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View Full Version : Star Wars toys dragging Hasbro down???



JediTricks
07-22-2003, 01:57 AM
In late '98, Lucasfilm bought 1.6 million shares of Hasbro at 35 a share. Today they're worth literally half that. So why is it that Hasbro expected a noticable revenue decline specifically from Star Wars this year? I didn't make this news up, it came from Hasbro themselves. SSG posted the current element of that news today: http://www.figures.com/databases/action.cgi?setup_file=ssnews2.setup&category=starwars&topic=31&show_article=777
and that news was from a Hasbro press release which was also added to the Business Wire.

So what's up with this? Also, were the Star Wars Playskool sets included in the part of the press release that said that Playskool was among the Hasbro lines that offset the Star Wars line's losses?

aikman8_1999
07-22-2003, 02:18 AM
Non movie year means nothing driving sales up.

Thats the excuse anyway.

Batman hasnt had a movie for a while but hurmmmmm

JediTricks
07-22-2003, 02:31 AM
I would have thought that issue would have been factored into their original estimates of the SW line's take though.

Batman for Hasbro also did very badly recently, so DC and Hasbro split up their union.

jjreason
07-22-2003, 03:34 AM
No mention of their failure to provide new stock in a timely fashion to the major retailers throughout the first 5 months of this year being a factor in decreasing Star Wars revenue (and yes, I know it's "push pull", the retailers ordering less = less emphasis on newer waves being shipped).... the comments sounded like the drop was an expected thing. I wonder if that's because of the distribution problems, or if the entire first few months of this year were planned out (saving money on distribution in exchange for the lost revenue).

I think I'd like to hear a little bit about the "strategy" involved in marketing Star Wars, what do they take into consideration? How educated are they about the problems with the hobby as the (often well informed) collectors see them? Do they care?

Jargo
07-22-2003, 08:18 AM
Let's not forget that SARS had a profound effect on the shipping of new stock. Confidence was knocked in anything orient related. A kind of global panic ensued for the first couple of months after the outbreak. It must have made a significant impact on the toymakers who have their stock produced in the orient.

icatch9
07-22-2003, 09:05 AM
I read the story too, and it was informative. Initially this sounded like more fodder for Hasbro bashers, but in fact it wasn't. The Star Wars line is a huge cash cow for Hasbro, but only in movie years. In non-movie years they are still paying the same price for the license but not brining in the kid dollars (not sure what kids are spending there money on this summer). This should be more proof that collectors a lone cannot support the Star Wars brand.

Of course Hasbro planned for this. They aren't a new company. They knew this would happen. I really think that some people (certain people) must think that Hasbro is run by a bunch of monkeys; buffoons that have no clue on how to do anything. This is a grave error and frankly makes these accusers seem dim. Hasbro has brilliant people working for them. These people went to college for many many years. These people specialize in selling, marketing, and promoting toys to children of all ages. Yet some people here would have you believe that Hasbro has lost this edge and doesn't know what to do next. That's poppy **** if I've ever heard it. The rest of the year is going to be very exciting for Star Wars fans. There are tons of new product and old favorites coming out. Yet that doesn't seem to be enough.

Here's one collector who is excited to see what Hasbro has in store for us next :D.

JediTricks
07-23-2003, 01:50 AM
Jargo, if that was accurate, wouldn't it affect EVERYTHING from Hasbro equally since it all comes from Asia?


Sure, this is a non-movie year, but the drop comes on the heels of a movie year AND if this was such a routine hit, why even mention it specifically?


Icatch, I am glad you are excited about what's coming for the line. However, I disagree about the effectiveness of the Hasbro SW brand and its employees, IMO the Saga line was a step backwards in terms of quality and the company has had to buy back tons of unsold product from retailers twice in the last year. Hasbro as a company has also been hit hard from its competition-buying frenzy of the past few years, their sales were down and they had to liquidate their Hasbro Interactive division to get quick cash to fix it. They also closed the divisions responsible for the popular POTJ line (Galoob and Kenner divisions), and then had to change their policies so no 1 brand could be more than 10% (or something like that) of their company so if it tanked (like SW and Batman did IIRC) it wouldn't hurt the company. Basically, I think that just because a big company is big doesn't mean it's still as good as what got it there. So you may feel that people who see the company as being "run by monkeys" seem dim, but the polar opposite viewpoint could be come off as equally blind.

