May 9, 2015 – Today’s article may be a bit unusual, but it provides some insight into how a multi-billion dollar toy company (Hasbro) operates – and some questions that may never be answered.
As with many things Star Wars-related, we begin with a small action figure, Ezra Bridger (Saga Legends series). If you’ve been watching Disney’s animated series, Star Wars Rebels, you understand the tremendous popularity of this figure and his fellow crewmates. And if you’ve been searching high and low and following discussions from many Star Wars collector sites, you also understand how confoundingly difficult it can be to purchase these small (3.75″) plastic action figures.
Since about 2012, it’s been a hit-or-miss proposition (but mostly misses) in the toy store aisles of Target, Walmart and other retailers when it comes to finding desirable Star Wars figures and vehicles from Hasbro, which has a near-exclusive license. Granted, traditional brick-and-mortar stores have faced increasingly stiff competition from online retailers, such as Amazon, over the last decade. But even the online vendors are having trouble stocking the Star Wars items which consumers demand.
Vague assurances and platitudes from Hasbro do not help. (“We’re looking into that” … “Great idea, we’ll explore that more” … “Well, the dockworkers’ strike and the bottleneck in San Diego….”) In fact, if you visit Hasbro’s website, www.hasbrotoyshop.com, you will almost never find Ezra Bridger’s fellow crewmates available for purchase. The droid, Chopper, is maddeningly difficult to find at a reasonable price ($30 to $40 on Ebay is not reasonable), and the two female warriors, Sabine Wren and Hera Syndulla, are nearly as rare.
As of today, Hasbro’s website still does not list Hera, Sabine or Chopper at all, despite Star Wars Rebels’ popularity and the huge pent-up demand for the action figures. Whereas, Ezra Bridger is listed (but “out of stock” for now), and the always present Kanan Jarrus is – well – always easily available for purchase in multiple packaging configurations. Go figure.
So what’s going on with Hasbro? Is the company struggling financially? Are management, sourcing and procurement, and manufacturing and distribution in disarray? Or has the toy company simply stopped caring (become tone deaf, even) and lost touch with its customers?
Financially, Hasbro is doing very well, as the following report illustrates.
In short, Hasbro’s net revenue increased 5% to $4.28 billion for FY2014, and its adjusted operating profit increased 7%. Hasbro’s President and CEO, Brian Goldner, stated: “2014 was a good year for Hasbro. We grew revenues, profitability and returned significant capital to our shareholders.” Leading the growth was a 20% revenue surge (to $1.48 billion for 2014) in the boys division with strong sales from Transfomers, Nerf and Marvel items.
No data were reported for Star Wars sales.
In 2013, The Wall Street Journal reported: “Hasbro said it will pay up to $225 million in guaranteed payments to Disney in anticipation of the next three Star Wars sequel motion pictures and other potential Star Wars-related entertainment that weren’t contemplated under the previous agreement.”
That’s a boatload of money. So clearly, Hasbro is doing well financially.
As for the sluggish volume of Star Wars products, both online and at retail, my best analysis is this: The Star Wars line is NOT currently Hasbro’s main focus. As Hasbro’s FY2014 report above indicates, its main revenue for boys toys came from “strong sales from Transfomers, Nerf and Marvel” – not Star Wars.
These numbers will no doubt change once the Star Wars sequels and anthologies roll out (one per year) for the next five years or so. Conversely, the lack of any live-action Star Wars movie since Revenge of the Sith in 2005, meant that Hasbro could give the franchise a lower priority focus. The dramatic decline in product availability since around 2012 reinforces my belief – never mind the release of the Saga Legends, Mission Series and Black Series collections. These were lifelines to keep the Star Wars brand somewhat alive.
This brings us back to the story of Ezra Bridger: Curiously, for a brief moment around late April/early May, identical Star Wars 3.75″ action figures were listed for sale on Hasbro’s website and on its Ebay site as well. However, the Hasbro site prices were $5.99 each, and Hasbro’s Ebay price was $5.10. Identical items from the same company. Different prices. (But alas, no Ezra Bridger).
Then on May 3rd, Ezra popped up on the Hasbro site ($5.99), along with free shipping. So I ordered two. I thought to myself, “Surely, Hasbro is going to take a net loss on this transaction. I’m paying them only $11.98 (for two figures, plus tax), and Hasbro still has to pay for the product, the cardboard box they were shipped in, employees’ time, and shipping costs to both FedEx and the U.S. Postal Service. Aren’t they going to lose money on this transaction?”
Maybe yes, maybe no. If it’s a one-time loss, chalk it up to good business advertising and good will as part of Hasbro’s “May the 4th” promotion (free shipping!). And it’s probably safe to say that most consumers who buy directly from Hasbro at its website are frequent shoppers with high-dollar purchases over the long run.
As a sidenote, FedEx’s online tracking tool provides a (somewhat) interesting glimpse into Ezra’s journey from Allentown, Pennsylvania to Winter Park, Florida (near Orlando) via Dillon, South Carolina (must be a FedEx facility there).
While I will always sing the praises of FedEx and the USPS, for their efficiency and speed – and the great tracking tool which allows customers to track their orders most every step of the way – I will never understand how Hasbro could turn a profit on this latest transaction.
Ezra traveled a total of 1,032 miles (1,661 kms) in five days. But his arrival raised more questions than answers:
Q: Your paint apps are beautiful, but what’s with the limited five points of articulation?
Q: You come with a removable helmet, but no light saber. Similarly, your white Ezra Bridger cadet variation has a helmet, but again, no light saber. Why did Hasbro decide to forgo your all-important weapon?
Q: When you left the factory in China, did you see any additional batches of Chopper, Sabine or Hera on the assembly line?
Q: Any word on an eventual release date for The Ghost ship? You and your crew spend an awful lot of time on it.
And so that’s how the conversation went in early May, Hasbro still shrouded in mystery. As for Ezra, he is one lump of orange plastic that’s not about to reveal any secrets.