14 ms·

Why are toys such a bad business?

180 points by cjbest 6y ago

acdha 6y ago
There’s an interesting angle about which definition you use for constitutes a good business. There is robust demand for good quality toys (e.g. LEGO, Brio, Melissa & Doug) but it’s relatively stable because not everyone wants to buy in the higher price ranges, demand is finite, and making quality toys means you’re competing against yourself because many toys are passed down to siblings and resold or gifted locally. If you’re a parent that’s good, but if you’re trying to serve market expectations of constant growth you’re always under pressure to cut corners, and thus the long-term future of your brand, since the business can’t grow rapidly without a baby boom. LEGO clearly hit escape velocity but they seem more like an outlier.
pier25 6y ago
As a kid in the 80s I would get excited each Christmas by watching ads with new toys on the tv. Do kids still watch regular tv? My youngest nephews only watch YouTube and Netflix. They only want iPads and consoles for Christmas.
- EricE 6y ago
  As a kid in the 70's and even into the 80's it was the Sears Wishbook. Nothing beats the tactile experience of flipping through those pages of potential. I wish I would have kept some of those from back in the day - they would be amazing time capsules now.
sillysaurusx 6y ago
This locks toy companies into a challenging bet. Every year, they have to a) predict trends, b) invent them, and c) commit capital to them. All without knowing how the rest of the year will turn out. Since toy trends exist, but don’t last for very long, they have to invent new products every year—but the technological state of the art doesn’t advance very fast. It has all the volatility of tech, without the progress. Insightful post. This succinctly explains why most toys are movie-related. It's the easiest trend to predict. EDIT: This article keeps getting better and better. I had no idea Skyrim was almost set in Game of Thrones. https://www.tor.com/2011/09/16/how-skyrim-was-almost-set-in-westeros/ https://www.tor.com/2011/09/16/how-skyrim-was-almost-set-in-... It left me wanting more. The author is apparently Byrne Hobart, and they've written a variety of things: https://diff.substack.com/people/112633-byrne-hobart https://diff.substack.com/people/112633-byrne-hobart Looks like I'll be spending too much time reading them. They also write a post ... double checks ... every day?! For a week straight, sometimes? Wow. Sadly, most of their work appears to be locked behind a $20/mo paywall. It all looks very interesting though: https://diff.substack.com/p/dropbox-information-asymmetry-and https://diff.substack.com/p/dropbox-information-asymmetry-an...
- elcomet 6y ago
  The easiest, but maybe the shortest. Movie toys cannot be sold for more than a year. While others can last for decades (think legos or kapla)
  - imhoguy 6y ago
    They can much longer when you merge classic move genre (dc comics, marvel, star wars) with timeless toys and utensils (lego&compatible, flashlights, balls, backpacks, pencils, lunchboxes). Lightsabers will sell now and in 2030 too.
  - scarface74 6y ago
    How long were Star Wars toys popular in the 70s and 80s?
    - jhbadger 6y ago
      Basically from 1978 (when they were released; they missed Christmas 1977 which was their goal) until they were discontinued in 1985 (a couple of years after the end of the original trilogy). While each movie added new figures and playsets, a fair number of figures were unchanged during the seven year period.
      - pantaloony 6y ago
        Movie releases used to be a lot more stretched out. Theatrical release, maybe a year passes then it hits the premium movie channels, another year and they get to make a big deal about it being aired on a regular network. Then finally a few months later you’re seeing ads for the big VHS release. A blockbuster movie was like a 3-4 year marketing event.
    - paulie_a 6y ago
      Not every movie is star wars. There were hundreds of low quality movies made last year with toy tie ins. But most are forgotten
  - 6y ago
mensetmanusman 6y ago
Demographics is a big one. As the population pyramid changes to a rectangle, the latent toy:child ratio continues to increase. Every day I see piles of free toys around the neighborhood being given away for free. People with 1-2 kids are drowning in toys.
- x87678r 6y ago
  I pray people wont give toys as birthday presents now. Just another thing to find storage for.
- pantaloony 6y ago
  We have three and have to try to keep people from giving us more toys. It doesn’t work and we get rid of about 1-2 kids worth of toys per year. You could outfit a kid’s room with toys pretty respectably from scratch with $30-40 at the thrift store or garage sales, plus maybe about that much again at Target to fill in the gaps (bucket o’ LEGO and a base plate or two, or some dolls that still have their accessories, or whatever). Could stretch that second amount further with some good Ebaying, I bet. Drop another $30-40 every couple years (even for bikes—$10-30 at a garage sale) and you’re good until they start wanting electronics (and then you can just say “cool, get a job”)
  - mensetmanusman 6y ago
    Ha, if you spent $30 on cardboard, that would last some kids for years.
    - pintxo 6y ago
      Why spend? Just start ordering large and/or strangely shaped stuff online. With free shipping you can always order a single piece and your kids will grow up thinking that cardboard is in free unlimited supply /s
      - jacobkg 6y ago
