of more traditional choice factor take on pricing throughout the past throughout the pandemic, really. But as I think about kind of price elasticity of demand for MAGIC, in my mind at least, that is an overall less price-elastic customer versus a kind of more traditional toy consumer. First, do you think my assumption is correct? Second, do you believe pricing along with unit growth could drive MAGIC over the next couple of years?

Yes. I think just the straight answer to your question is yes, it tends to be a less price elastic customer. But obviously, there's logical limits to that. We're very aware across our business of the pressures that the general consumer is under and the general discretionary sectors under vis-a-vis inflation. We have taken some pricing actions across our lineup at Hasbro. And this year, we took a pricing action on about half of the MAGIC line and the first time we've done that in 10 years. And we're very reluctant to do that. We've got a great brand. We've got a great product. The challenge that we've had is there's just been a lot of cost build up inside of the general paper market. Paper pulp is more expensive, significantly more expensive than it's been over the last couple of years. And the general trading card market, whether it's kind of fantasy or gamified the trading cards like MAGIC or more sports-oriented trading cards have seen explosive growth. So there's a fair amount of printing press demand that drives up some cost pressures. Now all that said, when we look at how we think about growing MAGIC over time, Cynthia would be the expert at this, but I don't think it's about raising prices on MAGIC cards or raising prices on MAGIC packs. At the end of the day, it's about growing our player base, and it's about -- it's about leaning into our segmentation strategy and adding products that our players want and have a lot of play value and collector value. And I think Cynthia and the team have been doing a very adept job of that. Certainly, we have some of the best experts in the company driving that for us.

Great. And that's actually a good segue to my question for Cynthia, which is if it isn't price, are you releasing then more product this year? Could you sort of go through pillars of growth for MAGIC and if you can briefly address D&D, but then we'll get back to D&D in a bit. But if you could just sort of go through kind of those pillars of growth as you see for MAGIC. And I'm sorry, some of this could be a bit of a repeat of what you said early.

Absolutely fine. Our growth is coming from both our customer and product segmentation strategy, which is backed by a lot of the data and insights to the MAGIC's different man bases. We have innovated and experimented more in the last 4 years than we did in the prior 26. And as a result, we're serving more player segments never before, and so there's going to shift in how many SKUs we released in a year. So for example, we've been on a cadence of 6 Temple releases a year for over 3 years now and there are major releases that have the most to offer every kind of MAGIC player. With each of the Temple releases, we have expanded the number of booster product types to meet player preferences, including adding set boosters and collector boosters. And then we'll have smaller print run products sprinkled between those Temple releases, that are opt in, depending on what type of player you are and what resonates with you. So we have a collectible product line called Secret Lair and we do some smaller sets like Infinity that fall in that category. But if I were summarizing it, I'd say our growth has come from monetizing more player segments and not just from increasing the spend of the same core set of players, and our product release schedule really reflects that. But I will say that in the second half of 2022, we had a really compressed release schedule that was partially driven by supply chain issues. We don't intend. We will not schedule Temple releases this closely together going forward. The supply chain issue I referenced resulted in 2 micro sets, releasing on the same date in October. But in 2023, we will return to our preferred release cadence of approximately 2 months between our Temple sets with individual Micro sets sprinkled in between. You asked about D&D. Really briefly, I'll say that you'll see us leaning heavily into the expansion of D&D through D&D Beyond, the acquisition that we did that closed this past May. We have about 13 million customers registered users there that we will continue to serve by giving them more ways to express their fandom.

Fantastic. And we'll have time, hopefully, if we have time to come back to D&D briefly after we are done sort of with MAGIC. But Cynthia, I have a follow-up for you. There's been this claim that you're printing too many cards. What is your one-sentence answer to that or maybe 2-sentence, whatever you prefer?

I want to go a little more than 2 sentences.

Yes.

Most of our MAGIC releases and our SKUs are print to demand. And this means that we print and reprint products in a set to support players and customers who want to buy it usually to play with it. And after an initial selling period prior to the launch of a set, all reorders after that set reflect real demand. And our average post-launch sales quantities for our Temple premier set remains unchanged in 2022 compared to 2021. In aggregate, there is no evidence that MAGIC is overprinted and the sentiment of MAGIC needs to cut print runs to support prices, That's a misunderstanding of our business and our customers. If our prices for a print to demand product rise significantly soon after launch, well, that simply means that we're not adequately meeting customer demand. And we are making millions of players unhappy at their lack of ability to acquire the cards they want to play.

No, that's really helpful. And I do want to go back briefly to distribution, Cynthia. With all these kind of player segmentation, what is the primary way you're getting MAGIC product into players' hands and how that has changed versus 5 years ago?

