'Star Wars,' 'Minions' to Lead Record Year for Toy Industry
Licensed toys, which includes Hollywood-created intellectual property, represented 31 percent of total toy sales ($5.7 billion) and showed an increase of 7 percent in 2014, thanks in part to 'Frozen' mania.
A version of this story first appeared in the Feb. 13 issue of The Hollywood Reporter magazine.
Call it the perfect storm of the toy world.
After a strong year for film and TV licensing in 2014, expectations are in the stratosphere for 2015, led by several blockbuster franchises all releasing new installments: Star Wars: The Force Awakens, The Avengers: Age of Ultron, Jurassic World, Minions, Fantastic Four and even Peanuts.
They are all movies that appeal to the target audience of youngsters and collectors. They are expected to drive toy, video game, apparel and other merchandise sales to new record levels.
"It looks like everybody has their ducks in a row, and all signs are positive," says Marty Brochstein, senior vp industry relations and information for LIMA, the licensing association. "There are a lot of big properties out there that have proven in the past to be very toyetic — we're talking sequels — and a lot of things that promise to be pretty good."
U.S. retail sales of toys generated $18.08 billion in 2014, compared with $17.46 billion in 2013, an increase of 4 percent, according to the NPD Group.
Licensed toys, which includes Hollywood-created intellectual property, represented 31 percent of total sales ($5.7 billion) and showed an increase of 7 percent in 2014 thanks in part to Frozen mania. The surprise hit was also a surprise at toy stores, which scrambled to meet demand, with sales eventually exceeding $531 million for last year.
The anticipation of a particularly big year for movie-related merchandise licensing is building excitement among studios, licensees and retailers on the eve of the annual New York Toy Fair, which takes place Feb. 14 through Feb. 17.
"What we're seeing out there in the trenches is there are four titles dominating the conversation," says Stephanie Sperber, Universal president of licensing & partnerships, "and thus the shelf space [in toy retailers]." (On Thursday, Sperber announced that she would be leaving Universal after nearly two decades.)
The titles Sperber predicts will dominate along with Star Wars are Avengers, also from Disney, Universal's Jurassic World reboot and, especially, Minions, which is getting a supersized global push.
In particular, the return of Star Wars in December should boost numbers significantly. "It's the industry behemoth," says Brochstein.
In 1999, when the original Star Wars movies were re-released and a new Star Wars trilogy was launched, sales of its licensed merchandise spiked by 400 percent within a few months.
Disney, which for the first time is handling worldwide Star Wars licensing, is holding back many details until closer to release. It did recently reveal that along with Hasbro, global licensees include Lego, Mattel, Jakks Pacific and Rubies. "Our teams have designed product lines that will deliver incredible play experiences while preserving the surprises filmmakers have in store for audiences in December," says Josh Silverman, executive vp global licensing at Disney Consumer Products.
Minions, from Universal Studios, spins off from the two successful Despicable Me movies. Licensed toy sales really took off with the second movie, and surprisingly, according to Sperber, have remained fairly strong in the past year even without a new release. "It defied the typical pattern," says Sperber, "and played more broadly in terms of ages than expected — and the video game didn't stop."
That game, Minion Rush, was expected to sell about 25 million downloads over two years. Instead, says Sperber, it has sold over 500 million in less than a year and a half. There will be new games coming out tied to the release of Minions July 10.
Despicable Me, produced by Illumination Entertainment, was also notable because of the cleverness and edge to many of the licensed toys (remember the Fart Blaster?), led by those from master licensee Thinkway of Hong Kong. For Minions, there is even more use of technology to create toys that do everything from play guitar to fall down laughing and then get up again.
Minions is being supported by a huge 850 worldwide toy licensees, up from 250 for Despicable Me 2. Much of that is international growth, "and we're not close to being maxed out in terms of the number of licenses," adds Sperber.
Sperber is also very high on the return of the dinosaurs in Jurassic World, continuing a series of blockbuster movies dating back two decades.
Most of the Jurassic World toys target boys 4-11, and then there are three digital games for older kids and adults.
Hasbro has the master license for Jurassic World (and has held rights for many years for Star Wars).
For Jurassic World, Sperber says Hasbro has "created what I think is going to open or reopen a play pattern for boys: dinosaur play."
Although it doesn't fly into theaters until Dec. 18, the movie most predict will be the biggest licensing property of the year is Star Wars.
Star Wars toys, merchandise, games and more hit stores about Oct. 1. For any other property, the lack of having a movie in theaters until that late in the selling season would hurt sales, but that is not expected to be the case for the high-profile property Disney acquired from George Lucas' Lucasfilm in 2012 for $4 billion.
"We're talking Star Wars here," says Brochstein. "It's not like they have to build the profile off the product. Retailers are eager for it, and there is a lot of pent-up demand among consumers."
Disney's Pixar is also counting on strong showings for Inside Out, opening June 19, and The Good Dinosaur, opening Nov. 25.
Like the Minions toys, a lot of effort has gone into giving the Pixar characters self-expression that is intended to capture the humor, visual style and whimsical elements from the films.
Among other movies that will vie for the family audience and kid's attention are Sony's Pixels, starring Adam Sandler; Disney/Marvel's Ant-Man; a live action Peter Pan from Warner Bros.; Monster Trucks from Paramount; and Hotel Transylvania 2 from Sony.
Sperber says the reality is that there won't be room in the market for licensed products from all of those titles. "It's a game of feet and inches at retail," explains Sperber. "Are we going to get 2 feet, 4 feet, 6 feet [of prime shelf space in toy stores and from mass merchants like Walmart and Target]?
"There's a finite amount of space in the brick and mortar stores," adds Sperber. "It's literally about securing inches on a shelf. If we get our foot of space, somebody else's decreases because you can't just keep putting more and more shelves, because a store has a finite size. We're all fighting for the same shelf space."
CORRECTION: 2/6 5:32 P.M. Hasbro has held licensing rights for Star Wars for many years.