Hasbro, the century-old toy company behind Mr. Potato Head, G.I. Joe, and My Little Pony, is undergoing a strategic transformation under CEO Chris Cocks that shifts the business away from its traditional children's market and toward adult consumers — or as Cocks calls them, "kidults." The pivot reflects a broader trend across the toy industry, where companies like LEGO have long cultivated adult fan communities and Mattel has expanded licensed product lines targeting grown-up nostalgia buyers.

Appointed in 2022, Cocks is repositioning Hasbro to derive the majority of its sales from card games while betting heavily on grown-up demand. The strategy appears to be paying off: Hasbro reported a 16% revenue increase to $1.14 billion on Tuesday, surpassing analysts' expectations of $1.07 billion. Shares jumped sharply on the news and are up 9% year-to-date.

A major driver of the results was the performance of Magic: The Gathering, the 33-year-old collectible card game franchise. Boosted by a collaboration with Marvel Super Hero collectibles, the business grew 32% year-over-year and surpassed the $500 million quarterly revenue mark for the first time. Hasbro has revitalized the franchise in recent years through digital integration and by making it more accessible for large-group play. The results underscore the strength of the broader trading card game category, which has seen renewed consumer interest alongside Pokémon TCG's post-pandemic resurgence.

"Magic is not a niche hobby business," Cocks told Wall Street analysts on Tuesday morning. "It is a mega franchise. 'Magic: The Gathering' belongs in the same company as Pokémon, EA Sports, World of Warcraft, and Minecraft."

The broader toy market is also showing signs of recovery. Research firm Circana reported double-digit toy sales growth this spring, including a 13% increase in April, the most recent month for which data was published. The sector had been in a multi-year slump following a pandemic-era boom.

Adult consumers — particularly women — are fueling Hasbro's resurgence. According to Circana, more than 50% of overall industry growth is attributable to women, as toymakers leverage nostalgia for legacy brands and demand for modernized versions of classic products. Last week, Hasbro launched Blooms by Play-Doh, a product that lets consumers craft and display realistic floral arrangements. It marks the first time in Play-Doh's 70-year history that the brand has designed a product specifically for adults.

"Where they are leaning in and are pretty eager for more product is in the gamified, entertainment-driven, multi-purchase, multi-generational products, basically stuff for kidults," Cocks said of retail partners.

Cocks joined Hasbro as CEO in 2022 after a tenure at Microsoft's Xbox division, where he oversaw game portfolios and marketing for major Xbox launches. Early in his tenure, he undertook a significant restructuring by selling Hasbro's eOne television and film business to Lionsgate for a fraction of the $4 billion Hasbro had paid for it in 2018. The company had previously aspired to become a major media player, but high production costs in film and television led to substantial cash burn, prompting Cocks to initiate a strategic reset — a retreat that echoed similar decisions across the industry, where toy companies have increasingly favored licensing partnerships over in-house media production.

Hasbro is also refocusing its video game strategy under Cocks. The CEO announced on Tuesday that the company will reduce annual video game spending by at least 25%. Hasbro will continue developing new titles but will work with co-publishers and tie releases to its trading card and role-playing franchises, as with the upcoming titles Exodus and Warlock, both scheduled for release next year.

In a Fortune interview in 2024, Cocks acknowledged that Hasbro had not sufficiently prioritized its toy business, had failed to adequately fill its innovation pipeline, and lacked a clear guiding philosophy for reinvention. His new framework reframes Hasbro as a company operating in "the industry of play" — rather than defining itself narrowly as a toy or video game maker.

At the moment, the approach is delivering results. Whether Hasbro can sustain Magic's momentum beyond the Marvel collaboration lift, and whether franchises like Dungeons & Dragons can achieve similar commercial scale, will be key indicators of whether the kidult strategy has durable legs.