Action Figure Fury and Hasbro’s Monopoly on Action Figures

On July 15 A Call to Action (Figures): Hasbro was posted at actionfigurefury.com. Ryan Bradley’s thoughts on action figures, and his statement that Hasbro has a monopoly on action figures, struck me as a fan perspective and not in any way touching on the business side of toys that I posted a response to Bradley’s post. Go ahead and read those if you missed them . . . because we’re just getting started and you’ll want the back story.

Bradley has offered up A Call to Action (Figures): Spotted Online Response, his response to my response of his original post. For the record, I love this sort of exchange with other bloggers online. Getting a discussion going — and opposing opinions trading links and ideas — is far more entertaining than almost anything else that can happen in blogging so I am officially thanking Bradley for reading and responding to my post. This is fun!

Action Figures and Cheese

Bradley writes in his post:

“The goal of this kind of writing as I see it is to further the understanding between collectors and companies, and the collector’s viewpoint is as valid as the businesses in that conversation.”

For me, it depends on the company we’re talking about. Hot Toys. Sideshow Collectibles. Even NECA, to a degree, I can agree that the opinion of collectors is important to the overall business. Those manufacturers design and produce action figures that are clearly geared toward collectors; not too many parents are buying Hot Toys action figures*. There’s something about these multi-hundred dollar toys that make them not the sort of thing parents look at and say: “Well, maybe he’ll like this toy.”

For these manufacturers, touching on those key points that excite adult collectors is vital to the success of their business. These toys need to be poseable and reference-accurate and hit every little geek bone in our bodies to grab our attention . . . and grab our dollars. And when you spend $100, $200, $300, or more on a single action figure then your expectations of quality are quite high . . . and rightly so! It’s kinda like buying cheese at the grocery store; when buying cheese that costs 10x or 20x Kraft singles you had better be getting some great cheese. I like cheese.

An inexpensive $10 or $20 Hasbro action figure is the equivalent of Kraft cheese. Cheap, plentiful, and made with just enough quality to keep a kid happy for a little while. The fact that some adults out there enjoy and collect these toys is icing, but Hasbro’s core business is in producing toys priced cheaply enough that parents don’t have a problem buying one or two of them at a time. And yes, I just called Hasbro action figures Kraft cheese. You know what? As much as I love quality cheese (how did this devolve into a cheese discussion?) there are times when I can appreciate a cheap slice of Kraft. Not every moment of my life must be filled with the good stuff. Sometimes I’m craving a bit of junk in my life . . . and that’s just fine.

You Cannot Hold a Monopoly on Action Figures

Bradley’s original post that sparked my own response tried to claim Hasbro had a monopoly on various action figure brands. I pointed out how the stated brands are available from others, and Bradley’s newer post states:

“He makes another good point about Hasbro not having a monopoly. I shoehorned that word in their for the sake of a bad joke, but I feel like that saying my post “is about Hasbro having a monopoly on action figures” is inaccurate.”

I believe that saying Hasbro doesn’t have a monopoly on action figures or even brands is 100% accurate. Toys are unnecessary playthings and collectibles, and possessing a license — even such a thing like a master toy license — is far different from a monopoly because monopolies are specifically about commodities and services that are not simply diversions from life. A monopoly on providing telecommunications, electric, or cheese is a serious thing that puts people at a disadvantage. A monopoly on Star Wars toys, if there were such a thing, wouldn’t matter. None of us need Star Wars toys to survive in American society. Not getting something vital — like cheese — would be disastrous.

Bradley continues by saying:

“First, not having a monopoly doesn’t mean that Hasbro doesn’t have most of the mass market action figure licenses. They have G.I. Joe, Star Wars, Marvel, Transformers, and Jurassic World, which is pretty dominant set, and Hot Wheels, a non-action figure brand, has no real bearing on that.”

Does Hasbro hold several licenses? Absolutely! The company sees licensing as important to their business and has been willing to invest in those licenses. Licensing, though, has nothing to do with monopolizing an industry or even a style of toy within that industry. Many are free to create their own action figures, but Hasbro has a competitive advantage because the company sinks so much time and money into researching and acquiring licenses. That’s simple business. And smart in today’s crowded market.

Now if Bradley had wanted to dive face first into Wikipedia’s entry on monopolies and state that Lego, Mattel, and Hasbro hold an oligopoly in the toy industry then I may have been writing a post of agreement. That’s probably a discussion for another time.

And as to whether or not Hot Wheels toys are relevant, I believe that this TIA data demonstrates that the vehicles category is every bit as important as the action figure category.

Bradley then closes his paragraph with:

“Second, while my article does start by misusing the word monopoly, that isn’t what the article is about. Moving forward it shifts to talking about Hasbro not putting out high enough quality output for the licenses that they have.”

That’s where I believe the whole “agree to disagree” needs to come into play. Hasbro’s action figures are definitely not of the same quality as those of Hot Toys and Sideshow Collectibles, but we’re back to looking at Hasbro as the Kraft cheese of action figures. The bar is significantly lower for Hasbro’s $20 action figures relative to a Hot Toys $200 figure, and while I would like more and better paint apps on Hasbro toys I understand why that isn’t realistic. Having worked in manufacturing — and having spent time researching paint apps and quality costs — I can say that for the level of near-perfection adult collectors demand of Hasbro we should expect to pay $30 to $40 for a single 6-inch action figure.

Bradley’s original post showed us action figure eyes and complained about the paint apps. Hell, I’ve complained about painted eyes myself at times. But in my research into pre-painted plastics I can say with certainty that getting those near-perfect eye paint apps is remarkably costly.

Who here is willing to pay 50% to 100% more per figure for slightly better paint applications?

Finally, Bradley states:

“Finally Reed says that, “We cannot demand perfection in mass-produced toys because the cost and QC we demand simply don’t make sense in $10 and $20 toys” and that’s the crux of our disagreement as I see it. I don’t think we can demand “perfection” in these toys, but I believe there is a bare minimum of quality that needs to be met.”

And that’s the key thing to understand. I believe — and this belief is based on discussions with factory reps, costing our pre-painted plastics, and in conversations with toy industry professionals — that what Hasbro (and Mattel) are providing us is the bare minimum of quality at the level we’re paying. We’re getting exactly as much as we’re paying for in today’s market. And as China’s labor issues continue — bloomberg.com, thediplomat.com — we can expect to see increases in the costs of manufacturing toys. This leaves companies like Hasbro choosing to either decrease costs in manufacturing — by scaling back on paint quality, for example — or increasing the MSRP of their toys.

And since MSRP increases are more readily obvious to parents while paint quality is something unseen by the majority of Hasbro (and Mattel) customers . . . well, I’m sure you can figure out where this is going.

And that’s where it always shakes out: Money. Hasbro has to keep their MSRP on action figures low enough that parents — still the major purchasing force in mass market toys — are willing to spend the money to buy the occasional action figure or two. Drive that cost too high and those sales collapse entirely. By shaving costs at the factory here and there — reduced articulation, decreased number and quality of paint apps, mold reuse — companies can keep their costs low and keep MSRP points down.

It’s all very simple business, and while I know Bradley believes that business doesn’t matter to his expectations, there’s nothing more important to the future success of action figures in the market.

Related articles

• Hot Toys Reveals 1/6th Scale Millennium Falcon Cockpit (geektyrant.com)
• Special Savings on Select Hot Toys 12-Inch Scale Action Figures at Sideshow Collectibles (battlegrip.com)
• Star Wars Celebration: Sideshow Collectibles Booth (comicvine.com)