Current strategies for building top toy brands

The 110^th American International TOY FAIR in New York City has spawned a serious question about brand-building in the toy business and the relative value of those brands. The Wall Street Journal reports the short answer is kids reward companies that introduce “original lines based on new characters.”

Over 30,000 visitors will rotate turnstiles at the conference this year, and many of them will want to learn what propelled Activision’s Skylanders ($500M in domestic sales) and Mattel’s Monster High ($1B in domestic sales) to such enviable popularity. Here’s what they will learn:

1. Contrary to what used to be conventional wisdom, the characters to not have to make a connection with the adults who pay for them;
2. Activision and Mattel developed new brands, based on new characters (characters not in existence three years ago) instead of revisiting “retro” brands (see Teenage Mutant Ninja Turtles, Cabbage Patch Dolls, etc.
3. The characters do not have to be tied to a major film franchise, a strategy employed by Hasbro in recent years, but popular TV shows are good launching pads;
4. The characters should be accessible through multi-media. For instance, Skylanders is a videogame in which users place a real toy on a pedestal, creating the character onscreen.

This year’s companies to watch?  Disney, which is launching “Sofia the First,” a new character, based on a TV show, and Legos, hoping to match recent years’ surge in popularity with a new character (“Legends of China”) paired with a new TV show.

For many years The Licensing Letter has been covering the TOY FAIR, reporting on trends and properties and providing valuable contacts to the industry.