Avengers Is a Hit! But is it good for the toy industry?

Richardglobalheader (4)
The-Avengers-2012-Movie-Title-Logo
The Avengers movie has scored a huge hit at the box office.  It is the biggest three day opening in movie history passing Harry Potter.   Gerrick Johnson of BMO Capital Markets has dubbed it the “uber-sequel” stating in his May 4 Hasbro report that “Avengers should be considered the “uber-sequel”. While it may be the first Avengers movie, the characters in the film have had six prior movies between them: Iron Man (2), Hulk (2), Thor, and Captain America.”

The-Avengers-movie-review-2012But is it good for the toy industry?   After all, movie tie-in sales have been lackluster as of late and the movie and toy industries could use a hit. 

Johnson is not so sure.  Prior to the movie’s release he wrote as follows:

We think retailers are using the Avengers event as an opportunity to bring out from the back room left over Iron Man 2, Thor, and Captain America product from last year. A quick check at any Toys “R” Us store will indicate that the retailer is doing just that, with about half of its eight feet of in-aisle space for Avengers comprising old, unsold Iron Man, Thor,

 


and Captain America product from the last two years. The savvy toy retailer now has the chance to sell at full price what otherwise would have been marked-down clearance merchandise. This, of course, comes at the expense new orders to HAS [Hasbro].

It’s interesting that what made this movie strong, a long slow process of setting it up via prior movies about individual characters, is what makes it a weak tie-in movie.  Simply put, children and collectors already have a lot of in-home inventory so why want more.  In addition, retailers agree and see this as a time to move out old inventory.

I do think there is some very good news here.  Obviously, a solid plot and a good director plus prior character building produced a big box office.  Now we just have to figure out how to turn that into toy sales.

 

 

2 thoughts

  1. It’s really a matter of how optimistic licensees and retailers were when ordering Avengers products. The Lego Avengers products in particular are posed to do big business, but some of the old-looking Hasbro stock may actually be miss leading.
    Walmart, Target, Toys R Us, and other giants already clearanced out their Iron Man 2, Captain America, and Thor product stock. The product that is appearing on shelf over the last few weeks is not retailer backstock. These are new assortments of previously released product. Is this manufacturer backstock? Probably. None of these Iron Man 2, Cap, and Thor products are brand new molds, but the assortments do not match those previously released in stores. Many of the Iron Man decos are actually appearing for the first time.
    Retailers and manufacturers did suffer lower than expected sales for Thor products, but Captain America and Iron Man products remained high sellers through the holidays.
    Interestingly, a lot of the Avengers movie action figure products from Hasbro are actually rereleases. Hasbro reduced articulation on existing molds, grabbed unreleased products from dormant lines, and repainted to fill the majority of the line.
    I look for the Avengers action figure line to be a big seller for Hasbro through Christmas and beyond. The action figures are popping up at Walgreens, CVS, Jewel, and others in addition to the major toy retailers. Despite an assumed over saturation of Thor, Captain America, and Iron Man in the toy aisle over the last few years, this line is selling out fast.
    Don’t yet under estimate the level of interest garnered by a film that, within the shortest timeframe in history, passed $1B worldwide…though it will be interesting to see if buyers hedged the right bet this time!

  2. Richard,
    I feel the biggest impact would be felt if there was an expectation of sequels to the movie. There’s so many distractions for consumers in todays society. How do you keep the excitement going until Christmas or other peak buying periods.
    FYI, my wife and I are just venturing into an online toys store in Malaysia. I look forward to reading your articles.
    Best regards,
    Philip Polaski
    Kids Toys Malaysia

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