Reveals and toy deals tend to dominate the reporting around Toy Fair each year, but that only conveys a small fraction of the fun. The most exciting, compelling, and engaging side of Toy Fair is that which too often doesn’t make the news. Yes, of course I’m talking about: financial reports!
Okay, no, don’t click back to the cute kitten video just yet; I promise this is interesting. Attendees at Toy Fair receive copies of trade publications which contain in-depth analyses of the toy industry written by experts. These articles allow anyone connected to toys the ability to access the trends of the previous year and predict the coming year’s ups and downs. We also network with our favorite small and indie toy brands to see how the market is treating the little shops. Here are my most significant takeaways:
1. According to Maddie Michalik, managing editor of The Toy Book, “The U.S. toy industry is estimated to be worth about $28 billion. This is a 2 percent decline from the year before…” Michalik indicates that the 2% loss is actually not bad, considering 2018 contained the loss of Toys “R” Us in the U.S., which some initially thought would totally tank the toy industry. It turns out it did no such thing.
2. The NPD Group’s Juli Lennett adds that 2018 toy sales were actually healthier than 2016’s. This furthers the notion that the toy industry is harder to sink than some might believe. The toy sector’s strength in 2018 came from other retailers who invested more in toys in order to fill the gap left by Toys “R” Us.
3. When broken down by sector, dolls and action figures saw the most profit growth in 2018, gaining 7% and 10% respectively. Often I am confronted by people who say, “Kids don’t play with toys anymore; they’re just on their iPads all the time!” I’m not going to downplay the role of kids in the video game/app markets, but these sales show that, when kids have enough toyetic media (movies and TV shows that contain enough of a world to support an attractive toy line), they will reach for physical figures. This may foretell an action figure- and doll-friendly 2019, as this year will see the release of some very toyetic properties like Frozen 2 and Star Wars: Episode IX, along with many others in the superhero and fantasy realms.
4. We can no longer ignore YouTube. Kids aren’t ignoring it, but analysts forget its relevance to the toy world. As James Zahn, senior editor for The Toy Book, explains: this past year was the first time the Children’s Television Act of 1990 was discussed with any degree of seriousness since 1996. This act regulates the amount of educational content that must be in kids’ programming. The current administration tends to roll back these requirements, but the Act, in its original form, could have never predicted YouTube, which houses some of the most popular kids content. Whether rolled back or ramped up, the Children’s Television Act will need a revision as it must address the massive amount of children’s programming available online. MGA Entertainment CEO Isaac Larian, whose L.O.L. Surprise! toys have been a steady hit, praised streaming platforms like YouTube for influencing the rapid spread of his company’s products. Ryan’s World, a popular YouTube show, has also spawned top-selling toys mostly found at Target. We cannot afford to minimize the strong bond between streaming media and toys any longer.
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5. 2019’s toyscape contains many variables. Now that we’re post-Toys “R” Us, we need to know more about how retailers will shift to compensate for the loss. FAO Schwarz is expanding. Toys “R” Us executives have formed Tru Kids, which tried out pop-up aisles in Kroger stores last holiday season, but found lackluster results. The British (via Hamleys) are invading New York City. Not to mention the fact that consumers are demanding that toy companies reevaluate their representations of gender, race, and social awareness in the products they create. And what’s up with this “retro” kick we’re all on? How toy companies and retailers answer these challenges will be fascinating to watch, and will directly impact how you buy toys and what those toys look like.
6. There is still room for indie toy companies. I touched base with friend and CEO Julie Kerwin, who runs IAmElemental, the indie feminist superhero action figure line. Julie started her company as a Kickstarter hit, which then exploded into a massively successful first and second waves of figures. Now, she’s going back to the beginning and exploring a possible origin story for the original heroes she created. Boss Fight Studio and FCTRY have seen exponential growth, and both also began on Kickstarter by fans who saw a void in the toy world and filled it with their products. Stories like these were far fewer just 20 years ago, and there’s no telling how common they’ll be in another 20.
Photos of incoming toys only give a portion of the story. They tell you what’s coming, but they don’t really say why. To really understand the toy world, you’ve got to crunch a few numbers, sit through a couple of boring panels, and have awkward conversations with your business friends – or you could just let me do that for you! I hope I’ve been able to offer a glimpse into the clockwork that makes the toy industry run.