Author Topic: Sales Expectations in a movie year - Wall Street Journal  (Read 1788 times)

Offline Xander

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I want to type in an article from the March 14th Wall Street Journal, yet it looks like I'll have to finish it later. This article compares product for Batman, Fantastic Four, and Start Wars.  Here's a little part:

"In contrast, hasbro's planned line of "Star Wars" toys is "tighter" than in years past, says Brian Goldner, president of Hasbro's U.S. toys group. Over the past three decades, consumer retail sale of "Star Wars" - related toys, video games, clothes, shoes and other goods have topped $9 billion, making "Star Wars" one of the most successful movie related merchandise franchises ever, says Howard Roffman, president of Lucasfilm Ltd.'s licensing arm.

Lucasfilm executives expect retail sales of $1.5 billion or more for all kinds of merchandise from the coming movie, compared with $2 billion for "Episode I - The Phantom Menace," released in 1999, and $1.2 billion in retail sales three years later for "Episode II - Attack of the Clones." Believing they may have lost potential sales as a result of too little "Attack of the Clones" merchandise, they plan to ship more goods this time around, says Mr. Roffman.

The new "Star Wars" line is segmented for specific consumer groups, including collectors, young children, and tweens and teens. Action figures for the youngest fans feature bigger hands and feet, which make them easier to handle and play with. But many of the new products are aimed at so-called tweens, defined as kids from about eight to 12 years old, and even at young teens - age groups that seem to have left action-figure play far behind."

More of this later.

Interesting about the expectations.
« Last Edit: April 10, 2005, 09:09 AM by Xander »

Offline JediMAC

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Re: Sales Expectations
« Reply #1 on: April 8, 2005, 06:17 PM »
I guess those numbers probably seem about right, as far as expecting this movie's merchandise to fall somewhere in between the prior two.  I'm always interested in reading about who Hasbro's "targeted" audience is with their various toys/collectibles.  It drives me inveritably insane when I hear them continuous preaching that the 4" figure line is for little kids, when anyone who's followed the line for the past 10 years knows damned well that at least 80% or more of the sales have been to adult (16+) collectors.  That's always been our beef with the action feature crap.  They added it into the Saga line everywhere, but I never saw a kid buy a one of 'em.  Now they're doing the exact same thing all over again, though thus far, they appear to be better disguised in most cases for the ROTS line.

But I think Hasbro knows all of this deep down, which is why they're putting out lines like the Attacktix and Battle Force lines, with the exaggerated features on both.  That makes more sense for the youngin's I think, as long as Hasbro finally fesses up that they know kids aren't buying into the 4" line much at all.  But if a panel full of Hasbro reps want to sit in front of me at Comic Con once again this year, and personally tell me and a large room full of adult collectors that it's the kids who are supporting a majority of this line, so that's who they gear their product to, then I may just...  Well, I dunno what I'll do, but I'm sure it'll be on the more "excited" side of things.

Offline DoctorPadawan

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Re: Sales Expectations
« Reply #2 on: April 8, 2005, 06:23 PM »
Quote
Lucasfilm executives expect retail sales of $1.5 billion or more for all kinds of merchandise from the coming movie, compared with $2 billion for "Episode I - The Phantom Menace," released in 1999, and $1.2 billion in retail sales three years later for "Episode II - Attack of the Clones." Believing they may have lost potential sales as a result of too little "Attack of the Clones" merchandise, they plan to ship more goods this time around, says Mr. Roffman.

So, the reason that they didn't sell as much AOTC stuff had nothing to do with the fact that half of the action figures were total crap, the fact that the vehicles couldn't hold the figures they were originally designed to interact with, and that, for all intents and purposes (I am not one of these people, by the way), not a lot of people liked the movie?

And, in order to "correct" this (relatively) low level of sales, they decided to MAKE MORE CRAP?  :o

Excuse my language, but this calls for....

