Why Toymakers Like Hasbro And Mattel Need Hollywood

Key Concepts

• Toyetic: Properties (stories & characters) easily adaptable into toys.
• Kidadults: Adult consumers who collect and spend money on toys.
• Master Toy License: Exclusive rights to produce and sell a full line of toys based on a property.
• Licensed Products: Toys based on established franchises (Star Wars, Marvel, etc.).
• Retail Sales (Toy Industry): Total revenue generated from toy sales globally.

The Resurgence of Entertainment-Driven Toy Sales

The toy industry is anticipating a boost in sales driven by the return of major film franchises – superheroes, space adventures, and popular characters like Minions. Toy manufacturers, specifically Hasbro and Mattel, are strategically aligning with these releases to capitalize on renewed consumer interest and capture new audiences. The core strategy revolves around “toyetic” properties – those with characters and narratives naturally lending themselves to toy creation, such as retractable lightsabers or poseable action figures.

The Rise of the “Kidadult” Consumer

A significant driver of growth within the toy industry isn’t children, but “kidadults” – adult consumers with disposable income who actively collect toys. This demographic is increasingly important, shifting the industry’s focus beyond traditional child-focused marketing. This trend is evidenced by the overall growth in global retail sales, which increased by approximately 4% in 2024, reaching nearly $370 billion.

The Power of Franchises & Licensed Products

Licensed products tied to established franchises like Star Wars, Marvel, DC, Frozen, and Harry Potter consistently perform well, demonstrating a resilience to fluctuations in theatrical releases. A compelling example is Star Wars: despite the absence of a new film in 2021, Hasbro experienced a 70% increase in Star Wars toy sales. This highlights the enduring appeal of the franchise and the sustained demand for related merchandise.

Collaborative Licensing & New Media Opportunities

The success of Netflix’s KPop Demon Hunters illustrates the potential of new media to drive toy sales. Initially, the film’s immense popularity (becoming Netflix’s most viewed movie of all time) spurred a grassroots movement of fans creating their own merchandise – crocheted dolls and homemade costumes. This demand prompted Netflix to partner with both Hasbro and Mattel to release an official toy line, a rare occurrence as toy companies typically hold exclusive “master toy licenses.” Hasbro is focusing on foam roleplay items and new Furbies, while Mattel is producing themed card games and special dolls. This dual-licensing approach demonstrates a willingness to maximize market reach.

Production Challenges & Timing Adjustments

Historically, studios and toy manufacturers have collaborated on merchandise for decades. However, the industry faced disruptions due to the pandemic and labor strikes, causing production delays and impacting release schedules. There were instances of toys being released before the corresponding films to manage retail shelf space. This timing has been recalibrated, with a wave of blockbuster releases – Super Mario Galaxy, Minions & Monsters, and a new Star Wars film – scheduled for the coming months, aligning with replenished toy shelves.

Recent Performance & Economic Headwinds

The impact of a successful film release on toy sales is significant. Warner Bros.’ Barbie movie in 2023 resulted in a 16% sales increase for Mattel in the subsequent quarter. However, the industry now faces a more cautious consumer base due to high inflation and economic uncertainty, which has led to reduced spending. Furthermore, tariffs have increased production costs, forcing manufacturers to raise prices, potentially impacting consumer demand.

Strategic Outlook & Nostalgia's Role

Despite these economic challenges, the industry believes that leveraging established franchises and tapping into consumer nostalgia remains a viable strategy. The success hinges on appealing to both children and the growing “kidadult” market. As stated implicitly throughout the report, betting on cherished movies and nostalgic properties appears to be a prudent approach in the current economic climate.