        I ordered a bunch of expensive cardboard for my kid but of course they only wanted to play with the box it came in...
amelius 6y ago
I don't understand this. I'd prefer to give children the same things that I enjoyed as a child. (E.g. meccano, technic Lego). But the problem is that these companies "modernize" their offerings to such extent that I don't like them anymore. Also most of the good Lego sets are either cars or airplanes. This gets a little boring after giving these sets for a few years in a row. Lots of good sets become retired, which is a pity. I think I will be moving away from Lego for my next gifts because there is only very limited choice left in the $50 price range.
- moultano 6y ago
  When I was first looking into buying Lego sets for my kids I felt the same way, but I've completely turned around. Legos are way better than they were when I was a kid. Check out the 3-in-1 line. They're brilliantly designed. A few of my favorites: https://www.lego.com/en-us/product/deep-sea-creatures-31088 https://www.lego.com/en-us/product/deep-sea-creatures-31088 https://www.lego.com/en-us/product/mighty-dinosaurs-31058 https://www.lego.com/en-us/product/mighty-dinosaurs-31058 https://www.lego.com/en-us/product/underwater-robot-31090 https://www.lego.com/en-us/product/underwater-robot-31090 https://www.lego.com/en-us/product/riverside-houseboat-31093 https://www.lego.com/en-us/product/riverside-houseboat-31093 https://www.lego.com/en-us/product/outback-cabin-31098 https://www.lego.com/en-us/product/outback-cabin-31098 I also used to be bummed that Lego retired their standalone fantastical space ships line, in favor of making everything about starwars, but instead they've now based their space line on actually realistic spaceships, and it feels like a much better fit. When my son builds Lego rockets now, it makes him want to learn about all the NASA missions they're based on. He ends up learning about the parts of real rockets that are reflected in the Lego models. https://www.lego.com/en-us/product/deep-space-rocket-and-launch-control-60228 https://www.lego.com/en-us/product/deep-space-rocket-and-lau...
  - crazygringo 6y ago
    Wow. That it... so cool. I had no idea. I've heard the "Lego sets are worse now" meme for so long I just assumed it was true. But all those sets look utterly fantastic, and you're right -- even better than when I was a kid. I would have killed for all those. Thanks for the info. For whatever reason, that just put me in a great mood to start my day. :)
hamilyon2 6y ago
So, shorting every toy company would be a viable market strategy? Someone should run the numbers and find out.
- iamacyborg 6y ago
  Maybe don't try that with Games Workshop stock.
- smabie 6y ago
  No, probably not. If your thesis is: toy companies perform worse than the rest of the market. Then you would need to short toy companies and long the rest of the market. You would want to construct it to be market neutral: the same proportion of stock is held both long and short. Just shorting toy companies would not work. Or it might work over some short period of time, but it's not the sort of portfolio you would want to construct for the long haul.
ethbro 6y ago
Because most toy companies don't / can't understand vertical integration and increasing value capture. Or, in other words, they don't have their own version of this strategy chart: https://johnaugust.com/wp-content/uploads/2014/07/disney_chart.jpg https://johnaugust.com/wp-content/uploads/2014/07/disney_cha... (Disney corporate synergy, dated 1957) Your primary consumer has the attention span of a 10-year-old, and no disposable income. Why are we surprised this is a terrible industry? A smarter approach would be what Tim Sweeney is talking about with Fortnite (and Amazon infamously does): you have to do everything you can to pivot any initial success into a durable advantage, by aggressively expanding into adjacent opportunities, even if they're very different businesses (e.g. movie theaters). They've made token moves towards this with the physical toy + computer game mash-up genre, but from an external perspective I don't think any of them quite get how it's supposed to work. Efforts seem under -capitalized / -resourced / -inspired.
- watwut 6y ago
  The customer is adult parent, grandparent or aunt. They have disposable income and average kid has more toys then the kid needs.
  - ethbro 6y ago
    I'd disagree. The purchaser is an adult, but the customer is not. Who gets excited about a particular toy? That's the customer. (Note: I'm not talking about the edutainment market here)
    - pintxo 6y ago
      Don’t we split this into user (child) / customer (the one paying) usually?
    - aflag 6y ago
      Phrase it as you might. The adult is the one making the decisions. The children's excitement and desire is only one of the things the adult takes into consideration when buying a toy. That's a big deal for the parents, but much less so for the grandparents, uncles, aunts, etc. Obviously they want to make the kid happy, but they are distanced enough that they will probably not know what the kid actually considers the hot things. That's why when you were young you had many toys, but not always the ones you really wanted to have.
cosmodisk 6y ago