WHAT

THE

****?!


I'm sorry, but Hasbro and LFL are higher than I suspect if they think that:

1-AOTC merchandise didn't make as much money because there wasn't enough of it

and

2-The way to remedy this is to make even more stuff, still ignore an overall level of quality, and hope to profit

I'm telling you, at the beginning of fiscal year 2006, we can expect to see the, "Star Wars did not perform according to expectations" excuse they hauled out in 2000 and 2003.  ::)

Offline Darth Broem

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Re: Sales Expectations
« Reply #3 on: April 8, 2005, 08:06 PM »
LOL!  That one line is classic.  "It did not sell as well because we did not put enough of the product out there." Yeah, not enough good product maybe. 

Offline Xander

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Re: Sales Expectations
« Reply #4 on: April 9, 2005, 10:27 AM »
Ah, I found an edited version online, so added the stuff they left out.

So, those Hulk hands were big sellers after all?

=========================================================

Movie-related toys no longer sure seller

By Stephanie Kang

Wall Street Journal

Darth Vader, Batman and the Fantastic Four are headed to theaters this summer for an action-movie showdown. How the action plays out in the toy aisle will reveal a lot about how much mileage is left in the once-booming movie-merchandise industry.

Traditional toys based on Hollywood movies have been a hit-or-miss business in recent years, in part because the prime customers – boys – are outgrowing action figures and miniature vehicles at younger ages than ever before.

NPD Funworld says licensed toy sales, including toys based on movies, inched up just 1.8 percent in 2004 to $5.7 billion. Toy makers hope their next round of licensed products – including “role-play” toys like “Star Wars” light sabers and toys incorporating videogame-style technology – will bring on faster growth.

The coming brawl features the movie and toy worlds’ marquee names. Toy giant Hasbro Inc. is working with Lucasfilm Ltd. on toys based on “Star Wars: Episode III – Revenge of the Sith.” Time Warner Inc.’s Warner Bros. has teamed up with Mattel Inc. for toys based on “Batman Begins.” “Fantastic Four” is being merchandised by Toy Biz Worldwide Ltd., a unit of Marvel Enterprises Inc., the company that created the original comic-book series in 1961 and, along with News Corp.’s Twentieth Century Fox, is one of the companies producing the movie.

The slugfest begins next month, when the first toys start arriving in stores, among them a remote-control Batmobile and oversize feet and hands made of foam, inspired by those belonging to a character in “Fantastic Four.” Some of the toys are made to be used with a TV set. And then there’s “Darth Tater,” Mr. Potato Head’s evil alter ego (light saber included).

“Fantastic Four” might be the most kid-friendly of the bunch: The plot concerns four friends who gain superpowers after their space shuttle gets doused with radiation. The two other films, in comparison, are expected to explore darker themes: “Star Wars: Episode III,” for example, details the transformation of Anakin Skywalker into Darth Vader, a good-goes-bad theme that might put off some parents and confuse some kids. On the other hand, it could delight young kids who clamor for stuff that was once reserved for their older siblings. “Batman Begins” chronicles the violent events that impelled Bruce Wayne to turn into Batman.

In the past, big-budget film licensees have produced everything from bedsheets to board games based on movie characters and storylines. The company with a film’s “master toy license” usually gets the rights to make action figures, role-play toys, “plush” toys and board games. Analysts say a strong licensed-toy line can contribute up to one-third of a film’s merchandise sales, generating hundreds of millions of dollars at retail. Some think the rush of high-profile films opening this summer will help revive the movie-based toy business.

But even with their movie credentials, these licensed toys are vulnerable to the same challenges affecting the traditional toy business. Increasing competition for kids’ attention from MP3 players, video games and other electronics and media means that many kids put away traditional toys at ages as young as eight or nine.

The action-figure category in particular has taken it in the chops. Though sales of action figures make up about 5 percent of the toy industry’s $20.1 billion in annual sales, they have fallen 14 percent over the past two years to $1.2 billion, according to market research firm NPD Funworld. Sales of toy cars and trucks dropped10 percent to $1.8 billion in 2004 from $2 billion in 2003.

