Opinion: Is Hasbro Heading For Trouble As Stocks Fall And What Does It Mean For The Hobby Of Action Figure Collecting?

[JayC]

Hasbro has been making major media headlines this week and not in a good way. Yesterday Hasbro reported it's Q3 earnings which missed expectations and revenue that matched Wall Street projections.

Even Hasbro's gaming sales which has become big business for them was down 23% in Q3.

Of course all this caused shareholders to get jittery and in turn Hasbro's stocks began to tumble, dipping 3%. This was the lowest level Hasbro shares have been since 2015.

The biggest reasons given for Hasbro missing expectations for Q3 were of course inflation and “increasing price sensitivity” as Hasbro raised their prices to try and offset their increasing costs from the rising inflation.

Hasbro is hoping their Entertainment division which has also been struggling will help turn things around in Q4, citing things like the coming of shows such as The Rookie, Yellowjackets, Cool Summer and the launch of Transformers: EarthSpark on Nickelodeon and Paramount+.

Even before inflation had started becoming a real problem, Hasbro had been dealing with a number of internal problems. Late last year the company lost their long-time CEO Brian Goldner who passed away somewhat unexpectedly.

Then in February Hasbro found itself embroiled in a proxy battle with Alta Fox Capital Management who urged for new members to be added to Hasbro’s board and wanted the toy company to make changes to its current business strategy, including spinning off its lucrative Wizards of the Coast unit.

Earlier this month during Hasbro's Investor Day event they announced what they called Blueprint 2.0 which would bring about huge changes to Hasbro's business strategy. According to Hasbro's new CEO Chris Cocks, they would increase profits by 50% by the end of 2025. This would be accomplished by prioritizing bottom-line growth as they shift focus to fewer, bigger, and more profitable toy brands such as Magic the Gathering, Hasbro Gaming, Nerf, Dungeons & Dragons, Transformers, Peppa Pig, and Play Doh. In turn they would be licensing out their smaller, less profitable brands to outside companies that would take over manufacturing and selling those items.

Now obviously here at TNI we focus on action figures and the adult action figure collecting market, which in the overall scheme of things for a company like Hasbro is probably considered not much more than a drop in the bucket for their overall bottom line. That being said, I can tell you in my 20 years of covering this niche hobby I don't think I have ever seen public opinion towards Hasbro among action figure collectors as low as it is now.

Whether it be frustrations over lack of product availability with long-time pre-order windows, continued rising costs, windowless packaging, continued exclusives to retailers like Walmart and Target who are constantly canceling people's pre-orders or shipping collectibles out in envelopes so they arrive in less than pristine conditions, there is no doubt in my mind that lots of collectors are unhappy with Hasbro these days.

You can see this reflected in a number of recent failed Hasbro crowdsourcing Haslab campaigns including the Star Wars Black Series Rancor and Star Wars Reeva Lightsaber. The most recent Marvel Legends one for the Engine of Vengeance also seems destined to fail. While it still has until October 31 before ending, it has been steadily loosing backers since September 23. Even their most recent HEROSCAPE AGE OF ANNIHILATION gaming Haslab seems to be struggling and could also be in jeopardy of failing.

Star Wars and Marvel have always been big brands for Hasbro which they license out from Disney, but even those seem to be struggling these days. As Disney has started pumping out more and more movies and TV shows for those brands (Some of which haven't be received as well with fans as the older stuff was), its caused a glutton of product to be produced. Then you factor in the slowdowns with shipping, rising costs, removal of clear plastic on the packaging which many collectors have said they don't like, you can start to see a perfect storm of problems brewing for Hasbro.

I also don't think Hasbro's recent marketing strategy's trying to use random fans in the community as influencers has worked out terribly well for them. While I applaud Hasbro's efforts in recent years to try and better communicate with the fandom, I think the main outcome from this has been that they helped create cliques of fans that are perceived by some as being better than other fans. This in turn has created an almost "Civil War" type atmosphere on social media which does not do well in enticing new folks to the hobby. I think this has also helped contribute to Hasbro's overall negative image that seems to be felt by many collectors these days.

While Hasbro's overall troubles with Wall Street will likely be overcome in time, I can't say I see a terribly bright future for the hobby of action figure collecting as a whole. As costs go up and/or quality goes down, I see more and more collectors getting more and more selective in what they buy or just dropping out of the hobby all together. I see the crowdsourcing and/or made to pre-order model that causes the consumer to pay up front and lessen the risk to companies being used more and more. The upside to that is we will likely see companies willing to make more obscure items and characters, but the downside is longer wait times for getting the products in-hand and with smaller production runs even higher costs for the consumer.

I see big box retailers gobbling up more and more exclusives and putting more and more pressure on the toy manufacturers to cater to them in an effort to squeeze out small retailers. At the same time I see these big box retailers putting little to no effort in actually catering to the collector market. Holding "Collector-Cons" or "Geek-Out" events while letting scalper bots clean out their sites of products in seconds or shipping products out in envelopes is just flat out insulting to those of us in the hobby, but I see little chance of any of that changing.