It also doesn't help that 80% of toys is cheap plastic tat. There's a lot of stuff but most of it is junk. For those who reach London at some point, I can't recommend enough V&A Museum of Childhood. It's a large museum with a substantial collection of toys,some as old as 300 years or so. It has it all: from PS1 to some wooden doll house an affluent Victorian family would have spent a small fortune on. The older toys are fabulous and nicely made. I think it's probably better to have a few quality ones than some 20 transform er cars that brake after 10 days of playing with them.
- Pxtl 6y ago
  Even from the '80s to now, things have changed. The early transformers involved very heavy plastic and some die-cast metal construction. Later ones were more elaborate and poseable but also involved much thinner material and no die-cast metal parts.
  - learc83 6y ago
    Yep I remember I had a Voltron toy that was die-cast metal. It was heavy and would have probably lasted for decades (it went to goodwill at some point).
- contrapunter 6y ago
  >It also doesn't help that 80% of toys is cheap plastic tat Yes. Amazing how many people are content to makes presents of such dross to their young friends and relations. Alternative approach: get the adult versions. e.g. don't buy the $20 binoculars endorsed as 'educational'; get $40 dollar binoculars which last much longer and are actually useful e.g. don't buy a plastic spade, give a gardening trowel instead etc.
  - crazygringo 6y ago
    Except that kids tend to destroy things (the binoculars obviously, not a trowel), tend to be violent with and throw things (a real gardening trowel is heavy and could injure their sibling for life), and quickly lose interest in things (they forget about the $20 binoculars long before their lack of quality is apparent). I mean it depends on the ages of your kids... but there are very good reasons most toys are cheap plastic. It didn't just happen accidentally. It's a feature, not a bug. (Except for landfills, of course.)
deleted 6y ago
[deleted]
snarfy 6y ago
Video games are doing pretty well.
- ShamelessC 6y ago
  As was mentioned in the article.
ilamont 6y ago
With Amazon Prime, the Christmas shopping season starts on December 22nd or so. Starts, or ends?
- netsharc 6y ago
  It does say "Prime", with same (or next)-day delivery. I can't imagine how many extra delivery drivers they need to hire to meet this demand from last minute shoppers. Amazon would be clever to incentivize with pre-Christmas discounts (I guess they probably do that, with "Black Friday" and "Cyber Week" offers...).
fny 6y ago
Toys are /not/ a bad business. If you're an investor looking for 10x returns on millions in capital, sure. If you're a maker/designer, it's a GREAT business for as long as you embrace the holiday sales cycle and can command a healthy margin. I designed a game with my brother a few years ago, and we've been growing steadily every year. https://llamadrama.com https://llamadrama.com This business only required a few thousand dollars to get started. If you're a maker, go make your toy/game! If you're an investor, go away. You'll probably ruin the business. It's so incredibly cheap to get an idea into the market place, we don't need you anymore.
- wtracy 6y ago
  I'm going to say that the business of selling card games is very different from the business of selling injection-molded plastic toys. A mold can cost thousands of dollars, and is useless once you have to make something different for next year's toy line.
tehjoker 6y ago
Don't forget that large manufacturers also manufacture trends as well as best as they can. That's the easiest way to sell. Someone I knew that worked in clothing design said that all the big manufacturers decide either by observation, discussion in industry journals, or collaboration that e.g. olive green (not the current example) is going to be the thing this year so customers are essentially forced to buy the newest "trend" due to lack of choice.
- tennineeight 6y ago
  Why is this any different than collusion? This sounds like multiple competitors deciding together to reduce market competition.
  - tehjoker 6y ago
    It's different strategies for collusion, but it's more illustrative to discuss how they're doing it. Talking about collusion in the abstract makes it sound like a conspiracy theory. Also, the difference between collusion and collaboration is whether you think parties having discussions is bad or good.
KaoruAoiShiho 6y ago
It's not though, see TSLA.
draklor40 6y ago
I would like to call BS on this entire "analysis" and presume that dropping fertility rates (and child births) across all of the developed world with enough discretionary money to spend on toys might be the single biggest reason why toy businesses are stagnating and perhaps reduce over the long run.
musicale 6y ago
> Video game prices have been declining in real terms, in part because of cheaper manufacturing and distribution and competition from "free to play" and mobile games
netsharc 6y ago
> TV ad campaigns, too, tend to be purchased in advance. About half of TV ad spending is allocated to the upfronts—booked March through May to be delivered by the end of the year. I wonder how that's been in this game-changing year...
- wtracy 6y ago
  That will be interesting to see. I could see kids being cooped up and bouncing off the walls generating additional demand that could offset some of the overall economic slowdown. There's also reduced competition from secondhand toys with parents avoiding garage sales. My prediction: board game companies will do ok. All-ages board games tend to be cheap, and they give the whole family something to do for a few hours.
coronadisaster 6y ago
They don't talk about cardboard boxes (most kid's favorite toy)? and they don't talk about the plastic waste from mainstream toys?