A few recent films, such as “Spider-Man,” have given rise to strong toy sales. But others, such as “Godzilla” in 1998, have been toy-aisle catastrophes. Earlier this week, Marvel said sales at its toy division dropped 41% to $21.8 million, mostly from decreased sales of action figures and accessories based on the movies "Lord of the Rings" and "The Hulk."

Action-figure sales will continue to slide, predicts industry analyst Jim Silver, because boys play differently than they did even five years ago. Although action figures have long been the way kids have played out movie scenarios, now costume and prop type toys infused with voice and light technology allow kids themselves to "become the hero," Mr Silver says.

These role-play toys are some of the few strong sellers among licensed toys in recent years. Among them are Marvel’s “triple action web blaster,” which kids wear to squirt water and “web fluid” and pretend they are Spider-Man, and the green foam “Hulk Hands,” the big green boxing gloves that were the best-selling toy to come out of the 2003 film directed by Ang Lee.

Toy makers working on film projects now look closely at their intended customers when planning the merchandise, industry observers say. For instance, the Batman franchise has a strong fan base of young children, many of whom first encountered the Batman franchise in the Warner Bros. animated TV series. Mattel's action figure and vehicles, including the inconic black Batmobile, which in this incarnation looks like a cross between a Hummer and a Ferrari, are inspired by the cartoon. Says Mattel brand president Matt Bousquette, the "point is not to just make souvenirs but cool stuff to play with."

Marvel, meanwhile is pegging its hopes on role-play toys, including giant hands and feet that kids can wear to become The Thing, from "Fantastic Four." The appendages are expected to retail for about $20 for a pair of feet or hands. Marvel is rolling out more products for "Fantastic Four" that for "Spider-Man" and "The Hulk" and says it is supporting the franchise with their biggest-ever ad campaign for a line of toys.

"In contrast, hasbro's planned line of "Star Wars" toys is "tighter" than in years past, says Brian Goldner, president of Hasbro's U.S. toys group. Over the past three decades, consumer retail sale of "Star Wars" - related toys, video games, clothes, shoes and other goods have topped $9 billion, making "Star Wars" one of the most successful movie related merchandise franchises ever, says Howard Roffman, president of Lucasfilm Ltd.'s licensing arm.

Lucasfilm executives expect retail sales of $1.5 billion or more for all kinds of merchandise from the coming movie, compared with $2 billion for "Episode I - The Phantom Menace," released in 1999, and $1.2 billion in retail sales three years later for "Episode II - Attack of the Clones." Believing they may have lost potential sales as a result of too little "Attack of the Clones" merchandise, they plan to ship more goods this time around, says Mr. Roffman.

The new "Star Wars" line is segmented for specific consumer groups, including collectors, young children, and tweens and teens. Action figures for the youngest fans feature bigger hands and feet, which make them easier to handle and play with. But many of the new products are aimed at so-called tweens, defined as kids from about eight to 12 years old, and even at young teens - age groups that seem to have left action-figure play far behind."

Another set of action figures are positioned on a base that has instructions on it about the character. Kids can battle the action figures like characters in trading-card games. Some of the new role-play toys include a "plug 'n' play" game, in which players hold a wireless light saber and fight Jedi and Sith on a TV screen: a Darth Vader helmet changes a kid's voice to emulate the villain's heavy breathing speech. A Trivial Pursuit game on DVD highlights factoids from all six movies as well as questions from 20 "Star Wars" fans. "We are reflecting the changing lifestyle and the other pursuits that boys are undertaking," Mr. Goldner says.

"We look at it from a long term point of view," says Lucasfilm's Mr. Roffman. "This is a day-in, day-out business for us, and although it spikes during big media events, like a movie, we can't manage the business strictly for the spikes."

=========================================================


Offline DoctorPadawan

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #5 on: April 10, 2005, 02:21 PM »
I didn't want to start a separate thread for this, and since it is kind of related to sales expectations, I figured it would fit well in this one.

