Plummeting Star Wars Merchandise Sales Indicates Consumer Fatigue with the Brand

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Toy sales for “Star Wars” toys took a big dip last year, and it looks like Disney and Hasbro may need to rethink their strategy going forward in order to entice children, and adults, back into the toy store aisles.

According to Bloomberg, there are several factors that may be affecting the decline in sales of Star Wars toys. Various factors, such as today’s children are not as interested in the latest line of Star Wars toys, there were no real standout characters from “The Last Jedi”, and with the movie “Solo: A Star Wars Story” being the 4th Star Wars being released in less than 4 years, consumers could be experiencing “Star Wars” burnout. It did not help maters that “The Last Jedi”, although critically praised, received a very mixed review from the fans.

At this time, this may not be something that Disney needs to be overly concerned with, but it could be the start of a downward trend. We will have to see if this trend continues when the toys for “Solo” are released this April.

From Bloomberg:

Toymakers’ big bets on movie tie-ins look downright bleak. Playthings based on the “Star Wars” saga — the franchise that kicked off the whole phenomenon four decades ago — were down in 2017 despite a new film, “Star Wars: The Last Jedi,” in December during the all-important holiday-shopping season.

Call it “Star Wars” burnout, or better yet “movie fatigue,” said Gerrick Johnson, an analyst for BMO Capital Markets. Hollywood and toymakers have fixated on toy-friendly films at a time when kids are increasingly turning to YouTube, Netflix and social media for entertainment.

More than 20 major films, including “The Last Jedi,” had robust toy-licensing programs last year. A decade ago, it was about half that. Movie attendance in the U.S. has dropped almost 14 percent in that span.

“There are so many screens now; kids aren’t just at the movies,” Johnson said. “A movie doesn’t have the same resonance it used to.”

While “Star Wars” was still the top-selling toy line during the nine-week holiday period, it fell to second place overall last year and below the all-time high seen in 2016, according to data from market research firm NPD Group shared with Bloomberg News.

“Star Wars is a force to be reckoned with in the toy industry,” the brand’s owner, Walt Disney Co., said in a statement. “It remains the leading film-driven property for the entire year.”

Toymaker stocks declined on Thursday. Hasbro Inc. fell as much as 3.6 percent, its biggest intraday drop in almost three months. Mattel decreased 2.2 percent. Disney shares slipped as much as 0.3 percent to $111.61.

Sequel Barrage

After a decade without a “Star Wars” film, Disney has released three movies since December 2015, and another one is coming in May. The latest installment, “The Last Jedi,” didn’t include many new memorable characters beyond those introduced in the preceding film, Johnson said. That left fans looking for newness elsewhere this year, leading to weaker results than expected, he said.

U.S. sales of the brand’s toys slowed in late 2017, Drew Crum, an analyst for Stifel Nicolaus & Co., wrote in a note to clients last week. This was despite “Last Jedi” being the top-grossing film released in the U.S. last year at $596 million.

Adult collectors, who grew up with the brand, are still buying a lot of merchandise when the toys come out, but demand dies down afterward, according to Johnson.

That doesn’t bode well for Hasbro, which has the main “Star Wars” toy partnership, or Jakks Pacific Inc., which has a secondary license. Jakks said it couldn’t comment on “Star Wars” sales, but that merchandise tied to “Moana,” another Disney film, “remains very strong.” Hasbro declined to comment.

The “Star Wars” performance could hinder Disney’s bid to revive growth at its consumer products division, where sales fell 13 percent to $4.83 billion for the fiscal year that ended Sept. 30.

Dragged Down

The September bankruptcy filing of Toys “R” Us Inc., which makes up about 15 percent of the market, added to the challenges for “Star Wars” sales growth this year, though the company continued to market the toys.

Visitors to the Toys “R” Us store on Los Feliz Boulevard in Los Angeles recently had plenty of “Star Wars” merchandise to choose from. A whole aisle included everything from a $3.99 Millennium Falcon Hot Wheels car to a $250 AT-ACT remote-controlled vehicle that walks and fires Nerf projectiles.

