Monday, April 14, 2014

The Mouse and the House of Toys

Here is a paper I wrote for a college course in 2012.               
                                                                                                                                                                Critical Thinking
                                                                “The Mouse and the House of Toys”

Allow me to lay the groundwork for why this article, “Would Disney buy Hasbro?” by Jason Notte, is relevant to my interest. I have been a fan of Hasbro toys, the Star Wars “universe”, and Marvel comic books a good portion of my life. As a child most of my favorite toys were made by Hasbro Toys including but not limited to G.I.Joe and Transformers.  As an adult collector I have been buying Star Wars action figures since 1995, and they were a good part of my childhood toy collection as well. I also watched the Star Wars prequel movie trilogy which spanned from 1999 to 2005. When I was a teenager in the 1990’s I was a big fan of Marvel comic books, in particular the X-Men part of the fictional universe.  The article directly addresses the companies that make my hobbies and interests possible.
                The crux of this article is the “news” that surfaced this year within days of Disney buying Lucasfilm, that Disney buying out toy manufacturer Hasbro was in the works. Although speculative at best, the article I chose for this paper is from MSN Money, and could be perceived as business news. Business news, from what I have observed, is very speculative in terms of the stock market and mergers and acquisitions. As a speculative article I have some input about what the author discusses in the article. I feel this topic of Disney possibly acquiring Hasbro Toys in the wake of recently acquiring Lucasfilm (the owners of the Star Wars Universe) this year and Marvel Comics a few years ago is of keen interest to me. The hobby of collecting toys, comics, and such is also a very speculative hobby as interest in such things is, at least in part, driven by the value of said collectables.
                At the beginning of the article, the author starts with a questionable analogy comparing the two large companies Disney, and Hasbro, as kids on a playground.  The companies involved mean big business.  Hasbro is one of the largest toy companies in the world. Disney is a juggernaut in children’s entertainment. This subject matter isn’t as trivial as the value kids put on trading cards and the like.
                Notte moves directly into pointing out that the source reporting the future buyout is questionable. I don’t know that this qualifies as a fallacy as the author clearly points out the questionability of the source. However, this article was not the only one to speculate on Disney possibly buying Hasbro. All sorts of web sites were picking up this story, when word broke. Really if the “news” is coming from one questionable source, it pretty much would be more a rumor than news.  However reliable news sources cited this virtual “fact”.
                The business writer claims that the speculation of the purchase to be fairly “solid business bedrock considering Disney loves buying anything a kid has ever liked.” This statement is basically just thrown out without strong support.  So Disney bought Marvel, Lucasfilm, and Pixar Animation. Pixar had worked nearly exclusively with Disney for most of its feature length computer animated films. Marvel did own a bevy of superhero characters. Lucasfilm owns Star Wars as well as special effects house Industril Light and Magic, which had been responsible for a lot of ground breaking special effects in film since it was formed in the 1980’s. However these transactions all happened within the last ten years and previous large buyouts don’t seem to come to my mind, besides perhaps Disney’s operation of Jim Henson Studios.
                Disney itself has been largely responsible for bringing “anything a kid has ever liked” into existence with its own powerhouse full of intellectual properties over the course of decades.  It just seems like good business sense to shore up different elements of children’s entertainment under one large umbrella, having created so much children’s entertainment themselves.
                The purchase of Marvel gave Disney the opportunity to publish comic books without having to start a publisher from the ground up, which has been a shaky proposition for other would be comic upstarts in the past few decades. The acquisition of Lucasfilm not only gives Disney control over the fictional Star Wars but also an integral filmmaking special effects department, ILM. That should allow Disney to develop modern special effects in house instead of subbing it out.
                The article may be guilty of begging the question when pointing out that although Disney now owns Star Wars and Marvel characters, it doesn’t own the rights to the license to produce toys of said properties. Although current licensing agreements with Hasbro might be able to be renegotiated now that Disney owns Marvel and Lucasfilm, but given the longevity of Disney itself, they could just wait out the current toy agreements. As a toy collector I have noticed that Disney has gone to cheaper no-name toy companies for action figure lines for such films as “Pirates of the Caribbean” and “Tron Legacy”. The toys for these films were shoddy at best, and clearly Disney wanted to maximize their profits and minimize potential loss by making cheap toys and selling them at prices comparable to quality toys such as those made by Hasbro.  I personally don’t think Disney would have Hasbro make their toys. For the original “Toy Story” film Disney used a small company Thinkway toys to make the film’s toys but after it was successful switched to signing a licensing agreement with Mattel (Hasbro’s Rival).  Also I don’t think Disney has worked with Hasbro previously for any of its intellectual properties.
                The idea that Hasbro will be “funneling money away from (Disney)” since Hasbro currently owns the rights to the toys from Marvel & Star Wars movies, is backwards thinking. Hasbro would be doing all the heavy footwork of design, product development , marketing , and market research. With Hasbro having a track record of delivering profits from these toys, Disney would in fact be profiting by allowing Hasbro to continue the production of movie toy tie-ins.  Hasbro has a decades long proven track record of producing premium quality toys. Hasbro sets high standards in toy making, standards many of Disney’s toys have yet to meet (especially in terms of likenesses of characters).