plasticfetish
07-23-2003, 05:55 AM
So why is it that Hasbro expected a noticeable revenue decline specifically from Star Wars this year?
It looks to me like they simply predicted that they wouldn't be making as much money off of Star Wars for this quarter. No doubt and for whatever reason they saw the lull coming and decided to tighten their belts to make it through. I'm laughing at how they toot their own horns by giving "certain core product lines" credit for helping offset their predicted decrease in Star Wars related revenue. I'd just assume that most people who couldn't find one thing simply ended up spending their money on another. Looks to me like a case of nothing ventured, nothing lost. Not exactly the kind of thing that would make me rush out and buy up Hasbro stock, but it would make me a little less nervous if I already owned 1.6 million shares. (Don't forget, our economy is in a "slump" so any good news really is good news. They're obviously eager to talk themselves up and this is at least something to run with.)

Did Lucas buy that stock or was it something he got as payment for giving Hasbro the license?

JEDIpartner
07-23-2003, 01:23 PM
Well... the point is, and correct me if I'm wrong-- they can't make any money of things that aren't available for us to buy!!! :frus:

icatch9
07-23-2003, 03:59 PM
Icatch, I am glad you are excited about what's coming for the line. However, I disagree about the effectiveness of the Hasbro SW brand and its employees, IMO the Saga line was a step backwards in terms of quality and the company has had to buy back tons of unsold product from retailers twice in the last year. Hasbro as a company has also been hit hard from its competition-buying frenzy of the past few years, their sales were down and they had to liquidate their Hasbro Interactive division to get quick cash to fix it. They also closed the divisions responsible for the popular POTJ line (Galoob and Kenner divisions), and then had to change their policies so no 1 brand could be more than 10% (or something like that) of their company so if it tanked (like SW and Batman did IIRC) it wouldn't hurt the company. Basically, I think that just because a big company is big doesn't mean it's still as good as what got it there. So you may feel that people who see the company as being "run by monkeys" seem dim, but the polar opposite viewpoint could be come off as equally blind.


Your statements are interesting. First off you are correct that if I feel that Hasbro is run by a bunch of "toy gods" then I too am just as blind. I belive that the company is somewhere between gods and monkees :). Where in the spectrum I do not know.

Can you explain what you know about the department that was responsible for POTJ and what you know about thier closeing. From my understanding Kenner was bout out long ago and certainly way befor POTJ. I agree that POTJ was a great line (best to date I suppose), but it was also more expensive and many of the characters had low play value. Many of the Saga figs are still very nicely designed, and have high play value. Even if we don't like the buttons and the magnets (kids might).

Hasbro haveing to buy back product is of course thier fault. They flooded the market last year and never really recovered. I knew this may be a problem, becasue a week after AOTC premired there was something like 50 different figs avalable. No movie or toy line can support numbers like that. They seem to be paying for this mistakes, and the same figs we bought for $7 on April 16th 2002 can now be bought at KB for $1.99. Sucks to be us :(.

We as collectors sometimes have a blind eye. Sure we know how to collect and what we see at the many stores we frequent. Still, we do not know what it is like to run a major devision of a major toy company. If you ask me, limiting any one brand to only 10% is very smart. No one can predict how well a toy will do, and if it does tank then thier butts are covered.

We'll see how this all plays out. What worries me most is if what all the nay sayers are saying comes true, than this hobby will be even more difficult, thus makeing more nay sayers. So, take that as you may.

JediTricks
07-24-2003, 08:18 AM
PF, I'm afraid I don't currently know about how/why LFL acquired that stock, I'll try to remember to look into it tomorrow when I'm less tired because I would like to know myself. I *think* they bought it separate from the stock they got in the licensing deal though based on timing issues, but I'm not sure.


JP, you're absolutely right, can't make money without getting the product to market. Hasbro claims that is the fault of retailers, retailers seem to feel the same of Hasbro... I just want to buy some dang figures here people!!!


