Insights into Collectible Figure Manufacturers and Customers

Part
01
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Part
01

Top 5 Collectible Figure Companies in the US

Hasbro, Lego, and Mattel are the dominant players in the overall toy market industry. Funko made a total of $400 million in revenue for 2016 with Pop! line as its best-seller. Nintendo's Amiibo is considered as a different market category but remains a popular collectible. More details on the collectibles market are discussed below.

METHODOLOGY

Industry and market research reports, as well as trusted media sites, were extensively reviewed. Overall, it appears that the collectibles market is subdivided into different market categories and a clear distinction as to which company dominates the overall collectibles space is unclear. Based on several market research reports that were reviewed, the top players in the overall toys market are Hasbro, Lego, and Mattel. Each has their own respective lines within the collectibles market.

Funko, while part of the collectibles market, does not appear to be among the biggest players in the overall space. However, information on it was included as requested.

Nintendo's Amiibo, on the other hand, is considered part of the "toy to life market," which research suggests is a different category. However, the Amiibo line itself is considered a collectible, the history of which is included along with other information, as requested. Also, Nintendo is generally more considered as an electronics company and does not appear to be listed among the top players in the toy collectible market. Please note that one article from 2015 was used a reference due to its relevance to Nintendo's Amiibo line.

Where available, market sales revenues were provided along with product lines which were considered successful by trusted media reports. Sales or units sold were not available for some items. More details can be found below.

TOP COMPANIES

1. HASBRO

• Sales:
Hasbro, Inc. is said to be the #2 toymaker in the U.S. In the first quarter of 2017, its revenue rose to $849.7 million due to a high demand for toys based on franchises such as "Transformers." Hasbro’s total sales for 2017 was $5.21 billion.
Hasbro’s Franchise Brands were also said to have grown by 10% to US$2.56 billion in 2017. Their Partner Brands reported a net revenue of US $1.27 billion.

• Product Lines:
Early this year, Hasbro rebooted their Mighty Muggs line by recently releasing Star and Marvel characters. They also registered the Mighty Muggs brand at the U.S. Patent and Trademark Office under the category of "Toy action figures/collectible toy figures." It is speculated that they did this to re-enter the area now dominated by Funko. No information appears to be available on the sales or units specific for this line.

Hasbro's top revenue source is from its Franchise brands, which covers many iconic Hasbro toys such as Transformers and Magic: The Gathering. Its Partner Brands came second, which includes Star Wars collectibles. Sales or units for these brands or specific product lines also do not appear available.

2. MATTEL

• Sales:
In 2017, Mattel’s total sales were $4.88 billion.

• Product Line:
In general, Mattel’s top lines include Hot Wheels, Matchbox, Fisher Price, and Barbie. They also have a line of Star Wars, Cars 3, and Wonder Woman toys, some of which compete with Hasbro's. Total units for each product line, except for Barbie's did not appear available. Mattel's Barbie brand generated gross sales that amounted to $954.9 million in 2017. Barbie dolls are also considered collectible toys with some of the more valuable ones fetching up to $160 or more.

3. LEGO

• Sales
Lego's total North American Sales were at $3.79 B for 2015-2016, however, no breakdown for the US appears available.

• Product Lines
Lego's collectibles line includes Lego Brickheadz which was launched early in 2017. The line features Lego bricks and illustrated instruction manuals and includes a collectible figure. No information seems to be available on units sold or on other successful collectible product lines.

4. FUNKO

• Sales:
In 2016, the company was said to have posted $400 million in revenue, which was 50% higher than the previous year.

• Product Lines:
Funko’s Pop!, which came out in 2010, is its best-known and best-selling line. It is its main growth driver, having sold different types of collectibles from “Star Wars” to the “Golden Girls.” The Funko collectibles market is also said to have been growing from 25% to 50% annually for the last several years. Hasbro and Mattel have also licensed their properties to Funko.

5. NINTENDO

Nintendo is mainly known for selling electronic entertainment products internationally. They provide "video game platforms, playing cards, Karuta, and other products; and handheld and home console hardware and related software." A short overview and history of its Amiibo product line are given below.

