A long time ago, in a Hollywood far away, tie-in movie toys were an afterthought, if that. Then kids picked up the first plastic Han Solos. Ever since, merchandise sales have helped to sustain the success of some of the biggest movie franchises, but is that about to change?
An overall decline in toy company profits, reported by Bloomberg, suggests that the movie action figure may be going out of fashion. Lego, Hasbro and Mattel reported losses last year, while Toys R Us is closing down. This could be bad news for film franchises that rely on merchandising for much of their profit.
The first action figure was actually inspired by Barbie, in 1959. At a time when children’s toys were even more gender-polarised than today, Stanley Weston pitched Hasbro a doll to appeal to boys. The soldier doll became GI Joe in 1964, and the term “action figure” was born. Comic book and TV figures started springing up, and such was the success of the first Star Wars film, in 1977, that toymaker Kenner ended up producing empty boxes with certificates promising tie-in action figures as soon as they became available. Soon, most big-budget family films had got in on the act, sparking interest from adult collectors as well as children.
Star Wars producer Gary Kurtz claimed that Star Wars made three times as much on toys as it did on films, while creator George Lucas said: “All the money is in the action figures.” Lucas famously retained licensing and merchandising rights to Star Wars in exchange for a $500,000 directorial fee. The result made him a billionaire.
With every big new franchise, the official numbers started to mount: while Harry Potter movies made $7.7bn at the box office, the value of the merchandising is estimated at $15bn. Toy Story 3 made nearly $10bn from its action figures and other merch – 10 times what it took at the global box office.
In a postmodern twist, the phenomenon has led to several franchises specifically designed to sell pre-existing toys. Mattel’s Masters of the Universe and Hasbro’s Transformers both began as toy lines before getting their own movies and TV shows in the 80s, and the appeal spread beyond the perceived male market, with My Little Pony (Hasbro) and Care Bears (owned by a division of a greeting-card company) also spawning saccharine series and films.
That trend saw a resurgence in the noughties as studios defaulted to known franchises: Transformers got a seemingly unending reboot from Michael Bay, and GI Joe finally landed his own movie, for better or worse. The Lego Movie (2014) was a rare toy tie-in to earn rave reviews from film critics – but now even Lego itself has suffered a sales fall – its first in 13 years.
So why the downturn? Gene del Vecchio, a marketing professor and the author of Creating Blockbusters!, says: “Competition from video and mobile games has diminished the interest in action figures.” The toys, he says, “allow a child to fantasise about taking on the role of a heroic character. Video and mobile games greatly enhance that ability. The age appeal of action figures has been declining for decades due to the rise of video games.”
It certainly seems that kids are dropping their toys at a younger age: not just maturing earlier, but distracted by a host of entertainment choices. “Really, kids just want a decent mobile phone,” says veteran collector Marshall Julius. “Maybe a PS4 or Xbox when they’re older. Physical stuff is too analogue for them.”
Speak to a parent of a child approaching their tweens and they tell a similar story. “My 10-year-old, William, was once heavily into movie/TV merchandise: Thomas the Tank Engine, Cars, Star Wars, Lego, Pokémon,” says Emma Harrison, a teacher who lives in Portsmouth. “Now, he enjoys watching the Star Wars and Marvel films, but no longer wants the toys because he has grown out of them, or plays their games on the Xbox. He and his friends say they now like to keep the action figures as ornaments to look at and only to play with once in a while.”
Sales experts have noticed a specific age when children begin to lose interest. “From my experience, kids are most interested in movie merchandise from about three to eight years old,” says Lisa Wragg, who worked in children’s licensing for many years. “At about eight, it tends to wane as they get more into music, artists and social media.”
Amanda Moore, whose daughter Haidee is nearly eight, backs this up. “Haidee thinks most movie toys are very age specific and, as a result, she grows out of them fairly rapidly. Where she once had everything with Frozen on, now she is not so swayed by the tie-ins. I think the pull lessens as you get older.”
That said, a new generation is always coming, and just because the big retailers are suffering, it doesn’t mean that toy sales are falling across the board. “The global toy industry grew by about 1% in 2017,” says Del Vecchio.
So are online companies taking a bigger piece of the pie? “Everything’s easier and cheaper to buy online,” says Julius. “Amazon killed off smaller retailers. Now it’s strangling the bigger ones. Of course it was fun wandering the aisles of Toys R Us with money in your pocket and the intention to buy something fabulous, but it’s cheaper to buy it from Amazon, and easier to have it delivered. That’s how I shopped for my kids, for the most part.”
If a specific movie action character isn’t selling as well these days, that may be down to increased competition, too. “Consumers have more and more licensed characters to choose from,” says Del Vecchio. “In 2000, only two films in the top 10 US box office hits would have been likely to generate a licensed character toy, X-Men and How the Grinch Stole Christmas, perhaps Mission: Impossible II. But in 2017, nine out of the 10 top films had licensed characters associated with them, from Star Wars to Beauty and the Beast to Wonder Woman to Thor. So, consumers are spending about the same amount of money on toys in total, but now they have far more choices to spend it on. The battle is over the share of a parent’s pocketbook.”
Julius thinks the increased choice has impacted on the quality of the products. “Older nerds with disposable incomes will happily lay out for deluxe action figures from specialist companies such as Hot Toys, and high-end Lego products. Kids, though, they have grown up in a world where every other movie has its own line of merchandise, and that merchandise is often quite poorly produced. It is not special any more. There’s too much to choose from, it’s overpriced, overhyped and ultimately just amounts to so much clutter.”
Supposing the action figure really is in jeopardy, how might this affect the movie industry? Given that superhero movies make up a huge part of the market, all eyes will be on Marvel and DC, although you will have to wait a while to see a change: these growing universes plan years in advance. The Star Wars merchandise numbers were surely one of the reasons that Disney splashed out on the franchise, although box office figures have been through the roof, thanks to high-quality films as well as marketing and brand loyalty.
These box office figures are key to the merchandise’s success, says Del Vecchio. “Sales of action figures rise and fall with the popularity of the latest film franchise. While the leading franchise in 2017 was Star Wars: The Last Jedi with about $1.33bn at the worldwide box office, it was not as powerful as the 2015 Star Wars: The Force Awakens which did about $2.06bn. Both were phenomenal, but money at the box office often equates to money in the toy aisle, pure and simple.”
So next year’s Star Wars: Episode IX will need to bust the box office to win the action figure battle –and the introduction of new characters in the spinoff movies may help, too.
There is one movie that is exceeding merchandising expectations: Black Panther – which, it is thought, will make $250m on top of its $1bn global box office. The film was noted for opening the comic book genre up to larger black audiences – perhaps the toys will have the same effect.
If this means more Black Panther movies, and more original stories, so be it. But if the wider problems for merchandising eventually spell the end for the Transformers, you won’t find me complaining.