180 points by cjbest 6y ago

There’s an interesting angle about which definition you use for constitutes a good business. There is robust demand for good quality toys (e.g. LEGO, Brio, Melissa & Doug) but it’s relatively stable because not everyone wants to buy in the higher price ranges, demand is finite, and making quality toys means you’re competing against yourself because many toys are passed down to siblings and resold or gifted locally. If you’re a parent that’s good, but if you’re trying to serve market expectations of constant growth you’re always under pressure to cut corners, and thus the long-term future of your brand, since the business can’t grow rapidly without a baby boom. LEGO clearly hit escape velocity but they seem more like an outlier.

pier25 6y ago

As a kid in the 80s I would get excited each Christmas by watching ads with new toys on the tv. Do kids still watch regular tv? My youngest nephews only watch YouTube and Netflix. They only want iPads and consoles for Christmas.

EricE 6y ago
As a kid in the 70's and even into the 80's it was the Sears Wishbook. Nothing beats the tactile experience of flipping through those pages of potential. I wish I would have kept some of those from back in the day - they would be amazing time capsules now.

sillysaurusx 6y ago

This locks toy companies into a challenging bet. Every year, they have to a) predict trends, b) invent them, and c) commit capital to them. All without knowing how the rest of the year will turn out. Since toy trends exist, but don’t last for very long, they have to invent new products every year—but the technological state of the art doesn’t advance very fast. It has all the volatility of tech, without the progress. Insightful post. This succinctly explains why most toys are movie-related. It's the easiest trend to predict. EDIT: This article keeps getting better and better. I had no idea Skyrim was almost set in Game of Thrones. https://www.tor.com/2011/09/16/how-skyrim-was-almost-set-in-westeros/ https://www.tor.com/2011/09/16/how-skyrim-was-almost-set-in-... It left me wanting more. The author is apparently Byrne Hobart, and they've written a variety of things: https://diff.substack.com/people/112633-byrne-hobart https://diff.substack.com/people/112633-byrne-hobart Looks like I'll be spending too much time reading them. They also write a post ... double checks ... every day?! For a week straight, sometimes? Wow. Sadly, most of their work appears to be locked behind a $20/mo paywall. It all looks very interesting though: https://diff.substack.com/p/dropbox-information-asymmetry-and https://diff.substack.com/p/dropbox-information-asymmetry-an...