I wish I had a better outlook for this hobby that I have dedicated the last 20 years of my life covering, but unfortunately right now at least if I am being completely honest with you, I do not.
 

[Satam]

Slumping sales due to "increased price sensitivity" = people aren't buying as much stuff at the higher price points. This seems like recognition that raising prices twice in a year was a stupid idea.

[Fozzi]

Yep

[MagnaPrime]

1 hour ago, Satam said:

Slumping sales due to "increased price sensitivity" = people aren't buying as much stuff at the higher price points. This seems like recognition that raising prices twice in a year was a stupid idea.

I'd like to give them that much credit but the greed from the current CEO is insane.  Doesn't care at all about the product or the consumer.  And they are really being tone deaf as to the fact that they are a luxury item in a rough economy.

[AvengerK2]

Discretionary spending is down across  the board as food, gas (which affects transportation and manufacturers and retailers) and durable goods become more expensive.  Manufacturers and retailers are sitting on inventory and not making orders.  Shipping had also slowed down as shipping companies like Maersk are reporting.  This is a dupply side inflationary effect.  You scream "greedy close all you want but margins are getting crushed as the public hunters down and prioritizes spending.  Toys are a luxury not a necessity. 

[80sboy4]

I'm not surprised by this report as inflation has effected everyone so as a consequence luxury items have become increasingly difficult for people to buy. For me personally the fact that the packaging now is windowless and the prices have increased dramatically effected my purchases of Hasbro toys.

Unfortunately that is the current state of things we live in now but things will change and get better as time goes on. What needs attention through is rethinking the windowless packaging as well as the price increases that have effected Hasbro even if in a small amount. 

[RickytheRockstar]

and i don't even think it's just collector's that aren't digging the windowless packaging, i went shopping with my sister over the weekend , she was starting Christmas shopping, and there were dolls that had windowless packaging and she commented how dumb it was and she would have bought them if she could actually see the doll instead of a illustration of what was inside.

i do think they need to re-think this idea, maybe online retailers get windowless packaging and physical stores get windows?

[kILLMonger]

This sounds like "lets blame the poors" when in reality with the high costs of everything and folks having to make choices, it's not to hard to see toys being one of the first to be cut back.  Having an originally 10 dollar fig now at 25 bucks isn't helping either.  McFarlane has managed to keep his figs at 19.99 and seems to be doing okay.  IDK why these people think jacking up the cost ever entices people to buy more as opposed to less.

[RoddyDrama]

Hasbro: We must stop using plastic because plastic is evil!

- What is it you sell?

Hasbro: Things made of plastic!

[Reno]

55 minutes ago, kILLMonger said:

This sounds like "lets blame the poors" when in reality with the high costs of everything and folks having to make choices, it's not to hard to see toys being one of the first to be cut back.  Having an originally 10 dollar fig now at 25 bucks isn't helping either.  McFarlane has managed to keep his figs at 19.99 and seems to be doing okay.  IDK why these people think jacking up the cost ever entices people to buy more as opposed to less.

The difference between Hasbro and McFarlane is that one is privately owned and one is a public company. The public company will always be about maximizing profit above all else, because that's what the stockholders expect. I've worked in finance/operations for multiple Fortune 500 companies during my lifetime and the common theme was always reduce expenses (i.e. labor) and increase profits every single quarter (because that's what shareholders expect). A privately owned company just doesn't have to meet that same standard. I worked for 2 different companies during the time that they transitioned from private to public and it was night and day after the transition ... it instantly became all about squeezing out everything they could down to the very last penny.

Even Todd has said that although he has intentionally left prices lower to more deeply establish his brand, that he will need to raise them in the near future. I'm just glad that the quality is better now. Anybody who bought Spawn toys in the 90's knows what I'm talking about - those were either super brittle or just statues.

It took me years to warm up to Hasbro after they took the Marvel Legends away from Toy Biz, but I actually think that we're in a golden age right now for these figures. I fully expect that whomever ends up with the license after Hasbro for Marvel and/or Star Wars will likely want to change the scale just like Todd did with DC Multiverse and Mattel has done with Masters of the Universe, for example. You'll remember Hasbro at one point wanted to change Marvel to be 1/18th like G.I. Joe and Star Wars were exclusively back then, but they soon flipped on that and now there are also Joes and Star Wars at the 6" scale. So I'm certainly in no hurry for the license to land elsewhere because just like with DC Multiverse, I'm not at all interested in starting completely over at a different scale after 20+ years of collecting.

 

 

[kILLMonger]

51 minutes ago, Reno said:

The difference between Hasbro and McFarlane is that one is privately owned and one is a public company. The public company will always be about maximizing profit above all else, because that's what the stockholders expect. I've worked in finance/operations for multiple Fortune 500 companies during my lifetime and the common theme was always reduce expenses (i.e. labor) and increase profits every single quarter (because that's what shareholders expect). A privately owned company just doesn't have to meet that same standard. I worked for 2 different companies during the time that they transitioned from private to public and it was night and day after the transition ... it instantly became all about squeezing out everything they could down to the very last penny.