• Sales:
In the first nine months of 2017, the company's sales more than doubled from a year earlier to JPY 857 billion ($7.9 billion).

• Product Line:
In 2014, Nintendo entered what is referred to as the “toys-to-life” gaming category. The first line of figures they released was the Super Smash Bros. for the Wii U. By the first half of fiscal 2015, they had shipped a total of 21.10 million Amiibo toys with 7 million being sold in the U.S. The total amount is said to have represented more than $270 million in revenue for Nintendo. These toys are considered as collectibles as there is a "large community of collectors who are willing to invest $13 to collect a tangible representation of each of their favorite characters." During the first three quarters of 2017, roughly 6.5 million Amiibo units were sold.

Over the years, however, Nintendo's home console and handheld gaming device has been its top product lines; units sold were not included since they are not part of the collectible toys market. No other information appears to be available on other collectible toys they sell.

CONCLUSION

To summarize, the top competitors in the overall toy market industry are Hasbro, Lego, and Mattel. Funko does not appear to be a dominant player but made a total of $400 million in revenue for 2016. Nintendo's Amiibo is considered part of the “toys-to-life” market but appears to be a popular collectible.
Part
02
of two
Part
02

Collectible Figure Marketing and Consumer Profile (US)

Nostalgia plays a major factor when marketing to collectors. Adult collectors that have an attachment to a specific superhero or franchise are usually targeted by marketers. Action figures from superhero movies are the most popular among collectors. Licensing with big franchises has played a major role in the toy business. Adults or millennial parents are the main consumers of these products. More details can be found below.

METHODOLOGY

Several industry and market research reports, as well as trusted media sites, were carefully reviewed. Information specific to product differentiation or specific release schedules per company were not readily available. Neither did there appear to be a breakdown of the spending behavior of casual fans tending to buy toys as gifts versus hardcore fans. The frequency of purchase and total amount bought by collectors also do not appear to be readily available. Despite the limited availability of the aforementioned points, information on some product lines and collector spending behavior were indicated where possible. Most publicly available market research reports don't include specific information on these details and will likely have to be purchased directly, however, information on some items were included. Please note that one article from 2014 was used a short reference due to its relevance to Funko Pop's history and product line, as nothing more recent appeared available. More details can be found below.

OVERVIEW ON COLLECTORS AND THE COLLECTIBLES MARKET

In 2016, the collectibles sector was up by 33 %. The number of superhero movies that have been released over the last few years is said to have contributed to the boost in sales.
There are said to be two types of adult collectors, the first has an attachment to a specific superhero or franchise and is willing to spend for it; the second is the more traditional collector who views it as a long-term investment. Most marketers target the first group, while children aren’t targeted as much for superhero marketing.
The collectibles toy market is said to have evolved over the years from a niche to a mass market, which can be seen by the increasing number of retailers choosing to sell collectibles.

The toy sales of movie-driven action figures are dependent upon the presence or absence of collectors. Adults represent a significant percentage of the consumer group buying collectible toys.
Women are said to account for roughly 60% of superhero merchandise. Majority of overall sales are made through licensing with major toymakers like Hasbro and Mattel. Licensing major superhero properties accounts for “40 to 45 % of their success on toy shelves.” The market is directed towards adults who want to relive their days as kids.

BACKGROUND ON LICENSING

The US is said to be “the birthplace of many international licenses and is the biggest licensed toys market globally.” Character/Entertainment is among its most popular licensing categories. The sales of licensed toys are dominated by Action figures.
Licensing has played a major role in the toy business for the past several years (capturing about 30% of total U.S. toy sales).
Character licensing includes properties largely from films, TV shows, and others. Promotional licensing also features adult-targeted classic characters that appeal to their sense of nostalgia. Properties that are marketed to children have also been marketed secondarily to adults by creating a “cool” factor around them.
There is a large demand for licensed goods, mainly prompted by popular film launches, which have included Teenage Mutant Ninja Turtles, Avengers, and Star Wars. In 2017, there were several that came out that had tie-ins with toy manufacturers, these included two Lego movies (Batman and Ninjago), Cars 3, Smurfs: The Lost Village, and Beauty and the Beast. Many of these movies have their own figures or action figures which are popular among adult collectors.


