Old Model Army

Cast an eye down the list of new toys which are due to hit the shelves this year and you might think you’ve stepped back five, ten or even 20 years. The Wombles, My Little Pony, Transformers, the Little Mermaid, the Ninja Turtles (now without their Ninja) and Miffy are all being touted as the next big thing to hit the shelves in 1998.

All of which calls toy makers’ motives into question. Is the current retro dominance a sign of pre-millennial angst as seen in other industries, or is it the case that toy manufacturers are resting on their laurels and not investing in research and development?

The toy market was static in January to September 1997, compared with the same period in 1996, according to figures from research company NPD. Its value rose just 1.7 per cent, less than inflation, to 674m. It had seen six per cent value growth in the previous year.

Add to this the fact that two of the top sellers in the UK for 1997 were Bandai’s Tamagotchi and another virtual pet, Playmates’ Nano Puppy Kitty Baby. Both featured alongside the Teletubbies in the UK’s top ten which, barring Mattel’s top-selling Barbie, means that only Hasbro among the other major UK toy companies is in the top ten (see table). It throws into doubt the wisdom of companies relying on tried and tested formats and licensed products to hit the best-seller list.

Roger Watts, a marketing consultant specialising in children and families, who includes Tomy on his client list, says: “Some classic brands, such as Action Man, are sleepers and can be brought out again at a later date when the time is right. But I think the commercial realities of life play a big role and brand new products take a lot of research and development time.

“Barbie and My Little Pony are tried and tested products and other products that are coming back, such as Transformers, do so because they rely more than ever on the entertainment (TV) industry.”

The huge licensing industry is a major driving factor in the retro toy market. Many toys are coming back simply because the television show or movie is being re-released or revamped. The Wombles are returning to TV screens this month, the Little Mermaid is scheduled for re-release later this year and Transformers – first seen in the Eighties – are also to be relaunched on TV this month.

But there is a danger that the whole licensing market is flooding. Industry sources say that retailers are getting bored with licensed products. In addition, it is no longer the case that a film with big backing and a major advertising campaign necessarily guarantees a toy’s success.

John Salisbury, editor of UK Toy News, says: “I do actually think a lot of it is down to laziness. The licensing market has been swamped for a long time – the brands you see are the ones that have been a success – but that’s really the tip of the iceberg. There are lots of others that fail.”

He cites the Mattel-produced products for Disney film Flubber, starring Robin Williams, which has just opened in the UK. But it has not been a great success in the US and according to Salisbury: “I actually think the retailers are tired of it.”

It may also be the case that good ideas are being turned down in favour of what is perceived as a lower-risk licensing deal. Taking on a new licence does not involve the huge upfront costs of research and development. In addition, if products are supported by Warners or one of the other big movie houses, which may be spending $100m (62.5m) promoting a film to a global market, financiers will see this as attractive. Producing a toy from scratch with no entertainment support is more difficult to manage and more expensive to market.

Tony de Rivaz, managing director of toymaker Logiblocs, put his life savings into a new venture after he became frustrated by larger companies such as Tomy who refused to take an interest in his product.

“My view is that there are a lot of clever people in the manufacturing sector but they are restricted by financiers. They would rather go for a licensing deal because it is not perceived as high risk. What you want is a maverick managing director – someone who will take on and champion your product and carry it through into the market.”

There is also the “not invented here” view. Companies may not want to look at inventions which originated outside because they fear it may make them vulnerable to copyright lawsuits at a later date. Or they may see backing an idea from outside as an admission of failure on the part of their own research department.

The inability to harness creativity, in whatever form it comes, could cost companies dear. One of the most successful products of the past year has been Bandai’s virtual pet Tamagotchi, which has had global sales of 30 million units. The idea came through an employee who dreamt up the idea after repeated pleas from her child for a pet.

Bandai marketing director Rosie Bales says: “Perhaps it’s a cultural thing with Bandai – something to do with the Japanese mentality – there is room for innovation throughout the organisation.

“The Japanese market is also much more receptive to gimmicky products and so there is a lot of development geared for that market and some of the products filter through to the West if they’re appropriate.”

The retro wave may also be driven by parents who are reassured by familiar products and fazed by new trends and computer-based toys. One toy market researcher says manufacturers are appealing to parents who remember things like the Wombles fondly. “They’re almost willing them to make a comeback. These are products parents understand – many of them feel alienated by technology and so welcome a return to familiar faces.”

Nicola Basham, group marketing director at Hasbro, says: “Parents need to feel comfortable with what they are buying for their children. In addition, there is a huge residual awareness in fathers, mothers and older brothers and sisters for a number of our products. Basically, we are appealing to enduring play themes. But if asked, could we have brought back exactly the same products as we have sold before, the answer is no. We are looking at building on core themes and bringing them up to date.”

Mattel, which has just announced that it is planning to work with Intel in the US, also argues that it has been innovative but within existing core brands. For example, children are able to design and make clothes for Barbie through the PC.

Chris Ash, chief executive at toy store Hamleys, disagrees with the notion that the retro toys phenomenon represents a lack of creativity. “The fact is the innovation is there but in existing products such as Barbie with a new look and a new face. Does it really matter if it’s been around before? It’s like re-releasing the Beatles. Persil wouldn’t chuck its brands in the bin and say let’s start again.”

Will the toy market remain a recycling pot for old ideas for years to come? With the increasing presence of nimbler technology-based companies entering the market, some of the bigger, more established companies will have to take notice and parents will have to start asking themselves whether the toys they are buying are really for them or for their children.

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