On a trip to the local Target yesterday, I was absolutely shocked to see a mother and her two kids in the aisle (this is literally the first time I have seen a child looking at SW toys in Target in at least a year) looking at the new toys.  The thing about it was that the kids were not even interested in the action figures or vehicles; their main concern was the GUNS.  They were both begging their mother to buy them a gun (they went through them numerous times comparing the features before eventually deciding on Grievous' gun) and she (as in one of my pet peeves, e.g. taking a kid into a toy store, letting them look at all the cool stuff, and then saying what she said) said "No."  Her reasoning was what got me though, and I quote verbatim:

"20 dollars is too expensive for a toy.  It will be on clearance for half that in a month anyway.  They're just trying to sell it for more now before the movie comes out."

One of the kid's responses to this statement was priceless:

"There's a new 'Star Wars' movie coming out?"

That situation reminded me of the WSJ article (and thank you for posting that Xander as it was an interesting read) and LFL and Hasbro's attitudes about why the AOTC stuff didn't sell as well as they expected.  Mom didn't want to buy the stuff because it was too expensive (for her, at least, and being a presumptuous idiot like I am, it didn't look like she was having any money shortages by the size of the rocks on her fingers), and I got the impression that SW wasn't as big a selling factor for the kids as the fact that it was a cool gun that lit up and made noise. 

Hasbro needs to face the fact that, despite their constant claims to the contrary (and their persistent use of really insulting catchphrases lately toward collectors), collectors make up at least 80% of who buys these products.  Kids don't give a flying rat's ass about the Force Battlers and neither do adults.  That's why they (sans Vader) are sitting on shelves collecting dust not a week after their release.  If Hasbro put as much time into making the core lines of a much better quality than what they are and less time focusing on "new and exciting" secondary lines that might as well come with a SRP and a Clearance Price tag affixed to them in the case, the line might stand a fighting chance, and they might make more money than they did with the AOTC merchandise. 

But no, it's more economically feasible to develop another miniature line that nobody seems to be buying than it is to do VOTC-style versions of the main ROTS characters in Collection 1 that would surely sell a lot better than the 1500 versions of Obi-Wan that hang around forever.

Offline Darby

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #6 on: April 10, 2005, 04:52 PM »
I think kids are still a sizable part of it, but like you said, they only care about the lightsabers and guns.  I saw this same thing around here this past week.  Only one or two kids paid any of the figures any attention, and Hasbro has some bridges in Brooklyn to sell if they think any kid is going to absorb 56 of these in the span of a summer.

Offline bobafett14

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #7 on: April 10, 2005, 05:43 PM »
It was posted abouve, and I've mentioned this as well to my local collecting buds, but I agree the role-playing toys seem big with kids today.

The guns and sabers are what I see in kids hands and mom's carts.  The figures are in the adult colletors carts.  Vid games have pretty much killed the whole "sit down with your action figures and create a scene in your mind" thing that we enjoyed when we were 5 or 6.

I've already started to go back and grab a lot of the clearance sabers, and even a few viontage weapons.  I can see some nerdy whiny crybaby group sometime in the near future all of a sudden want to put a "BAN" on selling any weapons, and who knows, maybe toy guns and toy weapons  may be the big collectible in yrs. to come.

And as far as sales numbers, when AOTC  came out to me it seemed like you saw Anakin and Padme all over the TV screen vs. this year  seeing a lot of Vader, Chewie and Yoda which I would guess are FAR more exciting to the young'uns. ;^)
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Offline Nicklab

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #8 on: April 10, 2005, 05:59 PM »
My own midnight madness and the ensuing weekend's  experiences do go against the grain of what's been discussed here.  I actually ran across a number of parents with their kids in the stores picking out not only lightsabers, but new figures.  And a lot of the kids knew exactly what they were looking for.  Additionally, I've seen a semi-new class of collector:  parents who are collectors who have gotten their kids into it as well.  I saw at least half a dozen or more of these parent-child teams at Toys R Us that night.  Things like that are definitely a welcome sight.

I've seen the 80% number thrown around in this thread as well.  That number is soft, being more around 70-75%, and there's a big mitigating factor with it as well that has been overlooked.  That statistic is the market  share of collectors for NON-MOVIE YEARS.  That number skews much more in favor of kids during movie years.  I haven't seen hard sales figures on it, but that is indeed the case.