Sure. Our partnership with the more than 6,000 global Wizards Play Network [indiscernible] stores, that is the core sales channel for our business. It accounts for up to 70% of our sales in '22 year-to-date. And we are really delighted that we can support those passionate local small business owners to provide unique opportunities for our fans to engage in organized play and to build community at the local level. And this is really at the heart of our engagement strategy, and it has great benefits for both parties as indicated by our survey data. Every year, we carry out a survey among the WP and Hobby stores. And we collected feedback this year from more than 2,200 of them. It's a large representative example. And it gives us a really good pulse on their health. And we're pleased to see that this channel continues to grow and has strong performance. More than 80% of our stores reported that they are growing or equal to last year and over 60% report growth in their business. Now over the last 5 years, we've continued to evolve our omnichannel retail strategy. That involves continuing to expand our footprint at retail globally, e-commerce as well as developing our direct-to-consumer collectible offerings.

Fantastic, fantastic. Cynthia, maybe this is still for you. There has been some chatter kind of secondary market for these cards and that values are coming down because you're printing too much. Is that something that you keep track of? Is that something that concerns you?

First and foremost, MAGIC is a deep and strategic game that is played in Hobby stores, on kitchen tables and online. So our goal is to continue to grow that player base. And as I said previously, we print and reprint products to meet demand from our players. MAGIC will be our first $1 billion brand this year. We're growing that brand ahead of the industry and pushing the boundaries of where we can take the product. More often than not, we get that right, like our universe is beyond, call it, [indiscernible] which is already on its third reprint due to demand. And sometimes we step back and looking to customer feedback like we did on our recent 30th anniversary edition, where we scaled back the expected supply to ensure a great collector experience. Now that decision might not have been great for us in the short term financially, but it was definitely the right call for the long-term health of the brand and it's good for our fans. Now we do understand that some players focus on the collectible trading aspects of our product, and we are always thrilled to see players enjoying and valuing our products for years after the initial release. But we don't participate in secondary market activity for MAGIC products nor do we derive any revenue from trading or selling. What we do hear from some of our WPN stores that trade and sale cards after initial sale is that like any market or any other collectible product, some products and individual cards do become more collectible than others and values can change over time due to a multitude of external factors, many entirely unrelated to the number of cards remit. Now we have no indication that there has been any broad negative changes to interest in trading or post-purchase selling of MAGIC products. It could be easy for someone who is unfamiliar with our pre-released sales strategy to draw a negative conclusion about changes in resale values shortly after the release. But the truth is that MAGIC products are regularly put on sale early exclusively through our WPN stores as part of a prerelease program that is designed to ever in-store play at those stores. It is common and expected for the secondary market values for those new products to shift dramatically and immediately following prerelease as more products become available in the market. Those value shifts are simply supply catching up with demand.

Yes. I do think there's a fair amount of misunderstanding about all of this. So thank you for that. And I am scanning through some of the questions that I've been getting, but let me just sort of address one that also has come up. Talent acquisition and retention, I know, has been -- and the fact that MAGIC has to compete with the big tech is something that Hasbro has been pretty focused on as you build those teams. I'm wondering if that has eased a bit in terms of hiring and retention given what's going on in the big tech world?

Yes. We've hired over 350 people this year at Wizards of the Coast. And given the macroeconomic climate, we are also seeing some availability of amazing talent in the market. And our attrition is low compared with other gaming companies. People want to work at Wizards for a number of reasons. Primarily, they're working on games they love. Our games have incredibly loyal, passionate fans who are excited to work on and help shape the games that they've grown up playing. And of course, it's always great to work on a business that is growing and being invested in.

Great. Great. And this question is perhaps both for Chris and you, Cynthia. I was wondering if you could share your vision on how you approach D&D monetization and digitization? And how that's going to be different from MAGIC? And really how you approach that in general? If we could give kind of an overview of that here in terms of what's next for D&D and how that franchise is different from when you were looking at MAGIC back in 2017, 2018. Oftentimes, the question I get from investors is how do you digitize a game that's been around for 50 years, right? D&D is obviously older than MAGIC. And along with that, perhaps you can touch on how the integration of D&D and Beyond is going, growth in transactions or whatever you could share.

Mind if I start, Chris?

Yes, yes, yes. I mean the only thing I'd have to add is every time you talk about the hiring rate at Wizards, I'm just absolutely floored. My family still lives in Seattle. I live here in Providence, and I will go back to the Wizard offices. It is like I'm a senior -- it's like I'm a graduated senior returning the next day to high school. I don't recognize the class. It is attributed to that business and the great job that the team is doing, growing the talent pool.

Thank you, Arpine. D&D is -- has never been more popular, and we have really great fans and incredible engagement. But the first thing I saw with it is the brand is really undermonetized. Earlier this year, we acquired D&D Beyond, and we're really excited about the possibilities the platform provides and the positive momentum we've already seen. We made this acquisition to strengthen our connection to players and to power our next phase of product development, user acquisition and to have life service tools through which we gain really valuable data-driven insights. With DDB, we have a window into how fans are playing the game daily even if they're playing around the table, many of our D&D fans use Dungeons & Dragons Beyond as a companion app on our phone to make the experience better, and this gives us a look at how people are playing in their homes that we never had before. And so when we think about our future monetization, we start here, Dungeon Masters, which are the people who guide you through the adventure, they only make up about 20% of the audience, but they are the largest share of our paying players. The rest of the players at the table, we believe digital will allow us to offer a lot more options to create rewarding experiences post sale that helps us unlock the type of recurrent spending you see in digital games where more than 70% of the revenue in digital gaming tons post sale. The speed of digital means that we were able to expand from what is essentially a yearly book publishing model to a recurrent spending environment, and we're offering content that we know fans want. So we're super excited about the type of opportunities we have with D&D to expand beyond the tabletop to reach highly engaged multigenerational fans all around the globe.

