Why Hasbro Dominates Mattel in the Action Figure Aisle

Today when you go to the local retail outlet to search for your favorite action figure, you usually have to go to the back part of most any store to […]

Today when you go to the local retail outlet to search for your favorite action figure, you usually have to go to the back part of most any store to find your favorite toy. As you make your way to the back of the store you hold your breath with anticipation. Each step quickens as you get closer and closer to the toy aisle. Once on the toy aisle you scan each and every peg for the newest or rarest action figure. One thing that you will notice is that Hasbro dominates the toy aisle with such figures as Captain America, Iron Man, Thor, G.I. Joe, Transformers, and Star Wars.

As you search for your favorite Mattel figures, the shelves seem to be full of old stock or empty. Where are the DC Universe figures? Why does Batman come in so many different variants? Why are the same three Young Justice figures still here? What about the cool Masters of the Universe and Ghostbusters figures? What about Voltron? These are the same questions I ask myself. If you walk over to the pink aisle, it is loaded with Mattel products and also the car aisle has Hot Wheels galore. It seems Mattel does not have an issue with keeping theses items on the shelves at the local retailers.

First, look at the importance of toys to the toy companies. In the book Toy Wars, by Eric Clark he discusses toys are a big business in the United States. Only 4 percent of the world’s children live in the United States, but accounts for 40 percent of the world’s toys and are purchased here. Toys are a huge profit for toy companies in the United States. This is about supply and demand. Capitalism takes a roll of the dice and comes up with a huge win for the toy companies. According to a Bloomberg report in 2010, there were around $75 billion dollars of toys bought and sold around the world. Out of that 75 billion, almost 22 billion of those toys were bought in the United States.

The history of both Hasbro and Mattel are different. In 1959, Mattel launched Barbie and she was geared toward girls. Five years later, in 1964, Hasbro launched G.I. Joe and he was geared toward boys. Hasbro was the first toy line that was dedicated to boys. Mattel’s strength is in Barbie and her female following. Mattel did not enter the boy toy aisle until 1982 with the introduction of He-man and the Masters of the Universe. At this point, Hasbro has had 18 years of experience in providing toys for boy.

In the early 1980’s, Hasbro or Mattel did not have the most popular toys on the shelves. Star Wars was the front runner from 1977- 1983. The introduction of smaller and more affordable action figures killed the Mego action figures and G.I. Joe. The Mego Company did not survive the battle for the toy aisle. The larger G.I. Joe figures were also sent to the clearance aisle with the introduction of the new smaller figures. However, Hasbro adapted and introduced a smaller G.I. Joe figure. Due to the success of Hasbro toys on the toy aisle they would eventually buy out the bankrupting Kenner toy company and absorb Star Wars in to their franchise. At this point, Hasbro was the clear front runner for the action figure.

Mattel looked like it had a made a Master of a decision with He-Man. Both boys and girls enjoyed the He-man and She-Ra toy lines. Mattel would also strike a deal with Marvel for its Secret Wars series and for a few years it looked like Mattel would be the Captain of the toy aisle. However, good things don’t last forever, and He-Man and Marvel would fall out of favor with children. For the next 30 years, Mattel would struggle with new ways to keep Masters of the Universe on the toy shelves. During this time Hasbro would flourish with Transformers, G.I. Joe, and Star Wars. After the 21st century, Hasbro would also acquire an old friend of Mattel, The Marvel superheroes. Mattel would strike back and acquire the DC licenses that were previously held by the long deceased Kenner toy company. Hasbro will change and evolve with each new toy generation. Mattel would stagnate and pollute the toy gene pool with outdated and poorly designed figures. Just a little over five years Mattel would catch up with Hasbro in articulation and design. However, Hasbro still dominates the action figure aisle.

Hasbro wants to move forward with new ideas and Mattel does not want to let go of the past. If you walk over to the pink aisle, you will see the same problem with Barbie. She has not changed much to meet the modern society. Look at the older Barbie figures anywhere on the internet and you will notice small changes. Also, look at Hot Wheels and there is the same old car that was produced twenty or thirty years ago.

This seems to be the pattern for Mattel to produce the same old stuff. This can work in their favor because there is always a flow of fresh children introduced to the toy aisle. The one thing that the toy companies will not run out of is children and to a child everything is new to them. So Mattel can keep producing the same old stuff with a few new updates. This is different with the action figure; new molds are constantly being created and this can drive up the cost of toys. Adult collecors look for something different with their toys. They want lots of new accessories and poseablilty. This can be a cost factor for a company that does not specialize in action figures.