elcomet 6y ago
The easiest, but maybe the shortest. Movie toys cannot be sold for more than a year. While others can last for decades (think legos or kapla)
- imhoguy 6y ago
  They can much longer when you merge classic move genre (dc comics, marvel, star wars) with timeless toys and utensils (lego&compatible, flashlights, balls, backpacks, pencils, lunchboxes). Lightsabers will sell now and in 2030 too.
- scarface74 6y ago
  How long were Star Wars toys popular in the 70s and 80s?
  - jhbadger 6y ago
    Basically from 1978 (when they were released; they missed Christmas 1977 which was their goal) until they were discontinued in 1985 (a couple of years after the end of the original trilogy). While each movie added new figures and playsets, a fair number of figures were unchanged during the seven year period.
    - pantaloony 6y ago
      Movie releases used to be a lot more stretched out. Theatrical release, maybe a year passes then it hits the premium movie channels, another year and they get to make a big deal about it being aired on a regular network. Then finally a few months later you’re seeing ads for the big VHS release. A blockbuster movie was like a 3-4 year marketing event.
  - paulie_a 6y ago
    Not every movie is star wars. There were hundreds of low quality movies made last year with toy tie ins. But most are forgotten
- 6y ago

mensetmanusman 6y ago

Demographics is a big one. As the population pyramid changes to a rectangle, the latent toy:child ratio continues to increase. Every day I see piles of free toys around the neighborhood being given away for free. People with 1-2 kids are drowning in toys.

x87678r 6y ago
I pray people wont give toys as birthday presents now. Just another thing to find storage for.
pantaloony 6y ago
We have three and have to try to keep people from giving us more toys. It doesn’t work and we get rid of about 1-2 kids worth of toys per year. You could outfit a kid’s room with toys pretty respectably from scratch with $30-40 at the thrift store or garage sales, plus maybe about that much again at Target to fill in the gaps (bucket o’ LEGO and a base plate or two, or some dolls that still have their accessories, or whatever). Could stretch that second amount further with some good Ebaying, I bet. Drop another $30-40 every couple years (even for bikes—$10-30 at a garage sale) and you’re good until they start wanting electronics (and then you can just say “cool, get a job”)
- mensetmanusman 6y ago
  Ha, if you spent $30 on cardboard, that would last some kids for years.
  - pintxo 6y ago
    Why spend? Just start ordering large and/or strangely shaped stuff online. With free shipping you can always order a single piece and your kids will grow up thinking that cardboard is in free unlimited supply /s
    - jacobkg 6y ago
      I ordered a bunch of expensive cardboard for my kid but of course they only wanted to play with the box it came in...

amelius 6y ago

I don't understand this. I'd prefer to give children the same things that I enjoyed as a child. (E.g. meccano, technic Lego). But the problem is that these companies "modernize" their offerings to such extent that I don't like them anymore. Also most of the good Lego sets are either cars or airplanes. This gets a little boring after giving these sets for a few years in a row. Lots of good sets become retired, which is a pity. I think I will be moving away from Lego for my next gifts because there is only very limited choice left in the $50 price range.

