Chart 2
Toy Retailer Market Shares: U.S. On Dec. 31 of each year, in percent of U.S. dollar totals
$35 $30 $25
2009 2010
$20
2011
$15 2012
$10 $5
2013
next year is the move to hybrids, combining physical toys and video games—the Skylanders and the Infinitys of this world. There will be more of them, and it is only a matter of time until we see such hybrids in the doll and board game categories. Just like Skylanders has already begun to disrupt the action figure category, and Infinity the preschool space, these new entrants will profoundly upset the existing order.
The Future of Licensed Toys Toy licensing is another area where we will likely see changes. Today, 30 percent of all toy dollar sales are in licensed products, and 25 percent in units, and this is driven mainly by movies and TV series. The problem with this is that the young audience for both movies and TV is declining. In addition, the leverage blockbuster movies exert over toy sales appears to be declining—particularly for movies with several sequels. There is also the dawning recognition that licenses basically mean that you let another party—the one that owns the license—control a part of your business. Licenses can be granted and licenses can be taken away, which means that the licensees do not build a long-term asset for their business.
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Licenses will not go away, but will slowly diminish as a percentage of the total toy space—a trend that is expected to become apparent this year. In parallel, the leading toy manufacturers will probably put more muscle behind the building of their own brands—Mattel’s Monster High and Ever After High are cases in point. While these developments are significant, they do not herald a basic change in the ongoing love affair between the American public and toys. Parents will continue to look for the best toys they can afford to give to their kids for their birthday, Christmas, or other holidays. In summary, the odds are that we shall see solid growth in the U.S. toy market this year. ■
Lutz Muller has been active in the global toy and video game market since 1984. He has lived and worked in Europe, Asia, Latin America, Australia, and the U.S. His insights are based on his daily contact with toy buyers at big-box stores in the U.S. and Europe, his proprietary retailer panel in the U.S., and his third-party manufacturing contacts in China.
THE TOY BOOK • 49