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Michael Rielly

Star Wars Toy Sales Fall in 2017 as Movie-Tie Fatigue Sets In

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Michael Rielly

Star Wars Toy Sales Fall in 2017 as Movie-Tie Fatigue Sets In

Bloomberg
By Matthew Townsend and Christopher Palmeri
January 17, 2018

EXCERPT:

The warning signs for the toy industry started last year when “Cars 3” -- considered a surefire success -- proved lackluster for licensees like Mattel Inc.

image.png

Now toymakers’ big bets on movie tie-ins look downright bleak. Playthings based on the “Star Wars” saga -- the franchise that kicked off the whole phenomenon four decades ago -- were down in 2017 despite a new film, “Star Wars: The Last Jedi,” in December during the all-important holiday-shopping season.

Call it “Star Wars” burnout, or better yet “movie fatigue,” said Gerrick Johnson, an analyst for BMO Capital Markets. Hollywood and toymakers have fixated on toy-friendly films at a time when kids are increasingly turning to YouTube, Netflix and social media for entertainment.

More than 20 major films, including “The Last Jedi,” had robust toy-licensing programs last year. A decade ago, it was about half that. Movie attendance in the U.S. has dropped almost 14 percent in that span.

“There are so many screens now; kids aren’t just at the movies,” Johnson said. “A movie doesn’t have the same resonance it used to.”

While “Star Wars” was still the top-selling toy line during the nine-week holiday period, it fell to second place overall last year and below the all-time high seen in 2016, according to data from market research firm NPD Group shared with Bloomberg News.

“Star Wars is a force to be reckoned with in the toy industry,” the brand’s owner, Walt Disney Co., said in a statement. “It remains the leading film-driven property for the entire year.”

Sequel Barrage

After a decade without a “Star Wars” film, Disney has released three movies since December 2015, and another one is coming in May. The latest installment, “The Last Jedi,” didn’t include many new memorable characters beyond those introduced in the preceding film, Johnson said. That left fans looking for newness elsewhere this year, leading to weaker results than expected, he said.

U.S. sales of the brand’s toys slowed in late 2017, Drew Crum, an analyst for Stifel Nicolaus & Co., wrote in a note to clients last week. This was despite “Last Jedi” being the top-grossing film released in the U.S. last year at $596 million.

Adult collectors, who grew up with the brand, are still buying a lot of merchandise when the toys come out, but demand dies down afterward, according to Johnson.

That doesn’t bode well for Hasbro Inc., which has the main “Star Wars” toy partnership, or Jakks Pacific Inc., which has a secondary license. Jakks said it couldn’t comment on “Star Wars” sales, but that merchandise tied to “Moana,” another Disney film, “remains very strong.” Hasbro declined to comment.

The “Star Wars” performance could hinder Disney’s bid to revive growth at its consumer products division, where sales fell 13 percent to $4.83 billion for the fiscal year that ended Sept. 30.

Dragged Down

The September bankruptcy filing of Toys “R” Us Inc., which makes up about 15 percent of the market, added to the challenges for “Star Wars” sales growth this year, though the company continued to market the toys.

Visitors to the Toys “R” Us store on Los Feliz Boulevard in Los Angeles recently had plenty of “Star Wars” merchandise to choose from. A whole aisle included everything from a $3.99 Millennium Falcon Hot Wheels car to a $250 AT-ACT remote-controlled vehicle that walks and fires Nerf projectiles.

Tracey Gordon, a full-time mom from Glendale, California, shopping at the store, said her three boys, ages 2 to 7, aren’t “Star Wars” fans even though she wore a Princess Leia costume on Halloween for years when she was younger.

“It’s a generational thing,” she said, adding that her nephew likes the toys largely because his dad “drags him to see the movies.”

...

Even more toy-licensed films are scheduled, including the prequel “Solo: A Star Wars Story” and new Transformers, “Fantastic Beasts,” “Jurassic World” and superhero fare. The lesson toymakers will draw from the 2017 slate is that they can’t just rely on the movie to do the marketing anymore.

“There is a new paradigm,” Johnson said. “Just because there is a movie with a toy tie-in doesn’t necessarily mean it’s going to work. It used to mean it would work.”

SOURCE: https://www.bloomberg.com/news/articles/2018-01-18/-star-wars-toy-sales-fall-in-2017-as-movie-tie-fatigue-sets-in

 

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Santa Johnathan

Disney has certainly milked this cash cow dry...or almost. My biggest concern is SO much Star Wars that people are sick of it. I love Star Wars but they should be producing content like a reserve label fine wine...not an all-you-can drink fountain drink. 

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Michael Rielly

Personally, I think Disney has ruined Star Wars. The release of a Star Wars movie used to be a major event -- something you looked forward to. Now they have one almost every year. It's too much. I consider myself a fan, but after the last two movies, I am not even interested in The Last Jedi. Another part of my childhood ruined.

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