All but one of this week's email was about Magic: The Gathering, and similarly last week. Would it be possible for this to be more diverse or is it algorithmically generated?
It's algorithmically generated, presumably based on things like number of answers, votes, views, post age, and so on, but I don't know the details offhand.
So unfortunately, the answer here, or lack thereof, is the same as the answer to "why is the homepage full of Magic questions?" I'm certainly all for increased diversity, but it's not an easy thing to change.
I suppose it'd be possible for us to ask SE to aim more for diversity with the algorithm (e.g. reduce the score of a question for every question already selected that shares a tag with it) but that feels like treating a symptom rather than the underlying cause, and I suspect the newsletter is not the highest-priority feature.