The pressures on the gaming industry are making digital technology the star

The gap is widening between the competing game makers Hasbro and Mattel — thanks in part to the 30-year-old trading card game.

Toy giants have dominated the space for decades, vying for the coveted major licenses to put new fan favorites — Disney princesses and “Star Wars” characters among them — on store shelves. But as the industry recovers from a period of declining sales, Hasbro is the company beating Wall Street.

For fiscal year 2025, Hasbro reported a 14% revenue gain, to $4.7 billion, while Mattel saw its net sales decline 1%, to $5.3 billion.

Although Mattel’s revenue is larger than Hasbro’s, its growth has remained stagnant, according to Eric Handler, managing director and senior research analyst at Roth Capital Partners.

“[Mattel’s] “Revenues have been in a very tight range for five years now, and 2026, on an organic basis, is the same.”

Mattel shares have fallen more than 20% over the past 12 months, trading at around $17. Meanwhile, Hasbro stock is up nearly 46% over the same period, with shares trading at around $100.

Of course, Hasbro’s post-pandemic journey hasn’t been without headwinds. The company’s revenues took a hit when it divested its film and television business, eOne. The entertainment sector, which includes film and television licensing, was also severely affected by dual labor strikes in Hollywood in 2023.

“Despite market volatility and a changing consumer environment, we have positioned this company to grow in a meaningful way,” Hasbro CEO Chris Cox told investors during an earnings call earlier this month.

During these changes, one of the main parts of Hasbro’s business has been steadily growing – Wizards of the Coast.

Hasbro’s division includes Dungeons & Dragons, Magic: The Gathering, and the company’s digital and video game portfolio.

In 2025, Wizards’ revenue increased 45% to $2.1 billion, boosted by sales of sets tied to Magic’s Universe Beyond and smaller, limited-edition Secret Lair packs — some of which sell for nearly $200.

While this segment represents less than half of the company’s revenue, it represents 88% of its adjusted earnings.

The strategy trading card game Magic, created in 1993, typically features two players going head-to-head using custom sets of collectible cards to cast spells, unleash creatures, or use artifacts to defeat their opponent.

In the past five years, Hasbro has expanded beyond its initial toy tradition to launch card sets based on third-party intellectual property, including “Avatar: The Last Airbender,” Marvel’s “Spider-Man” and “Lord of the Rings.”

Not only are these sets very popular with long-time Magic fans, but they serve as a gateway for consumers from other fan bases into the world of Magic. In mid-2025, Hasbro released the “Final Fantasy” collection, which became the fastest-selling expansion pack in the history of Magic: The Gathering, achieving $200 million in sales in a single day.

“They’ve done a great job expanding the funnel in the last couple of years and it’s become a multi-generational product,” Handler said. “The player base is growing. It’s a steady player base that shows a passion for new products and new ways to play.”

Through the end of 2025, more than 1 million unique players have participated in organized play — that is, sanctioned tournaments — according to Cox. This is a 22% increase year-on-year, he said.

Additionally, the number of game stores hosting events, called the Wizards Play Network, has risen to more than 10,000, a 20% increase from 2024.

“This reinforces our confidence in Magic’s long-term growth,” Cox said on the company’s earnings call. “We are building a gamification ecosystem with multiple entry points, product types and engagement paths, and this ecosystem is positioned to continue driving growth into 2026 and beyond.”

In 2026, Hasbro plans to release new magical sets based on The Hobbit, Teenage Mutant Ninja Turtles and Star Trek.

The company expected mid-single-digit growth for its Wizards business in 2026, but Keegan Cox, associate vice president and research analyst at DA Davidson, in a research note published shortly after the company’s earnings, called that estimate “conservative.”

Hasbro’s Wizards unit also includes the digital and licensed games space, which saw revenue jump 6% in 2025, driven by the success of “Monopoly Go!”

Cox has previously noted that modern consumers and modern gaming are increasingly moving to online forums, and the company has launched new games and an in-person video game studio in Montreal to enhance gameplay.

As Hasbro’s digital toy division grows, Mattel is working on launching its own digital unit.

Earlier this month, Mattel announced that it would buy out partner NetEase’s 50% stake in its Mattel163 joint venture, taking full ownership of the company. Mattel163 develops digital games based on the toy company’s brands, and since 2018 has launched four digital games: Uno, Uno Wonder, Phase 10, and Skip-Bo.

“In our view, [Mattel] “It is in the early stages of an investment similar to Hasbro’s investment in toys over 7 years ago,” DA Davidson’s Cox wrote. “While we don’t think so [Mattel] We will chase to compete with Hasbro…we believe it [Mattel] “Successful mobile games can be tied to their intellectual property and should add to their profit margins over time.”

Mattel’s move toward digital transformation comes at a time when two of its flagship brands are struggling to achieve sales.

“Barbie was in major decline, as was the case with Fisher-Price,” Handler noted. “That kind of negates a lot of the good news that was happening with Hot Wheels.”

The Vehicles segment saw total billings jump 11% in 2025, while the Toys segment fell 7% and the Infant, Toddler and Preschool space fell 17%.

This segment of younger consumers has been declining for over a decade, as a result of shrinking population growth and the fact that children are being introduced to electronics early in their development. Changing gaming habits mean that game makers have to adapt quickly.

But there is hope for Mattel and the toy industry as a whole. In 2025, total annual dollar sales rose 6% in the United States, according to data from Circana. Perhaps most importantly, the number of units sold rose 3%, allaying fears that price-conscious consumers would stop buying games.

“I think rising unit sales 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 are down, that’s when you know people are buying less, and that hasn’t happened.”

Mattel and Hasbro, along with other toy companies, are also expected to get a boost from a strong theatrical calendar this year.

Mattel has two of its own brands represented at the box office, with “Masters of the Universe” arriving in June and “Matchbox” arriving in October. While Mattel won’t see a huge increase in ticket sales, its toy sales could get a boost. After all, the 2023 release of “Barbie” helped boost the doll’s total billings by 16% in the quarter following her theatrical debut.

Mattel also owns the major toy licenses for “Toy Story” and Disney Princesses, meaning it will handle the bulk of the product for “Toy Story 5” and the live-action “Moana” movie.

Hasbro will have toy lines for “The Mandalorian and Grogu,” “Spider-Man: Brand New Day” and “Avengers: Doomsday.”

Mattel and Hasbro have also teamed up for the long-awaited product line Netflix The hit anime film “KPop Demon Hunters”, promising dolls, foam role-playing items, toys and plush items.

“The KPop Demon Hunters movie will do big business for both Hasbro and Mattel,” said Zahn.