Sales of major toy factories have been falling.
In the first half of the year, Lego’s earnings report showed that compared with the same period in 2016, revenue fell by 5 percentage points and profit fell by 6 percentage points.
Hasbro's share price fell 9% in the second quarter, but sales have increased due to the demand for Transformers. But this situation may not last.
Mettle, a well-known toy manufacturer that produces Barbie dolls, only released data for the first quarter, with revenues down 15% and shares falling 11% on the second day.
Is the traditional toy manufacturer already dying?
1. Anti-Fighting City bankrupt
US toy retail giant Toys R Us declared bankruptcy and received more than $3 billion in bankruptcy protection financing to support the normal operations of approximately 1,600 stores. There are reports that Toy Hut’s total liabilities exceed $5 billion, and the company’s cash is only $300 million.
Toys R Us was founded in 1948 and currently has 1,782 outlets around the world. It was once known as the “category killerâ€. However, since Private Bain Capital privatized the acquisition of Anti-Dow Toy City in 2005 for 6.6 billion US dollars, R Us has been facing huge debt problems, sales have fallen for five consecutive years, and the sales of baby toys have stagnated in the first quarter of this year. The net loss reached $164 million.
2, Lego layoffs
Lego is considered to be a veteran of the traditional toy industry. Its LEGO bricks, from wood to plastic to LEGO robots, are well received by players.
Today, more than 80 years later, Lego announced that its first sales volume has fallen in 13 years, resulting in layoffs.
However, Lego’s problem is not serious. Lego launched the IP film “Lego Play Movie†in 2014, and it was a great success. In 2017, it launched “Lego Batman Movie†and cooperated with game manufacturers.
In January of this year, LEGO released the programmable building boost series, and in February launched Lego life, a social networking platform for young people under the age of 13, where users can create virtual personal images and share ideas and works.
3, Mei Taier fell
The sales of Barbie, the flagship product of Metaler, fell 13%, and the same is the main girl toy market. The income of American girls has increased by 12%.
Mattel suffered from the enemy. In 2014, Hasbro smashed the love of Disney Princess, but the hardware used by the company to compete with LEGO, the acquisition of the Canadian toy factory Meijia named Mejia building blocks, sales plummeted 38%, while competitors, Lego In 2016, it created the highest revenue in history.
In the toy war, Meyr is empty, obviously can not blame the big environment, but the problem of its own business strategy. After the news that Toys R Us filed for bankruptcy, the company’s share price fell more than 6%, even creating a new low after the financial crisis, with a market capitalization of only $5 billion.
Later, Mittel learned the lesson and began to develop Barbie dolls on artificial intelligence, virtual reality glasses boxes, etc., and began to connect with the mobile Internet.
4, Hasbro transformation
Hasbro is in a dominant position in the industry competition, but with the gradual decline of the traditional toy industry, Hasbro believes that the game industry is much larger than the toy industry.
As a result, Hasbro acquired the Irish animation company Boulder Media in July last year to gain brand influence after the merger and acquisition, and to enter the game industry.
Even though the rights to produce Disney Princess and Frozen Dolls were achieved, in the second quarter of 2017, Hasbro’s revenue was only $782 million, even less than the same period in 2015.
Disney Princess toys sold well, but Star Wars toys sold poorly. Some analysts pointed out that the problem with Hasbro is that most of the revenue comes from one aspect of growth, not the growth of the overall business.
Hasbro's gaming business ranks third, but it is the most important growth point that leads Hasbro to achieve future breakthroughs.
In this way, the decline of the traditional toy industry has become an irreversible trend. At the same time, the sales of toys on the online shopping platform are rising, and the major toy manufacturers have begun the transformation of the Internet. Market agency one click retail statistics, Amazon's online shopping toy sales increased by 24% last year.
In general, traditional toys are not completely replaced by digital toys and games. However, traditional toy manufacturers still have to follow the trend and accelerate the transformation of digital.
Of course, this does not completely make traditional toy manufacturers come back. Every company faces different problems. In the face of common difficulties, traditional toy giants should work together to tide over the difficulties and focus on creating differentiated competitive advantages, so that they can maintain core competitiveness for a relatively long time.
But unfortunately, under the attack of network platforms and digital products, the physical toy industry is in a recession. Do you know that children will play Barbie dolls and building blocks in the future?
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