Magic: The Gathering's success stems from a single core insight — players bring their own ever-growing collection of cards to the game — turning per-customer lifetime value into thousands of dollars.

26:19the way I noticed this was uh Diego was telling me, he's like, "Oh, Hasbro stock popped." And he's been going to these card collectors conventions every weekend. So, he's been telling me about the Pokémon scene. He's just He's just been getting into that like subculture. He doesn't really buy any stuff himself, I I don't think, but he um >> He participates. >> interested in the obsession and the

26:38fanaticism and the like the subculture that that exists cuz it's like invisible to you unless you're in one of these conventions. So, he's like, "Yeah, Hasbro stock just popped." And it was because Magic just hit like an all-time high. Magic: The Gathering. I'm like, "Magic: The Gathering, isn't this like 20 years old? And it's true. Magic the Gathering has been compounding 17% a year on average for 17 straight years. And so the it's

27:01just been this like incredible compounding machine. This franchise which sounds like, you know, it might be like a quick fad like Beanie Babies. >> what it is. So like I had the cards when I was a kid, but I don't even know if it was a game or not. >> Yeah, so it's a it's a it's a game you can play. Two people can sit down and

27:18you can kind of like have a duel. So it's like a card game, but and this is kind of the genius of it, a lot a lot of the fun isn't even playing the game against each other. Like Pokémon, it's about collecting. And so how did they do this? And so this the backstory is pretty fascinating. So for So first of all, Hasbro is this company that owns Monopoly. They own

27:35Nerf guns. They own They They own a bunch of stuff. But like every you know, of every dollar that comes in, one out of every three is driven by Magic. It's like it is their cash cow. Magic will do, you know, 2 billion this year in revenue. It's been just cranking along. This was like, you know, an all-time best quarter. So you'd think like is this old IP not like fizzling out?

27:57No, no. It's like having its best quarter ever. If you read the true backstory, you realize one thing, which is what true sort of tinkering, the power of tinkering. So this guy starts with this He's making this game called Five Magics. And Five Magics is a game he makes, doesn't go anywhere, but he puts a lot of heart and soul and sweat into it. And he puts it on the shelf cuz who cares?

28:18And then he goes along and he's working a job, but then he creates this He has this other idea for this like more advanced game like robo something where you like kind of like build robots in the It's like a board game where you're actually like building a robot. And then he pitches it to this guy who's doing this Wizards game. And that guy's like, "Dude, this is too hard to build. Can

28:35you build something that's like more like kind of you know, this sort of sci-fi lore type of game, you know, this wizarding lore fantasy stuff. And make it like something simple. Not the like You you to build a robot, but like just like a card game or something. So he goes back and he's thinking and he's on a hike one day and he has a sort of eureka moment. He's like, "Oh, I