Yes. And I think the only thing I'd add to that answer is if you look at like a super simplified view of the strategy [indiscernible] MAGIC is this super deep single quadrant brand. Does a fantastic job engaging a very loyal and passionate audience. And I think our strategy at Wizards that Cynthia and the team are really leaning into is growing that engagement and growing that player base over the next several years so that our new player growth and our reacquired player growth are really kind of carrying the growth of the brand. And you can see that in the initiatives that we're investing in, like expanding distribution of Arena. Steam is the biggest PC distribution platform in the world. That should be a nice kind of leg up for Arena. We also continue to look at other platforms like console is another opportunity for that. And then I can't understate how important universe is beyond this and how much early success we've seen in crossovers like we did last year with D&D, which at the time was our best-selling summer set ever. And then what we did most recently with Warhammer 40,000, which, as Cynthia mentioned, is on its third demand triggered reprint, like we can't keep up with the demand there. And that's just a great way to kind of engage that Warhammer fan base in a very similarly deep and low rich game and get them activated with us. And we see a lot of upside to that, particularly with big mega brands like Lord of the Rings that we think will be important. And trust me, we have a lot more plans for that and some exciting news that I think we'll be able to share with our fans soon. So MAGIC's a deep single quadrant strategy. D&D. D&D, when I go to cocktail parties and I say and people ask me what do I do? What I used to say is, hey, I was President of Wizards of Coast. And they'd say, what's that -- and I'd say, well, we make MAGIC: THE GATHERING and we make Dungeons & Dragons. I'd have maybe a 3 in 10 hit rate on people understanding what MAGIC was. But if I did, I would have an incredibly deep conversation in the cocktail party would effectively be over for all other participants. Or like for D&D though, it was 10 out of 10. Everyone knows D&D... Everyone grew up with it in the 70s and 80s, played the video games in the '90s [indiscernible] and knows it's a cultural phenomenon right now. And so like the D&D strategy, if the MAGIC strategy is a deep single quadrant strategy, the D&D strategy is a broad four quadrant strategy where we have this powerful brand that has similar awareness to like Lord of the Rings or Harry Potter. And we're going to view it with blockbuster entertainment like we have with the movie coming up, AAA -- true AAA high-end gaming like we're going to have with Baldur's Gate 3 next year, and then just an amazing set of products that we will activate as Hasbro across our blueprint. Whether that's what we're doing at D&D Beyond, what we're doing at Hobby stores, with new books and accessories or what our consumer products team and licensing team are doing to build out a host of new collectibles and toys and games for a more casual fan. So as excited as I think Cynthia and I are for MAGIC's growth potential over the coming mid and long term, I think D&D could be a real new [indiscernible] for our gaming portfolio as a whole and for Wizards specifically.

That was great. Thank you. And I promised 30-40-minute call. But let's take one more question and that I'm trying to actually scan some questions to make sure I'm incorporating what I'm getting by e-mail as well. And you already addressed that in some ways, right, next year, Hasbro has a much better film slate including the scheduled release of Dungeons & Dragons: Honor Among Thieves, on March 31, I think, 2023. How do you define success with that sale outside of the obvious kind of movie proceeds and upside to that economics? What would it mean for the D&D franchise? How do you define that success?

To me, the D&D film is the first big light-up opportunity for that powerful 4 quadrant brand. The D&D film should by all accounts, we feel like it's going to have a healthy box office. It's going to have significant marketing. Paramount -- prior to the latest Transformers, the latest Transformers: Rise of the Beasts trailer that just released last week, D&D was on track to be one of the top viewed trailers ever by Paramount. Transformers took that honor most recently. So we're still happy about that. But I think we're going to be able to light up D&D awareness. We're going to be able to activate that awareness with host products at retail, gaming and online. And then we're going to follow it up. We're going to follow it up with a host of video games that we license out, work with like great partners like Larian, with Baldur's Gate 3 that we develop ourselves and then follow that up with a host of new entertainment. Like to me, Dungeons & Dragons is the real poster child for Blueprint 2.0. Our overall corporate engagement story, which is doubling down on play, supercharging play with great storytelling and entertainment and focusing on a category that we are an early leader in, the best innovator in and have every right to win and grow our profitability and grow our return to shareholders. So consider me [indiscernible] on D&D.

Fantastic. That's a great note to end this call on, and we are actually over 40 minutes. So I apologize for that. I think we're going to conclude the call here. Thank you so much. This was great. Chris, Cynthia, Debbie, thank you so much for making this possible, and thanks, everyone, for joining.

Arpine, thanks so much, and have a happy holiday.

You, too. Thank you.

Thank you. Bye.

Take care, everyone.