moultano 6y ago
When I was first looking into buying Lego sets for my kids I felt the same way, but I've completely turned around. Legos are way better than they were when I was a kid. Check out the 3-in-1 line. They're brilliantly designed. A few of my favorites: https://www.lego.com/en-us/product/deep-sea-creatures-31088 https://www.lego.com/en-us/product/deep-sea-creatures-31088 https://www.lego.com/en-us/product/mighty-dinosaurs-31058 https://www.lego.com/en-us/product/mighty-dinosaurs-31058 https://www.lego.com/en-us/product/underwater-robot-31090 https://www.lego.com/en-us/product/underwater-robot-31090 https://www.lego.com/en-us/product/riverside-houseboat-31093 https://www.lego.com/en-us/product/riverside-houseboat-31093 https://www.lego.com/en-us/product/outback-cabin-31098 https://www.lego.com/en-us/product/outback-cabin-31098 I also used to be bummed that Lego retired their standalone fantastical space ships line, in favor of making everything about starwars, but instead they've now based their space line on actually realistic spaceships, and it feels like a much better fit. When my son builds Lego rockets now, it makes him want to learn about all the NASA missions they're based on. He ends up learning about the parts of real rockets that are reflected in the Lego models. https://www.lego.com/en-us/product/deep-space-rocket-and-launch-control-60228 https://www.lego.com/en-us/product/deep-space-rocket-and-lau...
- crazygringo 6y ago
  Wow. That it... so cool. I had no idea. I've heard the "Lego sets are worse now" meme for so long I just assumed it was true. But all those sets look utterly fantastic, and you're right -- even better than when I was a kid. I would have killed for all those. Thanks for the info. For whatever reason, that just put me in a great mood to start my day. :)

hamilyon2 6y ago

So, shorting every toy company would be a viable market strategy? Someone should run the numbers and find out.

iamacyborg 6y ago
Maybe don't try that with Games Workshop stock.
smabie 6y ago
No, probably not. If your thesis is: toy companies perform worse than the rest of the market. Then you would need to short toy companies and long the rest of the market. You would want to construct it to be market neutral: the same proportion of stock is held both long and short. Just shorting toy companies would not work. Or it might work over some short period of time, but it's not the sort of portfolio you would want to construct for the long haul.

ethbro 6y ago

Because most toy companies don't / can't understand vertical integration and increasing value capture. Or, in other words, they don't have their own version of this strategy chart: https://johnaugust.com/wp-content/uploads/2014/07/disney_chart.jpg https://johnaugust.com/wp-content/uploads/2014/07/disney_cha... (Disney corporate synergy, dated 1957) Your primary consumer has the attention span of a 10-year-old, and no disposable income. Why are we surprised this is a terrible industry? A smarter approach would be what Tim Sweeney is talking about with Fortnite (and Amazon infamously does): you have to do everything you can to pivot any initial success into a durable advantage, by aggressively expanding into adjacent opportunities, even if they're very different businesses (e.g. movie theaters). They've made token moves towards this with the physical toy + computer game mash-up genre, but from an external perspective I don't think any of them quite get how it's supposed to work. Efforts seem under -capitalized / -resourced / -inspired.

watwut 6y ago
The customer is adult parent, grandparent or aunt. They have disposable income and average kid has more toys then the kid needs.
- ethbro 6y ago
  I'd disagree. The purchaser is an adult, but the customer is not. Who gets excited about a particular toy? That's the customer. (Note: I'm not talking about the edutainment market here)
  - pintxo 6y ago
    Don’t we split this into user (child) / customer (the one paying) usually?
  - aflag 6y ago
    Phrase it as you might. The adult is the one making the decisions. The children's excitement and desire is only one of the things the adult takes into consideration when buying a toy. That's a big deal for the parents, but much less so for the grandparents, uncles, aunts, etc. Obviously they want to make the kid happy, but they are distanced enough that they will probably not know what the kid actually considers the hot things. That's why when you were young you had many toys, but not always the ones you really wanted to have.

cosmodisk 6y ago

It also doesn't help that 80% of toys is cheap plastic tat. There's a lot of stuff but most of it is junk. For those who reach London at some point, I can't recommend enough V&A Museum of Childhood. It's a large museum with a substantial collection of toys,some as old as 300 years or so. It has it all: from PS1 to some wooden doll house an affluent Victorian family would have spent a small fortune on. The older toys are fabulous and nicely made. I think it's probably better to have a few quality ones than some 20 transform er cars that brake after 10 days of playing with them.

