I personally think that this is an extremely unfair comparison. Just from a business model standpoint, Hasbro and these other companies are completely different animals.
First, licensing. Star Wars is a license that is paid from Hasbro to Lucasfilm Ltd. So right off the bat, Hasbro is operating at a loss. The SW license cost them plenty, including a 10% stake in the company that George Lucas now owns.
Differences in companies doesn't necessarily make an unfair playing field though Nick. That's a tad shortsighted. So we're to assume that Hasbro's licensing fee means they're in a weaker financial situation right off the bat when compared to a company like 21st Century Toys, BBI, or Dragon?
Come on now... We're talking about a public corporation, muliti-national, and with a capital reserve that makes the small private companies like Dragon, BBI, and 21st look like a mom & pop general store up against Wall-Mart.
Licensing is not the big crutch everyone claims it to be...
Tack onto that the fact other companies DO pay licensing fees too (Though smaller), and it's hard to say Hasbro's licensing issues are a solid excuse as to any shortcomings within the Star Wars brand.
I will agree with you that we're comparing 2 very different company styles, but I can't help but laugh when anyone gives the "unfair advantage" to the smaller private companies who struggle financially. Hasbro has a distinct advantage as a large corporation that helps negate licensing as a real issue (If we're doing comparisons here).
I never said that other companies weren't paying licensing fees. But, when the Star Wars license ticks in at half a billions dollars and 10% ownership in your company, that's a hefty cost. The other licensing fees that the companies you're talking about pale in comparison.
LFL's personal approval process can be compared to anything within any other company as well. For 21st Century, their process relies on the strictest historical accuracy in deco or details... For Dragon, their approval process is reported to take up to 20 different tries at a single figure before the heads of Dragon say "OK, now it's ready for production".
LFL's maybe strict, but let's face it... Some of what we've seen isn't exactly amazing in accuracy sometimes so how strict can their approval process really be? They stamp it as "OK, you didn't cross our guidelines" likely and they Hasbro starts cranking it out. Star Wars, by its very nature, is going to have more leeway in that regard. It's fiction, and as such some things can be compromised. The companies working on military product tend not to have that luxury.
You're leaving out a lot of other steps. First Hasbro has to approve something at the departmental level. Next, they no doubt have a corporate safety standards department that it has to go through. These are after all approved for children what, ages 5 and up? THEN, it proceeds to LFL. Lucasfilm has been renowned for being sticklers for what will and will not go out. This delays the process, and in the long run costs more money.
The fact is, the small companies like BBi, Dragon, 21st Century, etc don't have anywhere near the cost factor. Let's face facts: it's far cheaper for these companies to do business than it is for Hasbro. As a result, they can offer a somewhat superiro product at about the same price points.
No, there's no "fact" to that at all.
Once again, you negate the fact that these are dramatically smaller companies with much higher production costs than Hasbro due to capital restraints. You don't recognize their own licensing fees, and the fact that they're working under the same pressures and overhead that Hasbro is, and doing it from a much smaller company's standpoint.
To say they're able to put out product cheaper than Hasbro is simply misinformation... Some of these companies, even with very high sales, are struggling because their profit must be turned right back into the company for its own growth. 21st Century continuously makes profit but has financial issues because their overhead bogs the company down, even with good sales.
So they're somehow still able to make things cheaper than Hasbro does? That doesn't really make any sense unless you're looking at it black & white in that Star Wars is just a huge license and 21st's brands aren't. Not a fair analysis by any stretch, but then you'd be correct I guess.
The fact is that the bottom line is the core fact. Are the smaller companies having a harder time getting by? Yes. They have a smaller market share. They're fundamentally smaller companies. They have higher production costs because they can't manufacture in the quantity level that Hasbro does at a comparable expense level. But, the core issue once again is the licensing. Are any of these other companies able or willing to shell out the kind of capital needed to produce a viable line? Are they able to stick it out to see an eventual profit? Probably not.
Regarding GI Joe: GI Joe is able to make more money than Star Wars because Hasbro owns all the rights to GI Joe. As a result, they don't have to pay any licensing fees, and has free reign over this property. A very different business model.
Actually it's the same business model since it's Hasbro producing a toy line (Even same markets, trying to balance between older and younger/newer collectors). It has a distinct overhead I'm sure, with a lot of similarities too, but you're right there's no cost for licensing...
Of course, does licensing suddenly become the key overhead cost t hough? No, so I don't think one rather small overhead variance is what makes G.I. Joe more profitable than Star Wars.
GI Joe is an intellectual property that is wholly owned by Hasbro. As a result, Hasbro does not have to factor in licensing payments in their costs. Hasbro owns all the rights to GI Joe. They're therefore able to spend more money on R&D, manufacturing, marketing and other costs because there isn't the looming spector of licensing. And if they play smart businessmen in GI Joe and keep their costs down, they can get a much higher profit margin out of the GI Joe line because they have a dramatically lower overhead.
And I have to restate, I and just about any other business person would agree that half a billions dollars is not a small overhead variance.
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It does bear out Jesse's point that the license in effect is mostly paid for, and the cost of it has been reduced going forward into the future.