Tracey Gordon, a full-time mom from Glendale, California, shopping at the store, said her three boys, ages 2 to 7, aren’t “Star Wars” fans even though she wore a Princess Leia costume on Halloween for years when she was younger.

“It’s a generational thing,” she said, adding that her nephew likes the toys largely because his dad “drags him to see the movies.”

Gigantic Boon

For years, Hollywood’s push into comic-book heroes and other childhood fare was a gigantic boon for the toy industry. In the last decade, entertainment-related toys grew from 15 percent of the industry’s revenue to 38 percent, according to BMO. The movie tie-ins helped propel the industry to some of its strongest growth in decades in 2015 and 2016, when “Star Wars” merchandise was the top-selling brand with more than $700 million in sales.

In the first half of 2017, tough comparisons to previous “Star Wars” sales contributed to declines in the building products and action figure categories, according to NPD. The market research firm, which is expected to report full-year sales numbers later this month, said in July that it was projecting 4.5 percent growth overall for the industry in 2017.

 

More Coming

Even more toy-licensed films are scheduled, including the prequel “Solo: A Star Wars Story” and new Transformers, “Fantastic Beasts,” “Jurassic World” and superhero fare. The lesson toymakers will draw from the 2017 slate is that they can’t just rely on the movie to do the marketing anymore.

“There is a new paradigm,” Johnson said. “Just because there is a movie with a toy tie-in doesn’t necessarily mean it’s going to work. It used to mean it would work.”

Source: Bloomberg

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About the author

Joe Hogarty

Joe moved from New York to Florida back in 1997. He currently resides in St. Petersburg and visits the parks frequently. His first visit to the Magic Kingdom was when he was 8 years old back in 1974. Joe originally originally started as a photographer for WDWNT and is now the host of WDWNT: Nerd Alert, our movie reviewer and reports the news for WDWNT. You can contact Joe through email at [email protected]

23 Comments

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  • I definitely am getting fatigued on Star Wars but I am in shock that the Frozen sequel isn’t due until the end of 2019! I thought it was the end of 2018 and I was looking forward to that but realized its almost 2 years away

    • Boys are the major drivers of Star Wars toys sales. With the Star Wars Brand becoming increasingly feminized, boys are naturally less interested than they were in past generations. How many Star Wars-leaning boys 6-10 (the ‘girls have cooties’ age) are going to want to play in the backyard with Leia, Jynn Urso, Rey, Rose Tico or Admiral Holda figures…

      • I can’t tell if you are trolling or not…..but as a young girl I played in the backyard with Luke, Han and a whole slew of male actions figures. If this is the case, then there’s a problem in how we are raising our boys.

        I really think kids are just more interested in screen based games—both boys and girls.

  • This isn’t franchise fatigue – this is a direct correlation to the stories the movies are telling. What child wants to play with Rogue One toys and recreate the adventures where everyone died? What child wants to play with toys from The Last Jedi with beaten up snow skimmers that were promptly all blown up?
    The Force Awakens didn’t have this problem and original series Star Wars toys continue to sell well as does original Star Trek series merchandise but not the toys from the JJ Abrams movies (which annoys Paramount to no end)
    You’d think the execs would understand that after the disaster of the Dune toy series from the 1980s movie which had a MASSIVE toy tie-in (coz, hey – it’s a scifi movie and scifi movie toys always sell!)

    • Is there a scenario with a Star Wars movie a year that one actually does better than the first? I don’t think there is. It’s going to be slow, but with one movie a year, it can only go downward.

    • Right on! Who wants to buy a Luke who was made into a crazed grumpy old man? Who wants to be snoke who has no major role or captain phasma who was thrown away? Kylo Ren has no mystique without his helmet. The movie threw away so many story lines and now you see the result of that in the toy business. What major heroes came from the Last Jedi? Poe? I think not because he was made into a gung ho fly boy….I personally did not like this movie and rated it among the worst and I haven’t purchased any merchandise for me or toys for my son since the movie. Even the AT-AT walkers….there was no major engagement that made you say…WOW!

