About Action Figure
Oh my goodness. Here is a fascinating article anyone who buys action figures should read. Presented by ToyDirectory.com,
check out the analytics of action figure purchasing, and where the
trends are showing the industry is headed. It's a morose article. Fair
warning! Extra special thanks to JTA reader Stuart R. for directing our
attention to it!
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Action Figures represent about 6% of the U.S.
toy market and are completely dominated by Hasbro. This is how the
picture has developed since 2007. Hasbro’s action figure program is totally driven by blockbuster
movies. This began in 1997 when the company obtained the Star Wars
license from Lucas and used the three movies between 1997 and 2005 to
establish their preeminent position in the field. This was further
cemented when Hasbro and Marvel signed an agreement whereby Hasbro could
piggyback on all the Marvel movies from that point onwards. This
arrangement was continued in 2009 when Disney bought Marvel and again in
2012 when Disney bought Lucas.
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However, something seems amiss in this strategy. Even though Hasbro
has had the action figure rights for the top movies in the field, they
have lost market share in the U.S. market consistently since making the
deal with Marvel. This is clearly not because of execution nobody
beats Hasbro when it comes to bringing an action figure to the market.
So the reason must lie somewhere else. I asked national Buyers at the major retailers both here and in
Europe what they thought could be the reason. They came up with several.
1. One reason may lie in the fact that movies do not seem to be able to generate sales the way they used to do. I looked at the retail sales and the box office results of four products with two or more movies between 2007 and 2012 and this is the picture that emerges.
First, the Transformers:
Source: Box Office Mojo and Klosters Retailer Panel
Secondly, Star Wars:
Thirdly, Spiderman:
And lastly, X-Men:
What this suggests is that whilst box office results are either
holding up or are in fact increasing, the opposite holds true for their
attending toy sales. This is best shown by web traffic patterns, which
show consumer interest in these properties.
Firstly, movies
Source The-Numbers.com
There are non-published studies carried out by a major Hollywood studio which suggest that the drop in the below 10 years age group has been particularly pronounced since 2010. Co-incidentally, this is also the year in which Netflix’ movie streaming really got traction.
Secondly, TV
Source: Cynopsis.com
Children are watching less TV and their attendance has been declining since 2009.
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The peaks reflect interest triggered by the movies but the overall
trend is clearly negative. I think that whilst consumers still like the
movies, they have grown a little tired of seeing variations of the same
toy themes year after year.
2. Some national Buyers believe that the increase in blockbuster
movies in fact degrades their impact on toy sales, and they may have a
point. There were four action figure movies in 2007, five in 2008, six
in 2009, six in 2010, eight in 2011, five in 2012 and eight in 2013. For
2014, there are now ten on the launching pad. Another factor is the bunching of these movies into the prime-viewing months. The graph below demonstrates this phenomenon:
In other words, the Buyers believe that the action figure movies increasingly cannibalize each other.
3. Another negative factor is the declining interest in the media
that are the main drivers for Action Figures, either the movies
themselves or the advertising accompanying them. There is clear evidence
that movie as well as TV attendance by the prime target group is
declining.
Firstly, movies
Source The-Numbers.com
There are non-published studies carried out by a major Hollywood studio which suggest that the drop in the below 10 years age group has been particularly pronounced since 2010. Co-incidentally, this is also the year in which Netflix’ movie streaming really got traction.
Secondly, TV
Source: Cynopsis.com
Children are watching less TV and their attendance has been declining since 2009.
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4. A technological change introduced early last year promises to
affect the way kids use toys the Skylanders and now also Infinity.
Both marry physical toys to a video game console and allow a completely
new way of playing. In the opinion of the Buyers at the large retailers,
the Skylanders clearly encroach upon the Action Figure space whereas
Infinity affects both Action Figures and Preschool. Whilst NPD
classifies the Skylanders as well as Infinity as video games rather than
toys, the Buyers disagree and they demonstrate this by putting the two
ranges both into their video game space as well as their toy aisles. In
fact, if the Skylanders had been included in NPD’s Toy Category, they
would have given a major bump to the Action Figure retail sales
performance for 2012 and would also have reversed the continuous decline
of the overall NPD Toy Market estimates over the past ten years.
According to NPD, retail sales of the Skylanders in the U.S. amounted
to U.S.$500 million last year. If they had been included in toys rather
than video games, they would have dwarfed every single one of Hasbro’s
top selling Action Figures.
What is also interesting in this context is that Disney decided to
paddle their Infinity boat by themselves rather than going their
accustomed route of licensing the thing to Hasbro or Mattel. This did
indeed raise a few eyebrows amongst the national Buyers at the major
retailers who wonder whether this presages a change in the relationship
between Disney and the leading toy companies.
In summary, the buyers believe that the Action Figure category
buffeted by technological change, degradation of supporting media and
eroding consumer interest is not going to go back to the good old
days. Yes, they think that movie-supported action figures will still
sell but that the Skylanders and the Inifinitys of this world will be
the decisive future drivers.
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