TOY COMPANIES

1. HASBRO

MARKETING TECHNIQUES
Star Wars, Spider-Man, Transformers, The Avengers and The Guardians are the five main properties that drive Hasbro's Action Figure program. It is estimated that 25% of Hasbro’s business is derived from its association with Disney, from which they get their Star Wars license. The marketing of these products is aimed at appealing to the nostalgia of collectors.
CONSUMER DEMOGRAPHICS

Collectors of Hasbro toys were estimated to have accounted for about 30% of all Action Figure sales. Adult collectors, who grew up with Star Wars or other nostalgic brands, still buy a lot of their merchandise.

2. MATTEL

MARKETING
Like most of the top toy companies, Mattel also has licensing deals with big franchises, such as Cars and Star Trek. They are also known for iconic brands, such as Barbie. Barbie has been one of Mattel’s most successful and profitable toylines. Their marketing likely also relies on the nostalgic factor among adults.
CONSUMER DEMOGRAPHICS
Barbie collectors are typically women aged 40+ who are fashion-oriented. Research by Mattel also found that 9% of action figures are purchased for girls.

3. LEGO

MARKETING TECHNIQUES
Lego's marketing likely also relies on promoting nostalgia to their market. Some of their products have been licensed from recent blockbusters such as Ghostbusters and Robocop.
Lego also has a licensing deal with Star Wars and has benefited greatly from it, as it has been one of the biggest franchises over the last several years.
Similar to Nintendo, Lego also has a foothold in the “toys-to-life” market space and has released products targeted to those who were around in the 80s. Their products include the Lego Dimensions line-up: Gremlins, The Goonies, Knight Rider, the A-Team S5. Targeted at generational consumers “who want to own tiny representations of the things they loved.”
Lego has also had licensing deals with Marvel and DC, accounting for many of Lego’s profits. Lego’s two most profitable licensing tie-ins are the Star Wars and Minecraft franchises.
CONSUMER DEMOGRAPHICS
Their collectible products are also aimed at people who grew up around 'nostalgic' films and who now have an income to spend. Approximately 53% of Lego’s consumers are male, aged 35-44.

4. FUNKO

MARKETING TECHNIQUES
Funko is a key partner for retailers and movie studios and has agreements with all major studios. Funko's business model is more commonly focused on “non-exclusive novelty licenses."
In 2014, Funko had around 180 unique licenses from movies, TV, comic books, video games, sports, and others. They have secured the rights to many signature characters, which include Star Wars, Star Trek, Ghostbusters, Game of Thrones, The Walking Dead, etc. Their three biggest licenses include DC, Marvel and Lucasfilm's Star Wars property. Nostalgia is also a likely factor that drives sales for these products.
CONSUMER DEMOGRAPHICS
Funko's business is said to be “agnostic to demographics, income, age and gender,” as they have licensing rights to more than 1,000 properties.

5. NINTENDO

MARKETING TECHNIQUES
Nintendo's pre-existing market likely includes long-time fans who grew up with their products over the years. They have been making and selling videogame merchandise for a very long time. Nintendo is said to know how to build hype well, as they release figurines together with big game launches (i.e. Smash Bros, and Amiibo). Like Lego, they also appeal to nostalgia when marketing their products.
CONSUMER DEMOGRAPHICS
Similar to the companies mentioned above, their collectibles are aimed at adults who grew up around the 80s and who now have an income to spend, typically men in their 30s and 40s.

CONCLUSION

To summarize, when marketing to collectors, toy companies appeal to their feelings of nostalgia. Adult collectors that have an attachment to a specific superhero or franchise and who are willing to spend money are primarily targeted by marketers. Action figures from superhero movies are the most popular among collectors. For the past several years, licensing has played a major role in the toy business, capturing about 30% of total U.S. toy sales.
Sources
Sources

From Part 01