Icatch, it's pretty late for me so I'll just throw down the basics:
- In the '80s, Kenner was bought by Tonka. In the early '90s, Tonka was bought by Hasbro. Hasbro turned the Kenner company HQ into Hasbro Cincinatti division (aka Kenner division).
- After Hasbro bought Galoob, they turned it into Hasbro West Coast division (aka Galoob division).
- After the SW line's restart in '95, Hasbro dished out segments of the SW license to their various arms, 4" remained in the hands of Kenner division while 12" went to Hasbro Direct division (I don't know where they live, probably Rhode Island HQ though).
- Towards the end of Ep 1 line, Kenner became too busy dealing with Transformers: Beast Wars stuff (I think that was the line they were busy with, Beast Wars was Kenner's baby from the beginning) to handle designing many of the upcoming figures.
- I spoke directly with Galoob division's VP in charge of that division and the division's head designer on the phone right around the time Action Fleet was cancelled, each let me know that Galoob division was doing other stuff besides Micro Machines like designing half the SW line of 4" figures, taking up work from Kenner division. This was what we now know as the POTJ line.
- Right around the end of the POTJ line, Hasbro came into massive financial troubles due to a lot of factors. One of Hasbro's solutions involved closing down the various arms of Hasbro including the Galoob division offices and the Kenner division offices, and bringing some of the people from those divisions back to Hasbro HQ in Rhode Island. Some time later, the first Saga pics were revealed.


The price of POTJ was determined not by the quality of the figures, but (by Hasbro's admission) from the high cost of signing the new licensing contract with LFL. The price was a throwback to the price on the Ep1 line, originally POTJ was supposed to drop down to a more reasonable MSRP, but that didn't take till Saga unfortunately.


"Many of the Saga figs are still very nicely designed, and have high play value. Even if we don't like the buttons and the magnets (kids might)."
I have a few problems with this statement though. I don't think the bulk of the first year of Saga figs are very nicely designed, and I really don't think they have much play value at all beyond the 'quick-fix' play value (by that I mean the gimmick that is entertaining for 5 seconds to a kid but holds no lasting value for 'em) that Hasbro's been focusing on in many of their brands lately. Also, the "kids might" thing is how Hasbro saw it, as I understand it, the kid market before AOTC came out was under 30% not because there were more collectors, but because kids dropped out of the line so badly after Ep 1. The action gimmicks of the Saga line were a direct attempt to salvage that hemmoraging of their other main audience (kids) - but the action gimmicks and features feel strongly to me like decision-making via committee or vague focus group rather than a true appreciation for the line - which made this attempt to get kids an attempt at the expense of their collector market.


You're right, Hasbro did eat it big time on the first waves of Saga figures. But that goes to my initial question here, WHY are they currently still eating it? Shouldn't they have learned from the mistake a year prior, and shouldn't THAT mistake alone have learned from the Ep 1 line 3 years prior to that? But to me, it doesn't seem like Hasbro's learning much at all - case assortments are back to being disasters, short-packing is still rampant, over-shipping known-disappointments like senator Jar Jar (I know Hasbro still maintains that kids love Jar Jar, but did they SEE how much Jar Jar product was left after the Ep 1 debacle?!?), exclusives are still frustrating and nearly impossible for kids to get, stuff like that. And it's their JOBS to predict what kids and collectors will like, yet they keep cycling executives through the line so nobody seems to be able to get a good hold on what's working before they're shipped off, and those that remain keep making Senator Jar Jars with extreme poses and Force-flipping Jedi, and deluxe figures that have drastically lower quality than their basic counterparts.

I so very much want Hasbro to succeed, I want them to do so well that they pass on the good fortune to their loyal customers. But that's not what I'm seeing, I'm seeing them make the same mistakes and even sending out a few new errors as well. I don't want to be a nay-sayer, I love Star Wars, but I call 'em like I see 'em and when they claim that other core brands are taking up slack for SW, it bugs me and I wanna know what's up with that.

JediTricks
07-26-2003, 07:51 AM
Did Lucas buy that stock or was it something he got as payment for giving Hasbro the license?If I'm translating the mess of technical and legal jargon properly, this was a purchase by LFL, not a payment or transfer by Hasbro.