TDmonthly Magazine!
March 2013 | Vol. XII - No. 3


How is the toy space shaping up for 2013?

Lutz Muller Shares Buyers' Predictions for the Biggest Toy Companies in 2013

A few days ago, TDmonthly ran an article "2013 Toy Fair – a Review by Lutz Muller" in which I reported the impressions that five national buyers for very large retail chains, three from the U.S. and two from Europe, took away from Toy Fair. I just now went back and asked them how they saw things shaping up for the leading North American public companies for 2013. The answers were pretty uniform across major retailers and across two continents:

1.    MATTEL
The 2013 offering appears to be stronger than what the company had in 2012 when they did not have any major TV series, and in the movie space had Batman, Brave and Madagascar. This year they have Man of Steel and Max Steel, plus they are making a strong comeback with Masters of the Universe. In addition, they are launching 1966 Batman in the context of the ongoing TV series (as well as WWE).

In the Fisher Price area they not only have Croods, Monsters University and Turbo but also the wooden Thomas range taken over from the Learning Curve, and Mike the Knight launched in the US.

In addition, Fisher Price will benefit from Planes – an animated movie of the CARS genre. In the Doll category, they have Frozen and the Scaris TV series for Monster High, and they have a fairly interesting offering in Barbie – specifically the Barbie in the Pink Shoes DVD which has gone off to a great start.

Overall Conclusion: given the depth of Mattel’s new product offering this year, the company is likely to show growth in total sales for the year, probably in the 3% to 5% range organically – that is, without any currency impact.

In this context I also have a correction to report. In my most recent TDmonthly article, I said about the iPad "that the toy manufacturers have cottoned on to this and about 30 of the Toy Fair exhibitors had products that interfaced with the iPad tablet. Of these, Mattel was the leader with about twenty toys – from the iPotty to the iDoll House and the iFirehouse to the Barbie Digital Makeup Mirror." Dale Gago (who represents New Adventures, a brother and sister team owning AppVentures) pointed out that both the iDoll House and the iFirehouse were not Mattel’s products but rather belonged to New Adventures. Thank you, Dale. I also advised the buyer who had given me this information on the basis of erroneous notes.

2.    HASBRO
Their action figure movie properties appear in their totality somewhat stronger than what they did in 2012 when they were backed by Spiderman and the Avengers, both of which were real blockbusters. This year they have G I Joe, Iron Man, Star Trek, Wolverine and Thor. In addition, they have TV series in Marvel's Avengers, Spiderman and Hulk.

Kre-O will do better this year because they will have new properties in G I Joe and, more importantly, Star Trek, plus the TV-backed Beast Hunters Transformers. Beyblades is expected to continue declining and Nerf is probably going to stagnate, unless Nerf Rebelle really takes off. B-Daman could represent an upside surprise in the Boy category.

Their all-important board game category is enhanced by DM2 for Monopoly and Operation, but there is no sign at this point of their widely rumored break-through board game properties in development over the past couple of years. In fact, Hasbro benefited last year from the inventory shortages besetting Lego board games, but these are now coming to an end.

As for Preschool, while there are a number of new Sesame entries, they are not expected to be sufficiently strong to halt the decline in the category overall, particularly in view of Mattel’s very strong 2013 line-up as well as the increasing momentum of their HIT properties rollout.

The Girls category is likely to benefit from the new Furby entries (particularly Furby Rocker which has been launched and is doing brilliantly) but Littlest Petshop is expected to decline further in the face of Lego Friends and Mega Barbie.

The five buyers’ overall conclusion is that unless there are major surprises in the Board Game category for fourth quarter, the company is likely to see another flat to slightly declining sales picture in 2013.


According to the five buyers, LeapFrog really had nothing new at Toy Fair except for Disney-sourced third-party eBooks for the Leappad and the Leapster. Given the momentum in place for the LeapPad 2, they think that the company is likely to see continued growth in 2013, particularly if their plans to move into other languages such as Spanish, German or Portuguese materialize before the fourth quarter.

There is also discussion about new LeapPad tablets for release in June this year but so far nothing concrete is known.

Also, a major caveat in this is VTech’s rumoured development of next generation learning systems which, if released before the fourth quarter 2013, could well result in a major fourth quarter downturn for LF.

4.    JAKKS

Jakks’ Toy Fair offering centered mainly on 2012 initiatives such as Monsuno and Winx. The new SKUs for Tinker Bell will continue to lend strength to Jakks’ effort in the Fashion Doll area, whereas their new Cabbage Patch products will do reasonably well in the preschool area. They have for 2013 the master toy license for Smurfs versus none in 2012. The last Smurfs movie was released in July 2011 and grossed worldwide $563 million with toy sales in the neighborhood of US$50 million.

On the negative side, according to these buyers, Jakks’ "all or nothing" throw of the Monsuno dice appears to be failing both in the U.S. and more importantly in Europe. The acquisition of the Monsuno property was designed to let Jakks break out of the vicious "weak market position stops you from getting good licenses and without good licenses your market position stays weak" circle they are facing in Europe. This does not appear to be succeeding.

Overall, the outlook for Jakks, in the opinion of these buyers, is somewhat negative. They do not see growth for the company at least in their own stores which, after all, are the major ones in the U.S. and in Europe.


The buyers were impressed by what they saw at Toy Fair and think that the company is going to do very well this year. What particularly struck them was the continuing thrust into Girl territory, following the very successful Barbie initiative late last year. Mega now has new products lined up under the Barbie and the Hello Kitty brands and is expanding into Disney Princess as well.

Also, the license for the Smurf’s movie, scheduled for release in July, is likely to strengthen their presence in the preschool category.

However, they are also facing a problem in that Hasbro’s Kre-O is going to be coming back this year, after a very weak 2012, on the strength of the G I Joe and Star Trek movie licenses, as well as the Transformers Beast Hunter TV series. If nothing else, these Kre-O entries will get shelf space at the majors, and this not at the expense of Lego.

On a more fundamental plane, the buyers feel that Mega has reached a market share where further significant gains will depend on product innovation. In short, licenses – however good – will probably not be enough to allow the brand to continue to expand its market share materially – say from the current 10% in the U.S. to a 15% level.

However, in the short run, for 2013, the buyers believe that the construction category will continue to grow significantly and that Mega will maintain or even slightly improve upon their current market share. This would mean a sales growth rate for the company in the neighborhood of 15% this year.

Lutz MullerWriter's Bio: Lutz Muller is a Swiss who has lived on five continents. In  the United States, he was the CEO for four manufacturing companies, including two in the toy industry. Since 2002, he has provided competitive intelligence on the toy and video game market to manufacturers and financial institutions coast-to-coast. He gets his information from his retailer panel, from big-box buyers and his many friends in the industry. If anything happens, he is usually the first to know. Read more on his website at Read more articles by this author


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