Pxtl 6y ago
Even from the '80s to now, things have changed. The early transformers involved very heavy plastic and some die-cast metal construction. Later ones were more elaborate and poseable but also involved much thinner material and no die-cast metal parts.
- learc83 6y ago
  Yep I remember I had a Voltron toy that was die-cast metal. It was heavy and would have probably lasted for decades (it went to goodwill at some point).
contrapunter 6y ago
>It also doesn't help that 80% of toys is cheap plastic tat Yes. Amazing how many people are content to makes presents of such dross to their young friends and relations. Alternative approach: get the adult versions. e.g. don't buy the $20 binoculars endorsed as 'educational'; get $40 dollar binoculars which last much longer and are actually useful e.g. don't buy a plastic spade, give a gardening trowel instead etc.
- crazygringo 6y ago
  Except that kids tend to destroy things (the binoculars obviously, not a trowel), tend to be violent with and throw things (a real gardening trowel is heavy and could injure their sibling for life), and quickly lose interest in things (they forget about the $20 binoculars long before their lack of quality is apparent). I mean it depends on the ages of your kids... but there are very good reasons most toys are cheap plastic. It didn't just happen accidentally. It's a feature, not a bug. (Except for landfills, of course.)

deleted 6y ago

[deleted]

snarfy 6y ago

Video games are doing pretty well.

ShamelessC 6y ago
As was mentioned in the article.

ilamont 6y ago

With Amazon Prime, the Christmas shopping season starts on December 22nd or so. Starts, or ends?

netsharc 6y ago
It does say "Prime", with same (or next)-day delivery. I can't imagine how many extra delivery drivers they need to hire to meet this demand from last minute shoppers. Amazon would be clever to incentivize with pre-Christmas discounts (I guess they probably do that, with "Black Friday" and "Cyber Week" offers...).

fny 6y ago

Toys are /not/ a bad business. If you're an investor looking for 10x returns on millions in capital, sure. If you're a maker/designer, it's a GREAT business for as long as you embrace the holiday sales cycle and can command a healthy margin. I designed a game with my brother a few years ago, and we've been growing steadily every year. https://llamadrama.com https://llamadrama.com This business only required a few thousand dollars to get started. If you're a maker, go make your toy/game! If you're an investor, go away. You'll probably ruin the business. It's so incredibly cheap to get an idea into the market place, we don't need you anymore.

wtracy 6y ago
I'm going to say that the business of selling card games is very different from the business of selling injection-molded plastic toys. A mold can cost thousands of dollars, and is useless once you have to make something different for next year's toy line.

tehjoker 6y ago

Don't forget that large manufacturers also manufacture trends as well as best as they can. That's the easiest way to sell. Someone I knew that worked in clothing design said that all the big manufacturers decide either by observation, discussion in industry journals, or collaboration that e.g. olive green (not the current example) is going to be the thing this year so customers are essentially forced to buy the newest "trend" due to lack of choice.

tennineeight 6y ago
Why is this any different than collusion? This sounds like multiple competitors deciding together to reduce market competition.
- tehjoker 6y ago
  It's different strategies for collusion, but it's more illustrative to discuss how they're doing it. Talking about collusion in the abstract makes it sound like a conspiracy theory. Also, the difference between collusion and collaboration is whether you think parties having discussions is bad or good.

KaoruAoiShiho 6y ago

It's not though, see TSLA.

draklor40 6y ago

I would like to call BS on this entire "analysis" and presume that dropping fertility rates (and child births) across all of the developed world with enough discretionary money to spend on toys might be the single biggest reason why toy businesses are stagnating and perhaps reduce over the long run.

musicale 6y ago

> Video game prices have been declining in real terms, in part because of cheaper manufacturing and distribution and competition from "free to play" and mobile games

netsharc 6y ago

> TV ad campaigns, too, tend to be purchased in advance. About half of TV ad spending is allocated to the upfronts—booked March through May to be delivered by the end of the year. I wonder how that's been in this game-changing year...

wtracy 6y ago
That will be interesting to see. I could see kids being cooped up and bouncing off the walls generating additional demand that could offset some of the overall economic slowdown. There's also reduced competition from secondhand toys with parents avoiding garage sales. My prediction: board game companies will do ok. All-ages board games tend to be cheap, and they give the whole family something to do for a few hours.

coronadisaster 6y ago

They don't talk about cardboard boxes (most kid's favorite toy)? and they don't talk about the plastic waste from mainstream toys?