Hitching a toy to a star

Superhero movies create potentially record-breaking licencing opportunities for toymakers

Superheroes wage some of their deadliest fights on the big screen. But this year, the toy aisle may be the bloodiest battlefield. Captain America, Darth Vader and even Cinderella will all battle for shelf space, along with myriad other toys based on big Hollywood films coming out this year.

Among the anticipated movies with toy tie-ins are “Jurassic World,” the fourth installment of the Universal Studios’ series; “Cinderella,” a live-action take on Disney’s classic princess; and “Avengers: Age of Ultron,” based on Marvel’s comic book franchise.

Toymakers have been salivating over the next “Star Wars” film, “The Force Awakens,” the pièce de résistance in a year packed with plenty of heroes, action figures and animated monsters. But absent from this year’s Toy Fair 2015 are some “Star Wars” toys specifically tied to the next movie, because Disney presumably wants to keep the suspense going until closer to the film’s release in December.

All of these movies represent potentially record-breaking licencing opportunities for toymakers. But some experts question whether the $22 billion toy industry can expand enough to accommodate what could be a glut of new products. “It’s always a challenge when you have this many big films,” said Marty Brochstein, senior vice president of industry relations and information for the Licensing Industry Merchandisers’ Association. “Everybody’s trying to stand out, and it’s a very tough thing.”

Licencing was simpler when “Return of the Jedi” came out in 1983, or even when George Lucas’s first prequel came out more than a decade later. Technology had not yet spawned a whole new category of digital games. Movie studios were also not as dependent on the next line of lunchboxes and backpacks, or carving up licencing rights into smaller and smaller pieces. But as newer, often nimbler toymakers emerge to compete with giants like Mattel and Hasbro, Disney and others saw an opportunity: Sell rights to the best product, no matter how obscure or specific it might be.

Jakks Pacific, for example, made a name for itself by creating oversize dolls and action figures, something other toymakers had hesitated to do until the company’s 31-inch Darth Vader established a presence. Its large-scale Cinderella dolls, Minions figures and “Star Wars” action figures will appear in toy stores this year around the films’ releases. “It’s really being creative and finding that category where you can get an available license,” said Tara Hefter, the vice president of licensing at Jakks Pacific. “We’ll take more risks with technology or new categories.”

Sales of character-related merchandise – which includes products based on TV shows, movies and celebrities – grew to $51.44 billion in 2013 in the United States and Canada, the highest amount in the post-recession era, according to data from the licencing association.

Some toy industry experts say that the juggernaut of “Star Wars,” coupled with the year’s other big films, could put the licencing business on track for better sales than the industry has seen in years. Toymakers will begin revealing products at the Toy Fair. There will be oversize Minions dolls, Minions Play-Doh and even Minions bowling pins. Hasbro has the rights to make official “Jurassic World” Raptor Claws, hand puppets and dinosaur figures, but a rival toymaker may unleash a robotic dinosaur.

Manufacturers can also piggyback on movies unofficially: Parents raced to buy Hasbro’s Nerf Rebelle bow and arrow set, for example, after the first “Hunger Games” film came out in 2012. Dinosaurs are also expected to have a huge presence at the Toy Fair this year because of “Jurassic World.” The new toys will be competing with products retailers already sell, like Teenage Mutant Ninja Turtles play sets, Power Rangers action figures and Transformers.

Sales of Hasbro’s Spider-Man and Transformers toys can spike more than 60 per cent in years with a respective movie release, according to data by Sean McGowan, an analyst with Needham & Company, and then fall by just as much the year after. “Generally, people like what’s new,” said, Jim Silver, the editor in chief of TTPM, a toy review website. “So the question is, What’s old that’s going to take a hit?”

Toymakers face the challenge of selling new products while keeping older products fresh. Hasbro promotes its Transformers line with an animated television show, theme park rides and even an annual Transformers convention. “You hope it takes away from your competition, not your own brands,” Silver said. “You don’t want to be stealing from Peter to pay for Paul.”

Characters and spaceships

To go bigger, toymakers sometimes think smaller. For instance, Hasbro, which holds some of Marvel’s most prized toy licenses, added a smaller scale for its “Guardians of the Galaxy” toys last year, which allowed the company to offer a larger range of characters and spaceships from the movie. The toys took up less shelf space, which made retailers happy, and cost less, which made parents happy. The strategy was so successful that Hasbro will repeat it with the coming toys from “The Avengers: Age of Ultron.”

One might think that a big studio film would mean big toy sales, especially if that movie did well at the box office. But that is not always the case. “It’s risky to assume that just because a big studio is putting a lot of money behind a movie that that’s going to translate into toy sales,” said McGowan. “The retailers have to decide what they’re going to back, and they can get nervous about allocating shelf space in a crowded year.”

Retailers were stuck with a glut of unsold “Green Lantern” toys after the movie failed at the box office, and distaste for anything related to Jar Jar Binks hurt sales of “Star Wars” merchandise. Gauging consumer interest can be tricky because manufacturing starts long before a movie is released. “The biggest key is to align with our partners,” both the licensers and the retailers, said Doug Wadleigh, the senior vice president for global brand marketing at Mattel.

In the toy business, like the movie business, the winners can be as unpredictable as the losers. Manufacturers hustled, for instance, to come up with products for “Frozen” after the film came out at the end of 2013, and the dolls and play sets went on to become some of the best-selling items well into last year.

“We always knew we had a hit on our hands with the movie, but the impact it’s had on pop culture is truly remarkable and something that doesn’t come along every day,” said Josh Silverman, the executive vice president of global licensing for Disney Consumer Products. Major toy companies passed on the first “Toy Story” movie, not wanting to take a risk on an untested property. Just a few Woody and Buzz Lightyear toys debuted with the film, until the characters’ increasing popularity raised the demand.

And the success of the original “Star Wars” in 1977 took retailers by surprise; related toys were unavailable on retail shelves and had to be ordered by mail. And no one expected the squishy little Minion characters from “Despicable Me” to become the breakout stars, even earning a headliner role in the series’ third installment.