                Even though Viacom’s Paramount Pictures may own the rights to the first three Transformers films and the first G.I.Joe film; there is no guarantee that these two properties will continue to be “cash cows” for Viacom. Viacom might be better off selling the rights to future sequels off to Disney to get money up front rather than wait for the possibility that continued sequels would be large box office draws. Also prior to the live action movies of Transformers and G.I.Joe from the past handful of years a different company owned the rights to the animated feature films based on these properties from the 1980’s. So it’s not a stretch that another company like Disney would take over the rights to future films of these two franchises, not to mention possibly gaining the rights to the current Paramount films.
                The conflict with Discovery Network sharing partnership with Hasbro of their joint venture, cable network “The Hub”, in regards to Disney wanting to fold the network into their own stable may be overplayed as well. With both Disney and Discovery being large companies, it’s also unfair to claim that these two companies couldn’t work out terms for transfer of ownership (or partial ownership) of Hasbro/Discovery’s joint cable network “The Hub” which launched in 2010. Different distributors have gained the right to the home video market of Hasbro’s properties in the last three decades. Would it be a surprise if another company, like Disney, gained television distribution rights of Hasbro’s current shows.  Another option might  be new shows based on the properties currently being shown on “The Hub.”
                 The author goes on to suggest that Disney is in an all encompassing exclusive toy agreement with Hasbro’s rival Mattel.  Again I cite that both the Pirates of the Caribbean film franchise and Tron Legacy had toys produced by a company other than Mattel or Hasbro. Disney is likely to handle toy rights as one intellectual property at a time. This would allow for different manufacturers to produce toys per property which seems to be what Disney has been doing with at least its market for boys’ toys. Personally I have been attracted to the toys produced by Hasbro for their superior construction and attention to detail. The only toys I can think of that I have purchased that were made by Mattel are “Monster High” dolls which are a girl’s toy property.   Also, different toy companies have had the rights to produce toys based on the same property, like Hasbro and LEGO both having separate agreements to make toys based on Star Wars.
                The author refers to Mattel as “the biggest toymaker in the US”, but calls Hasbro “ ’a’ toy company.” Hasbro is not just another toy company. Hasbro is also one of the largest toy companies in the US . Mattel and Hasbro have rivaled each other for decades in regards to size and revenue. If Disney were to acquire Hasbro, they would either wait out any agreements made with Mattel or end those agreements.
                The author treats a recent decrease in revenue by Hasbro as though Hasbro’s other toy properties are “toys nobody wants.” Hasbro itself has been “shoring up” its own stable of properties and licenses over the last three decades, building its portfolio up. Also if Hasbro’s girls’ toys jumped up 17% on its own within Hasbro, then it doesn’t necessarily need a property like “Disney Princesses” to increase revenue in the girls market. Also the basis of Hasbro being purchased by Disney is that it would improve Disney’s strength in the boys’ toys markets, which is the primary reason Disney did acquire Marvel and Lucasfilm.
                The suggestion that the talk of Disney acquiring Hasbro is “premature” because it waited three years between buying Marvel and buying Lucasfilm. This is in a way the fallacy of conventional wisdom, whereby because Disney waited three years between the first two purchases that it somehow would have to wait another 3 years before considering buying Hasbro. This ignores all sorts of market factors, like available capital, the rapid growth of Disney which could lead to being able to make these large purchases sooner. Also it assumes that Hasbro would be bought with a price tag in the vicinity of $4 billion because that is roughly how much Disney paid for Marvel and Lucasfilm respectively. The market value of Hasbro in its entirety isn’t actually investigated in this article, it is simply assumed to be similar. Hasbro may have either more or less value than the other two companies were sold to Disney for.
                This entire speculation that Hasbro may be bought by Disney as reported by only one source, and needing some three years to come to fruition, only helps drive the rumor. If the public and business news sources won’t know an outcome of this rumor for upwards of three years, it leaves plenty of time to be guessing about the future of both Disney and Hasbro. 
                Another thing not addressed is whether or not Disney acquiring its own toy company would violate Anti-Trust/Monopoly legislation. If Disney had a vertical monopoly of owning all forms of marketing from film, to comics, to toys their might be a possibility that the merger isn’t even possible.
                The author closes with another questionable analogy comparing the CEO of Disney and the possibility of buying Hasbro to that of a child and a holiday toy.  The whole proposition of $4 billion being child’s play is ludicrous.  Many factors come into play with a deal as large as the done deals of Disney with Marvel, and that with Lucasfilm, or the proposed buyout of Hasbro.  All three parties have market shares of very different elements of the entertainment industry.  It is not clear why the connection between Hasbro and Disney was given as much credence as that in this article and others like it on the internet.
                To sum up, I strongly believe the proposition of a buyout is bunk. Firstly Disney and Hasbro have rarely worked together on boys’ toys projects in the past. Secondly Disney has been known to seek smaller toy companies with lower quality toys rather than take the kinds of risks that Hasbro does when it commits to a toy line. Next Disney owning a toy company may form a vertical monopoly that may not pass Anti-Trust regulations. Even though Hasbro owns a lot of intellectual properties, the marketability of the majority of them on a level that would make the buyout profitable is unlikely. As much as I respect both Disney and Hasbro for what they have offered the public as far as entertainment and collectability based on my years of experience as a buyer of Hasbro products, I doubt Disney is a good fit for what they have to offer.