  • I think there are a couple factors at play here. I used to collect the Kenner line when I was a kid, my son has just recently gotten into the Hasbro 3.75 inch figures. I think one of the big issues is the availability of the figures. There is not a lot of stock of some of these toys, and most stores have all the same characters. You almost have to go online to buy anything and collectors scoop up the popular characters and sell them online for twice the amount you can get in the store. When I was a kid there were some rare characters but stores Usually had a lot of stock.

    • My fondest memories as a kid was going to Rose’s store with my mom. I was almost always able to walk out with a least one new SW figure every time. Ah, the good ol’ days.

  • One of the main issues right now seems to be the amount of animosity Disney has created amongst Star Wars fans. You can’t let a director such as Rian Johnson have free reign to destroy the legacy, honor, and heroism of Star Wars favorites such as Luke Skywalker, and then expect that children will want to buy (or have their parents buy) the toys of those characters. Disney made a massive misstep here, and I believe the negative ramifications to the brand are just beginning. You can’t destroy fictional cultural icons and then want to make money from toys off of a movie people hate.

    I haven’t seen a film so divisive since Passion of the Christ, but Mel Gibson wasn’t really trying to sell Jesus action figures. Star Wars is going on a downward spiral from which it may never recover thanks to this franchise destroying film.

    • I agree with you. This is the first Star Wars movie I haven’t seen in theaters since 1977.

      I even paid to go see the original ones when Lucas “re-did” them.

      My youngest son, named after Obi-wan, was very disappointed in this film and my oldest son has completely given up after the destruction of Luke Skywalker. (They are 26 and 31.) This has translated into my oldest not taking his children….there is no future generation.

      Rian did us all a disservice in trying to be edgy, innovative, and different. When will these arty types learn that there is nothing wrong with giving us a good and straight-forward story with heroes.

    • I hear u bro, greed has clouded their vision and our favourite franchise can very aptly be known onwards as “Star Brand Milking Wars”!! Still so saddened about TLJ….

  • I am surprised Rian Johnson did not kill off Jedi Mickey Mouse in the movie. Fans wanted to see Luke turn into a better version of Ben Kenobi only to be met with complete disappointment. I wanted to see an action packed star wars with light sabers, but got a rendition of Don Juan DeMarco (wow was that painful). You could cut the who casino scene to give fans more action. The whole attrition deal just dragged and dragged. I know I will not buy the blu-ray and I own every other one.

    • I agree. I will not buy TLJ nor do I own a copy of TFA. But I must say that Rogue One was spectacular. I wish they’d had picked Gareth Edwards to do the next set of movies.

  • It is not fatigue. That is the corporate spin on the larger issue – this was a very divisive film. As a 40 year old, with 2 young children, my wife bought a tremendous amount of merchandise for TFA. Prior to TLJ, we already had a porg and my son had the red Snoke guard suit.

    After watching that film? We haven’t bought a single item. A massive, massive disappointment – and this is coming from 2 die hard SW fans from when we were children.

  • I don’t think this is necessarily about Star Wars, but rather about the toys. They just weren’t good this year. My son is a huge Star Wars fan and loves the toys, but when he looked at the new line of action figures, etc., he was kind of “Meh.” In 2016 they had a lot larger of a toy line and had a lot of new characters to introduce from the Force Awakens. Last Jedi, there were few *new* characters, and there are not a lot of new toys that we’ve seen.

  • Please tell me this is a downward trend in the future. I didn’t care much for Star Wars to begin with but the oversaturation of it in Disney property to the point where its presence is more noticeable than most IPs that Disney created are really starting to turn me off from Disney parks and I say this as somebody who literally lives and breathes Disney parks.

    It isolates the fans of Disney and if even Star Wars fans are unhappy, please just let this be the end for a very long time.

    • Um, Frozen was in all the parks except Animal Kingdom although I’m surprised they didn’t try to shove something in there about the dwindling reindeer population with Sven.

      Star Wars is only showcased in Hollywood Studios and once it moves into its own “land,” the rest of the park will probably be free from it.

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