The Future of Some Toy Lines Certainly Growing—UNcertain
If you’re an adult over say, 45, you may be a member of a dying breed. We’re not talking about your health or lifespan, we’re talking about the fact that you’re a human (man or woman) who can still remember when “childhood playtime” meant interacting with dolls, action figures and other toys. You may not realize it, but you could be a member of one of the last generations who’ll remember those youthful pursuits as the carefree activities they were and how they required one of life’s most precious gifts—imagination.
This conclusion is easily understood by simply observing the children of today’s societies and how their evolving behavior patterns have begun to affect the “bottom line” of an already struggling toy industry. Yes, it’s a different world (today) than the one you grew up in, and that reality is forcing toy giants (i.e. Hasbro and Mattel) to push for changes that will usher in a new era, one that may be largely devoid of the past’s traditional or “imagination-dependent” toys.
Children are Changing—Buying Behavior is Changing—The Toy Industry is Changing
In the past, toy manufacturers used to be able to count on keeping a child’s interest and faithful patronage until about the age of 13 or so. Once the teenaged years kicked in, it was understood that kids began to switch over to more “grown up” interests such as sports, dating and music. While it was a shame to lose them as customers, toy companies knew there would always be more children coming along and more profits could be made from them. But now…that predictable mode of forever selling toys appears to be changing. Dramatically.
At earlier and earlier ages, children are visibly turning away from traditional toys. Once their first computer, video game system or <shudder> “smart” phone enters their lives, there’s really no looking back. In fact, the very idea of playing with traditional, non-electronic toys is becoming positively quaint to children of today (of both sexes). Even casual observations at toy shows and toy stores have confirmed they already perceive GIjOEs and Barbies as stiff, almost unrelatable artifacts of bygone age; something that their Mommy or Daddy “used to play with” very long ago, but is now—boring.
So what does all this mean? It means that now, in 2015, toy companies can no longer afford to do business as usual. New solutions to newly emerging problems must be found, before sales and stock values plummet any further. It means that once impervious toy lines of the past are now at risk of being ignored (read Derryl DePriest’s commentary on the fate of GIjOE HERE) or canceled altogether. As children continue to grow up faster and switch to non-toy pursuits at younger ages, they’re truncating a once lengthy consumer-provider relationship. Profits from toys therefore, are now harder to predict, forcing changes in marketing strategies that, while helping boost the bottom line, may actually increase the growing gap between children and traditional toys—even further.
In a stunning admission, Mattel recently disclosed that Barbie’s sales figures have fallen for the last SEVEN CONSECUTIVE QUARTERS. It’s hard to imagine how much longer the toy giant will want to support such a steadily declining “loser,” but it’s harder still to imagine a world where Barbie no longer exists—at ALL. In a recent article in the The Wall Street Journal, business analyst Cassandra Jaramillo reported:
“Mattel Inc.’s sales of the doll fell 19% in the second quarter, as the toy maker swung to a quarterly loss and posted a 7% drop in overall net sales. The stronger U.S. dollar drove a large chunk of the decline, but Barbie’s sales would still have fallen 11% when stripping out currency swings.”
Bad news Barbie fans, but hardly a surprise to the bean counters at Mattel. The article continues:
“Sales of the doll have dropped by DOUBLE DIGITS for seven straight quarters—underscoring the deep challenges facing new Mattel Chief Executive Christopher Sinclair as he looks to right the world’s largest toy maker by sales. Barbie is Mattel’s largest brand and a big driver of profits, but its long slump has cost it shelf space at retailers that Mattel will have to work hard to earn back.”
Currently, the profit pendulum is clearly swinging backwards in a negative arc for Mattel. Its stock value went down by 3 points and the WSJ article ended with THIS sobering total:
“The company posted a LOSS of $11.4 million in the most recent quarter, compared with a profit of $28.3 million a year earlier.”
Toy Companies—Media Companies—Will There Be a Difference in the Future?
Mattel’s not the only toy giant to see one of its oldest toy lines struggle to remain relevant and profitable in this modern age. Hasbro too, now considers its once industry-leading brand, 12″ GIjOEs, to be practically null and void. Without the “little Joes” (3.75″ sized), the world’s most famous toy brand would have vanished from stores by now.
But Hasbro has demonstrated amazing vision. Anticipating the evolving market realities and changing interests of children, they’ve diligently built-up their business from its basic toy origins into a full-blown media and entertainment powerhouse; producing blockbuster brand-offshoot motion pictures such as The Legos Movie, Transformers, etc., while simultaneously working alongside other film industry giants (see HERE) to coordinate massive merchandising efforts. Despite all the vitriol many fans continue to spew in its direction, Hasbro has clearly shown them (and Mattel) that there IS a future for toy production. And while that future may not include GIjOEs or Barbies, it will certainly include profits made from toy sales—LOTS of them.
Move Over Traditional Toys—Virtual Reality is Here NOW
On top of everything else we’ve discussed, we’d be remiss not to mention the impending arrival of virtual reality (VR) systems. Recent breakthroughs have solved the majority of nagging technological and biological hurdles (4K resolution refresh rates, dizziness, headaches, etc.), and promises of very near future “life-like” immersion will make playing with traditional toys seem as obsolete as newsprint is to the internet. The latest TIME magazine goes into this subject in great detail (see cover above) and VR’s impact on the future of entertainment and toys promises to be profound.
Bottom Line: We’ve discussed the topics of shifting consumer buying habits and evolving toy preferences many times over the years. The days of children playing with imagination-dependent toys may largely be behind us as a society; or at the very least, are becoming seriously endangered. The future of 12-inch Hasbro GIjOEs is already known. The future of Mattel’s 12-inch Barbies now falls into question. Fans have to wonder, what exactly will children of the future be playing with? And what effects will those toys (both traditional and virtual) have on their shrinking attention spans, imaginations and overall cognitive abilities? Will kids be jumping for joy like the dude in the TIME cover photo? Or will they be drooling over in a corner without an original thought inside their impressionable little heads? Let us know what YOU think. Please leave a comment today. Thanks!