Works Cited:
“Would Disney buy Hasbro?” Jason Notte, November 6th 2012, (

Thursday, April 3, 2014

Hyper Articulated & Accessorized 1:18th Scale Figures, it's a whole new game, to Marauder Task Force!

Well as recent readers may be aware, I am a huge fan of Hasbro's G.I.Joe. I think one of the things the Rise of Cobra 2009 Movie toyline did right was present the Joe team in a blue camo duty uniform. Finally giving Joes that much needed "uniformity". I know what some of you are thinking: "Heresy! Joes are a team of unique specialists without a single 'uniform'!". Funny the 1982 Joes are collectively referred to as "Green Shirts", but then G.I.Joe branched out and every new team member seemed to bring their own outfit to the battlefield, or Chaplain Assistants' Motor Pool. Well I was psyched about the release of Steel Brigade Trooper, as it represented the average Joe, instead of the very Specific Joe. I own at least 24 Pursuit of Cobra Steel Brigade Troopers. I am still a huge fan of all the specialists in the original line and onward, I just wish that occasionally they would get into a standard uniform. Well.... Marauders Gunrunners, who have been making and selling 1:18th scale weapon accessories for years, launched a Kickstarter at the beginning of April that is about to augment the ranks of your favorite base soon... well wait, Are you an adult? This is important, because these are not "toys" but "gaming system figures" and as such are strictly for adult collectors. Well as I am typing this blog entry on the third day of the Kickstarter campaign the project's base goal of $30K is met and exceeded, tooling has been green-lit. Now let's be totally clear here, Hasbro's G.I.Joe is the premiere long standing toy action figure line. I love the toys. Now as an adult, I am ready to get myself some great "gaming system figures". Will they be as cool as Joes? The proof will be in the pudding. Delivery of figures is estimated for Christmas of 2014. Hasbro and Marauder Gunrunners are two unique and different companies and I am not suggesting a direct tie between the two companies. Nor do I work for either company, nor at the time of this writing am I in an advertising affiliation directly with either of these two companies. Solely as a adult fan of highly articulated military toy figures with tons of accessories I recommend, if you are an adult collector, to check out the Kickstarter project and decide for yourself if this is the sort of thing the average Joe has been waiting for:

Marauder Task Force Gaming Figures