Hasbro, the global toy company, announced last week that poor sales of Star Wars products had held back revenues, largely due to the fact that the past 12 months was a “non-movie year”. In the second quarter of 2006, the company shipped just $61.8m (&£33.4m) of Star Wars products, compared with $146.6m ($78.9) a year earlier. According to Hasbro, strong 2005 sales accompanied the release of Revenge of the Sith, the final episode in the Star Wars series.
Graham Harding, founding director of the Value Engineers, says: “Film licences are the trend of the moment. There’s a lot of action in this area and sales volumes are huge.” Indeed, in contrast to Hasbro, Lego’s Star Wars range has done particularly well – this licensed line was among the biggest-selling products last year and sales this year are holding up.
But after a franchise arrangement comes to a conclusion it can leave toy companies with an ominous sales void to fill as they battle for a slice of the &£2bn UK toy market. Emma Sherski, marketing director at Vivid Imaginations, says a film release acts as an all-encompassing marketing platform for a product range. But she adds: “You have to continue to invest heavily in a brand post-movie if there is to be long-term potential for the toy line, and you must make sure new products are launched to keep the brand fresh.”
Harding agrees, but says that collectible ranges are driving sales of licensed products. He believes the way forward is the community or club concept, which has been successfully deployed by Lego and Hasbro around the fantasy game Magic: The Gathering. He explains: “Toy companies need to shift the purchase model. Hasbro has successfully generated a buzz around user-centric concepts in its pre-school categories and needs to translate this to other products. It is no longer just about convincing mums to buy something.”
Sherski says: “In the toy industry, one of the biggest keys to brand longevity is delivering fresh and innovative products. Of course marketing and promotions have a place in the success of a brand, but the product needs to deliver against core brand values. Bratz continues to grow at 30%-plus year on year as a new product is introduced each season.”
She adds that Vivid has successfully kept Animal Hospital, a former BBC TV series, alive for more than ten years by ensuring that “new themes, reflecting the nurture and care play pattern, are launched”.
Star Wars-related sales at Hasbro may have slipped this year, but with the six-film series celebrating its 30th anniversary, a packaging revamp and the most realistic light sabre toy to date due next year, Hasbro’s licence is likely to do well. It also holds the licences for Spiderman 3 and Transformers, both supported by big-screen releases predicted to do well in 2007, and earlier this year secured the rights to Marvel characters.
Play and education count
Yet Hasbro is not just relying on films. Hasbro marketing director for toys Mark Foster says it will maintain its roots in traditional play and education while developing and launching technologically innovative products. Later this year the company will refresh the established My Little Pony range and introduce TJ Bearytales, an animatronic story-telling bear.
Harding concludes: “Hasbro is very good at generating the latest ‘clever’ plastic – something close to magic. And I’m sure it will do that with the Marvel brand and others, but at the end of the day it is films that give toy licences that extra turbo charge.”