The next step for Mattel is to create club exclusives. This is not a new idea in the toy world. Hasbro has already done this with G.I. Joe and Star Wars. However, Mattel is doing this as an alternative to loading the toy aisles with new figures. Mattel has had a strong success with Masters of the Universe and Mattel has introduced club exclusives for DC Universe and Voltron. It seems that Mattel is tucking its tail between its legs and running for the cover of the internet and does not want to compete with Hasbro on the action figure aisle.

The internet is becoming a good place to buy and trade toys. We can now search toy websites for the best deals on action figures. However, this does not buy in to the children’s market; the screaming kid on the toy aisle may become a thing of the past. Kids are impulsive, they see a toy on the aisle and the want it RIGHT NOW!!!!! The introduction of the toys exclusive to the internet and internet retailers takes the children out of the equation. Mattel has Barbie and Hot Wheels, so why do they need to compete with Hasbro on the action figure aisle?

The creation of the club exclusive cuts out the retailer. The retailer makes a certain amount of money off each action figure. Mattel can now keep that extra money instead of letting the retailer make a profit. The cost of toy production is on the rise in China. Both Mattel and Hasbro will be affected by Chinese labor cost. In 2012, we will see a rise in equality among the Chinese labor force. Many companies cannot absorb the rising cost and will have to increase the cost of their product. Since the cost of product is on the rise, American companies will have to seek out cheaper manufacturing sources for their product. Also, the rising cost of oil increases the toys prices and oil is the major component that plastic is made from. Other factors are toys have to meet U.S. safety guidelines.

This can leave collectors wondering that with all the rising cost that we are not paying $30-$40 a figure and again, if they were $30-$40 we would probably not be buying them. In defense of Mattel, they have seen the rising cost of these factors for many of their toys and created the club exclusive. The reason toy companies exist are to make a profit. Mattel may realize that it may be too expensive to keep many action figures on the shelf for collectors. It is easier to keep the cost of production for Barbie and Hot Wheels because of the high volume being produced and the reuse of old molds. This is problematic for the Mattel Action Figures. The production runs are much lower and new molds are constantly being sculpted for new figures.

The next thing that needs to be discussed is the quality of the action figure. I remember being a kid and launching my DC Super Powers Superman in to the air via a large slingshot. Superman flew several feet in to the air and landed very hard on the concrete driveway. When I picked the figure up off the ground, it had few paint scuffs from hitting the concrete, but it did not break. I would never do this with my current DC Universe Superman. The quality of many of the Mattel figures is horrible; joints break easily, limbs are stuck or warped permanently, the paint application is usually sticky or just plain bad. I have also bought many of the Hasbro figures and I have had very few issues with many of the figures. The worst that come to mind is the current Wal-Mart exclusive Captain America modern figure whose left leg is loose, but other than that most of my Hasbro figures that I have opened have been in great shape.

The last problem I wish to discuss is distribution. This is a relatively new problem to toy collectors. This problem with distribution has made many collectors just give up collecting certain toys. There seems to be no rhyme or reason why toys show up in certain areas and not others. I wish to introduce my personal research to this subject. This is just a hypotheses and further research is needed. I have spent countless hours searching for toys. My research areas include: Arkansas, Tennessee, Florida, Missouri, and Mississippi. I have also spoke with general and distract manager of retail stores and have also spoken with employees at the distribution centers.

The distribution also seems to be problematic with Mattel action figures. Every retail outlet has a certain way that toys are distributed. When a warehouse is loaded with toys full, it is easy to decide that every store needs them. However, what does a retailer do with the low amount of high cost figures. Well, to solve this problem distribution has to be selected. When toys come to your area, it is all about the socioeconomic status of the surrounding area. Toys are bought with disposable income. Next time you are searching for toys take a look at the area around where the retail stores are located. Middle-class and upscale neighborhoods have more disposable income; therefore, in theory, the local retailer will have a better toy department. A retailer in a lower income area will have the bare essentials and warehouse surplus figures, including: Thor, Captain America, Star Wars, and the dreaded Green Lantern figures. You will probably not see $15 figures in that store. However, if you look at Barbie and Hot Wheels, you will find the same basic toys in that store. High tourist areas are an anomaly; it could easily be a hit or miss with action figures.

So far what will 2012 will bring us from our favorite toys companies next year. There are many new movies and anniversaries that will keep the toy companies busy next year. As long as Hasbro and Mattel make toys, we will buy them because we love them. Hasbro is the leader of the action figure and they will dominate the action figure aisle with movie based toys such as G.I. Joe, Avengers, Spider-man, and the 3D return of Star Wars. Mattel will be more exclusive and use the internet to sell action figures; digging deeper in to the DC Universe for obscure figures, the 30th anniversary of Masters of the Universe, and the return of Voltron. Of course, don’t forget the new Batman movie and we will see many renditions of Batman at the local retailer. Lastly, Mattel will continue to dominate the pink aisle and the car aisle.

Chip Carroll
Senior Staff Reviewer

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