Hasbro does seem to be making some inroads with kids.  The Galactic Heroes line has been gaining some momentum, and  I've seen parents picking these up for kids.  However, one of the biggest sellers for kids is in the roleplay market.  Lightsabers and to a lesser extent blasters are the biggest sellers for Hasbro in the children's demo.

As for the decline in sales from EPISODE I to EPISODE II, there's a big factor that wasn't discussed by anyone in this thread or in the Wall Street Journal for that matter.  The economy.  Shame on WSJ for not even touching on that, because the 1999 economy was a lot stronger than that of 2002.  As a result, individual discretionary spending was lower in that time of economic recession.  People were spending less across the board , and that cut in personal spending has a more drastic affect on non-essential goods like toys and collectibles.  It's not always about the toys, folks.
« Last Edit: April 10, 2005, 06:00 PM by Nicklab »
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Offline bobafett14

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #9 on: April 10, 2005, 08:33 PM »
Thats a good point, now that the economy is great again, there should some decent spending this go-round.
Star Wars and toy Collector since 1978(age 7).  currently over 6,500 SW items in my personal collection. Collect modern/vintage and everything in-between ;^)

Offline Brian

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #10 on: April 11, 2005, 01:13 PM »
Quote
My own midnight madness and the ensuing weekend's  experiences do go against the grain of what's been discussed here.  I actually ran across a number of parents with their kids in the stores picking out not only lightsabers, but new figures.  And a lot of the kids knew exactly what they were looking for.  Additionally, I've seen a semi-new class of collector:  parents who are collectors who have gotten their kids into it as well.  I saw at least half a dozen or more of these parent-child teams at Toys R Us that night.  Things like that are definitely a welcome sight.

That is something I saw a few times opening weekend as well Nicklab, the "collector parent w/child" team.  Definitely something nice to see.  Overall, with what I have seen so far since the ROTS line was released, this is the most kids I've ever seen in the Star Wars aisle personally.  I'm definitely with those who say they see the role play items being the most popular overall, that is true here as well.  I've seen at least three seperate occasions in the past week plus where kids are contemplating with their parents on whether to get the Clone gun, Grievous Gun, or Chewie's gun...usually opting for one of the ones that makes noise :).  I remember quite enjoying the role play stuff we had in the vintage days as well when I was a kid, specifically the "force sabers" or whatever the lightsabers were called back then.  And all those did was whistle when you swung them around ;).  But, those were quite secondary to action figures.  Maybe I've always just been an "action figure" type of kid/person, but the vast majority of my friends were the same way, and I think that was just more of the fad in the 70s/80s than it is in the video game generation.  Anyways, back to the figure topic, I have seen a few kids looking through those as well....and these seem to be more "casual" figure buyers, not the collector kid variety.  From what I've seen, they are usually looking for the "name" characters....Vader, Anakin, Obi-Wan, R2, Chewie, etc.  In fact, just this past Saturday I saw a little boy and his sister go "Wow, Chewbacca" then ask their mother if they could get it, and she just told them to put it back and off they went.  I almost wanted to just buy it for them even though I had no idea who they were.  Maybe I was just spoiled, but if I was being a "good boy", I think I could have talked my parents into one action figure on a shopping trip.  I usually had enough allowance money on my own to pick one up, and can remember saving up for particular figures in the vintage days (Trenchcoat Han, Jedi Luke)....but as much as we will always take lower prices, I guess I don't think $5 is that much to give some joy to a child with a toy...especially when you aren't a collector and you're buying 20-50 of them ;).

