How Hollywood Is Toying With Children

When I was a kid, it was all about the Star Wars toys. And I obviously wasn't the only one with a Land Speeder and an X-Wing Fighter. Star Wars toys have made more than the movies themselves, around $7 billion, according to a recent article in Forbes. And today, toys are still big business in Holllywood. There are nine movies with toy-related items for sale during the three month summer window, the LA Times is reporting, but opening-weekend metality is affecting action figures as well. "It has become so crowded that kids don't have the time to let that emotion [for the movie] percolate," said Martin Brochstein, editor of Licensing Letter, a monthly newsletter that tracks toy licensing. "The retailers are not looking to keep things on the shelf for as long. It's become a business of caution."

But that doesn't mean that this summer won't be a big one for the toy industry:

Toy industry analysts expect this year to be strong in action figure sales because of the number of summer movies featuring swashbuckling heroes or crime fighting characters including "Spider-Man 3," "Pirates of the Caribbean: At World's End" and "Fantastic Four: Rise of the Silver Surfer." The biggest seller of the season, however, could be Transformers, the popular toy series that will be brought to life by Michael Bay's upcoming action film. "Transformers," which features the heroic robot Optimus Prime and the villainous Megatron, will be released July 3 by Paramount Pictures. The toys have been out since early June.

Action figure sales could use the boost, as 2006 was a down year with sales falling 9% (partly because 2005 was such a robut year because of Star WarsL Episode III Revenge of the Sith). Last year, action figures generated close to $1.25 billion of the $22.6 billion of overall toy revenue. And this summer, it looks like Hasbro, one of the makers of the Star Wars toys that I loved so much (along with Kenner), has the most on money on the table, according to the Times.

Hasbro holds the master toy license to three Marvel superhero movies being released this summer, "Spider-Man 3," "Transformers" and "Fantastic Four: Rise of the Silver Surfer." That means the manufacturer will essentially be competing against itself in the toy aisle.

Gerrick L. Johnson, an analyst with BMO Capital Markets Corp. believes "this [Marvel licensing] deal will be a profitable one for Hasbro; we also think it is expensive and risky," he wrote in a recent report. The company needs $1 billion in Marvel related sales over the next five years to make a profit on the licenses, he said, expressing concern that interest in super-hero-related movies and toys will begin to wane. Hasbro, however, is confident it will gain from its Transformers brand and has signed deals with 230 licensees worldwide for T-shirts, bedding, cellphones and shoes.