Mattel and Hasbro; do they have a responsibility to the rest of the toy industry?

Do Mattel and Hasbro, by far the toy industry’s biggest companies; have a responsibility to the rest of the industry?  This was the question I asked myself as I listened, during Toy Fair,  to a similar refrain from leaders of mid-tier companies:  “Hasbro and Mattel, through a failure to innovate, are hurting the toy industry.”

The leaders I spoke with are concerned that, by putting their emphasis on endlessly synergizing and promoting existing brands, the industry’s leaders are making the toy department boring.  For example, some  argue that all of the game companies are impacted by Hasbro’s emphasis on filling shelves with multiple variations of Monopoly, Trivial Pursuit and even Jenga.  The more brand duplications there are, they argue, the less variety for consumers.  HAsbro

To me it’s like having a book store that is filled with variations of Gone with the Wind:  Horse Gone with the Wind; Chattanooga Gone with the Wind and Star Wars Gone with the Wind (which is actually, when you think about it, a very compelling and doable concept).  If this were the case all of these versions would be, in any bricks and mortar store, forcing the retailer to reduce the number of other kinds of books.  For a while, the book store would do a great business with those who are Gone with the Wind

enthusiasts but after a while, the average consumer would cease to visit the store due to its limited variety.

Mattel and Hasbro already have a responsibility to their stakeholders (employees, shareholders, suppliers and more).  Do they, however, have a responsibility to the rest of the industry?  In other words, are those who work in the industry stakeholders by default?

In my opinion, Mattel and Hasbro do not have an obligation to innovate in order to better the toy economy for the rest of the industry.  They do, however, have a self-interest that says, the more compelling the toy industry as a whole, the more people will visit the toy aisle or store and buy their products. 

Self-interest should dictate that Mattel and Hasbro get a little crazy and come up with more innovation and less synergistic marketing.  Will self-interest win out; we’ll have to wait and see.  Keep your fingers crossed.





10 thoughts

  1. Really good responses and article. The key is no doubt with the buyers. Fashion for example in many countries has seen the dominance of majors being eroded by small, fast, modern, innovative labels (and stores). Toy has a way to go however there are some really innovate small companies out there, doing great new on trend toys, it’s just now a matter of change. It will happen, and those who write about, buy, and stock some of these brands have the opportunity to set themselves apart. Lets hope we see some bravery in 2013 so the category can become a little more exciting for all!

  2. Large ships turn slowly. Innovation come quicker through small start ups. In large companies there are many filters that can kill innovation. The design staff may come up with an innovative product but then it has to go through, Engineering (not risk takers, they like the tried and proven), Quality (not risk takers, have long lists of past experiences), Marketing and Sales (they look at customer and buyer feed back) Buyer and customers (they know only what they know and have seen which is past designs and sales) For innovation to work it needs to be a company focus where all players support and drive innovation. And yes the large ships should plot that course and be the innovation leaders. The problem comes when companies allow resistance to innovation and all the justifications. Those who are not on board should be thrown overboard or the ship will sail into the sunset of mediocity.

  3. Richard, Mattel for one has stymied innovation
    over the years by buying up small/successful
    Toy Co’s,scavenging them and putting them out of business. Mattel should revisit the 60’s
    mentality of the Co and revitalize R&D.
    David Murray

  4. It is the buyers that initially start the ball rolling by identifying the particular category sold well last year … so they tell the maker (Mattel, Hasbro, etc.) that Monopoly sold very well last year, so give me a new and different Monopoly. The maker comes up with what the buyer asked for (Sellopoly)and the buyer places the order! This process repeats itself for each category in the toy isles. So who is the innovator here? It is extremely hard to get a new innovative product in at retail these days.

  5. Whoa, whose fault is this? How about the BUYERS? They are the ones who choose the 18 versions of Monopoly. Buyers may not be rewarded for diversifying their product lines nor are they looking to spend the time to evaluate new products. The process is easier just to buy from the same old companies.

  6. HI Richard–love that you are posing thought provoking questions to the industry at large. My sense is that retailers are driving boredom in the industry with their risk averse nature. Mattel and Hasbro don’t have the ability to push product onto shelves that the retailers don’t feel secure in buying.
    We are headed for a paradigm shift–the old rules no longer work…

  7. Richard, you’ve put is very well. Sadly the boardroom is engineered to look at the short term horizon – specially during a period when the toy industry is not really galloping on the growth front. I guess it will always come down to the small firms to lead the way in innovation. Personally, I wish the emphasis on movie franchisees was lesser – too much energy goes there. Lastly, I think your post on the changing tide in the Toy of the Year awards was truly heartening

  8. What a great post Richard — and I’ve heard the grumblings of this question too and think I could easily argue both sides. With store shelves filled with variations on the same product, doesn’t it make something different more appealing? Take Spin Master’s game Fibber for example — it doesn’t have a well known brand on it yet it did extremely well last year. I could also say that it’s not super exciting for a consumer to walk down an aisle with so many variations on just a couple products and that could potentially be detrimental to the industry. Or I could go the direction of saying a loved brand and consumer brand loyalty is a powerful thing. Just look at the uproar caused by Maker’s Mark this week — yikes! So what company wouldn’t want to sell more products under a beloved brand like Jenga or UNO? It think it all comes down to perspective and there will never be a universal answer to this question.

  9. What a wonderful and highly debatable question. Obviously, there is no easy answer. I think one key in this debate is that the major manufacturers could set up a system to contribute to the greater good of the industry without disrupting their existing processes. These companies keep their thought leadership broadly to themselves. I don’t think it is totally necessary, but it is certainly a challenge.
    One consideration is that Mattel and Hasbro are hardly closed off to the innovations outside of their own doors. They just usually choose not to expose secrets to direct competition. Both major manufacturers have relationships with leaders in software, hardware, mobile, social, digital, etc.
    I’m not sure that communication will help innovation (it might!) but certainly there must be a way to hold some level of social accountability. Surely Mary Couzin’s rising tide can’t be a bad thing.

  10. If it is up to stockholders, they’re happy with making their safe return- reliable (stagnant) categories. It’s the same with the videogame industry. Call Of Duty-X. FPS.
    Maybe both companies, Mattel and Hasbro, might look at restructuring to accommodate minor toy releases in order to both decrease the financial risk, while also demonstrating to shareholders that new product is worth perusing.
    When every release is a MAJOR toy release, they aren’t willing to stick their neck out.

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