Offline DoctorPadawan

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #11 on: April 11, 2005, 04:50 PM »
Quote
In fact, just this past Saturday I saw a little boy and his sister go "Wow, Chewbacca" then ask their mother if they could get it, and she just told them to put it back and off they went.  I almost wanted to just buy it for them even though I had no idea who they were.  Maybe I was just spoiled, but if I was being a "good boy", I think I could have talked my parents into one action figure on a shopping trip.  I usually had enough allowance money on my own to pick one up, and can remember saving up for particular figures in the vintage days (Trenchcoat Han, Jedi Luke)....but as much as we will always take lower prices, I guess I don't think $5 is that much to give some joy to a child with a toy...especially when you aren't a collector and you're buying 20-50 of them

I'm right there with you, mosnab.  When I was growing up, I got a 5 dollar allowance every two weeks (and then only if I had done my chores and behaved) and I used to look forward to going to the local department store and picking up 2 GI Joe action figures (showing my age there).  As I have no children of my own, I don't know how the allowance game works these days, but as I said before one of my pet peeves is kind of what you described the mother doing (and what I referred to another mother doing earlier in the thread).

When I was a kid, if we drove by a toy store and I asked to go in, my parents pretty much told me if I could have anything right then and there, before we even stopped.  More often than not, Dad would say, "We can go in, but we can't afford to buy anything."  I would know up front that I couldn't buy/get anything and most of the time I would elect not to go in since seeing all the cool stuff that I could not afford to get would have made me sad (reading that, it sounds like I was a shallow kid, but that's not the point).

Anyway, what always bothers me (and this is going to go horribly off-track, but I'll get back to the point in a moment) is when you see parents who take their children into a toy store like TRU or a toy section of a department store like WM or Target, the kids are just in awe of all the "cool stuff" that they see, and when they ask the mother/father if they can get something (usually a cheap item like an action figure or one of those non-electronic lightsabers), the mother flatly states, "No, let's go" and they drag the kid off.  Maybe I'm crazy, but it comes across as teasing in a way, akin to the old Eddie Murphy skit, "I got some ice cream, I got some ice cream, and you can't have none." 

But back the point, I must be living in a vacuum, because I don't see any children going through the action figures around my stomping grounds.  99% of the time, the only times I see children in the toy section is when they're looking at the bikes in Wal-Mart or the Leap Frog stuff.  The other 1% of the time, they're looking at guns (the toy ones, although strangely enough, the real ones are about 25 feet away in most WMs). 

Offline Xander

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #12 on: April 14, 2005, 02:47 PM »
Yeah, for some reason I noticed all the kids getting Star Wars figures this time around for ROTS. Its not like I've never seen it before, but its happened a lot in the last two weeks - the kids are getting into it, the mom asks if he wants to choose between Star Wars or another toy, and he wants the Star Wars. And its the figures I've seen the get.

I don't think this anecdotal evidence would convince me that a lot more kids are getting into it, but I know at least some kids are way into it.

What I can't believe in that article is how well they said the Hulk hands sold. I thought I was watching those things multiply before my eyes. Maybe they were actually selling, and they were just shipping a whole helluva lot more.

Offline CHEWIE

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #13 on: April 14, 2005, 03:24 PM »
The stuff does seem to be moving here, and they are constantly restocking... every time I see a place where some figures have sold, a day or two later it's slam packed again...

I just wish in the first 32 figures we had seen a few more army-builders... it would have really helped out, as I am beginning to see a peg warming build-up.  But it's still very early, and when the movie comes out, I am sure a lot more people will be wanting these figures.

 :P

Offline Jeff

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Re: Sales Expectations in a movie year - Wall Street Journal
« Reply #14 on: April 18, 2005, 10:10 AM »
Just an interesting tidbit I picked up today from the Hasbro First Quarter webcast on financials...

"Revenues in the U.S. Toys segment were $166.5 million for the quarter compared to $152.4 million a year ago, reflecting the initial shipment of STAR WARS products in advance of the May 19th movie release. The segment reported operating profit of $7.9 million for the quarter compared to $1.0 million last year. "

Need more proof that the toys sell better in a movie year?   :o

So, basically the initial store ordering for RotS figures/toys helped Hasbro jump waaaay up from last year.  That 1 million for Q1 2004 was mainly stores ordering in the Saga 2004 stuff (no OTC until 2nd Q 2004).

I guess jamming 32+ figures into a single toy launch IS a good thing to do... $$$.

Now of course, the retail stores have to actually SELL all that $7.9 million worth of product or Hasbro will end up with a 3rd Q 2005 buy-back cost.   ::)

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