Poor Sales May Deal Toy Robots Fatal Blow
Sunday, December 16th, 1990 12:01AM CSTCategory: Site Articles
Posted by: Seibertron Views: 494,215
Written by Karen Schwartz for the Associated Press
Pawtucket, R.I. -- After years of battling for control of the universe, Transformers, those toy robots that can change form, may have met their demise from sagging sales.
Hasbro Inc., which made nearly $950 million selling Transformers over the past seven years, is re-evaluating whether domestic demand is strong enough to justify costly promotion, company spokesman Wayne Charness said last week.
"Certainly Transformers had a fantastic run, and we are going to review whether the run continues or whether it goes away," he said.
Hasbro kept the heroic Autobots and the evil Decepticons going for years by inventing and supplying weapons for both sides of the Transformers battle. It also developed a complicated story line of a futuristic mechanical being that crash-landed on Earth in search of fuel and power supplies.
In its heyday in 1985, Transformers generated about $333 million for Hasbro, accounting for 27 percent of the company's annual net revenue. This year, the product is expected to garner only about 2.4 percent, or $35 million.
Hasbro worldwide net sales should total about $1.46 billion this year, up from about $1.41 billion last year, said Gary Jacobson, toy industry analyst for Kidder, Peabody & Co. of New York.
Charness said such staples as GI Joe and Cabbage Patch Kids dolls continue to be top sellers, along with new items such as New Kids on the Block dolls and World Wrestling Federation figures.
Transformers continue to sell well in other countries, where the toys were introduced more recently, Charness said. A decision on the future of Transformers in this country should be made shortly, he said.
"With any product you'd love to have it last forever and ever," he said. "Our job (is)... to give it as long a life as it can."
If Hasbro decides to discontinue U.S. sales of Transformers, it will end one of the toy industry's biggest success stories in years.
"It had a terrific run," said Paul Valentine, a toy industry analyst at Standard & Poor's Corp. of New York. "It was one of the major hits of the 1980s."
Another industry analyst, Sean McGowan of Gerard Klauer Mattison & Co. of New York, said: "The question of Transformers is not 'Why did it die?' but 'Why did it live so long?'"
The answer lies, at least in part, in Hasbro's marketing strategy. The Pawtucket-based company constantly updated the line with new figures and vehicles. It offered various models to appeal to different pocketbooks. And there was a Transformers television cartoon show and a movie.
Over the years, Hasbro became less agressive about marketing the figures.
"We certainly continued to support Transformers but not at the level we did when it was the most popular toy in the country," Charness said.
The line of toy robots arrived in 1983 when it was unveiled at the annual toy fair in New York by the Japanese toy company Takara.
Hasbro worked out a licensing arrangement with Takara. Meanwhile, Tonka Corp. of Minnetonka, Minn., introduced a competing line, GoBots, in early 1984.
"Although Transformers appeared five months after GoBots, Hasbro came from behind and outsold GoBots almost 2-1," according to the book "Toyland: The High Stakes Game of the Toy Industry."
Transformers generated about $111.6 million in sales that year.
"I think it really brought a fun new play to toys," said Charness. "The whole transformation theme -- it was an exciting one for kids, and I think done well it continues to be."
Editor's Note: This newspaper article was obtained through Linden High School's micro-fiche film library during my senior year in 1995. Linden High School is located in Linden, Mi. See ... it pays to save all that stuff!!!