Even Todd has said that although he has intentionally left prices lower to more deeply establish his brand, that he will need to raise them in the near future. I'm just glad that the quality is better now. Anybody who bought Spawn toys in the 90's knows what I'm talking about - those were either super brittle or just statues.

It took me years to warm up to Hasbro after they took the Marvel Legends away from Toy Biz, but I actually think that we're in a golden age right now for these figures. I fully expect that whomever ends up with the license after Hasbro for Marvel and/or Star Wars will likely want to change the scale just like Todd did with DC Multiverse and Mattel has done with Masters of the Universe, for example. You'll remember Hasbro at one point wanted to change Marvel to be 1/18th like G.I. Joe and Star Wars were exclusively back then, but they soon flipped on that and now there are also Joes and Star Wars at the 6" scale. So I'm certainly in no hurry for the license to land elsewhere because just like with DC Multiverse, I'm not at all interested in starting completely over at a different scale after 20+ years of collecting.

 

 

I'm fine with Marvel and SW staying with Hasbro.  They are doing a bang up job on product...it's their pricing choice and additions to figs that that horrid.  25 is asking a bit for a basic fig with just a BAF piece that is now pretty much a standard size fig.  Let's look at the new BP figs....the Hatut Zaraze is a great fig...but bare for 25 bucks.  Where are the goggles, weapons, vest? And Attuma is the the BAF?  Now I gotta go find some for a 25 dollar fig...unacceptable.

SW Black is what it is, a fig is a fig but again 25 now is asking way to much.

About the only pass I'll give them is Fortnite, because the figs are kitted out pretty good for the most part

 

My premise is that at 25 bucks...I'm being priced out of the hobby.  I used to be a double fig buyer...50 dollars for two 6 inch pieces of plastic now is asking quite a bit.  That's a near fill up of my ride...food...hell a game.  And instead of Hasbro reflecting on WHY sales are down...they are blaming consumers who really can't justify spending money on a unessential when so many necessities are also rising in price.

 

It's real simple... 

[ransomz]

Well, hopefully Hasbro doesn't go out of business before I get a re-do of the FA X-Men. I was not satisfied with the Toys-R-Us exclusive.

[Roadpigmaster]

I think Hasbro will continue in business and they most probably be more careful with their Haslabs projects from now on... I'm still fan of most of their products like GI Joe and Transformers and will be buying whatever I think fit my collection.

[AvengerK2]

When your manufacturing and shipping costs have been raised by energy costs yours looking at an inflationary effect from origination to retail.  It's important understand these price hikes are not demand driven they are supply side driven and start with energy cost.  ALL non essential goods companies are seeing declines in sales as consumers hunker down and prioritize spending.  Even McFarlane has said he has to raise prices at some point to meet his margins.  Toys are a luxury not a necessity.  No one with understanding with what's driving the cost up and forcing the consumer to prioritize spending is "blaming the poors".  On the contrary you should blame our "betters".  If you think this has peaked you're fooling yourself too.  These supply side inflation price hikes go in roughly 90 day cycles as new orders are sent to manufacturers and inventory sold. Only inventory is sitting there and shipping has slowed down. 

[kILLMonger]

22 hours ago, JayC said:

The biggest reasons given for Hasbro missing expectations for Q3 were of course inflation and “increasing price sensitivity” as Hasbro raised their prices to try and offset their increasing costs from the rising inflation.

 

10 hours ago, AvengerK2 said:

No one with understanding with what's driving the cost up and forcing the consumer to prioritize spending is "blaming the poors".

It's literally in the report (quoted to help you out).  It is "blaming the poors."   Literally, unabashedly, and without candor.  Not the lack of product on the shelves, poor case packs (looking at you Cosmos), minimum accessories, marginal BAFs, poor distribution of exclusives, price gouging (Haslab Ghost Rider, price hikes on various lines)...it was "increasing price sensitivity."  Blaming. The. Poors.  No one with understanding would try to clean up what Hasbro said out of their own mouths.  Yet here we are...did they promise you a Haslab Razorcrest if you went places and defended them lol. 

[Emummy]

I love the windowless packaging. Although I keep my classified boxes, breaking down the new marvel legends boxes for recycling is super easy barely an inconvenience. I freaking love the paper ties and the wax paper bag that the figure comes in which I use for figures I don’t have on display. I love that there isn’t a wasteful vac plastic surrounding the figure and a plastic window that I have to tear off the cardboard. 
I’m keeping to mostly MCU figures and  have a bunch of spider-man line stuff and x-men.  As for quality, I have most of the Atuma BAF wave now and the quality of Okoye’s face is frankly the best I’ve seen in Marvel Legends. Its likeness to the actor is incredible. Hell, even Everett Ross and Namor look great. Compared to actor likeness from even just the Love and Thunder wave the head sculpts and print application of the face of the Wakanda wave blow out past face likenesses out of the water. I have it on display with the rerelease of the the Chadwick Boseman face Black Panther and he looks kind of ridiculous in comparison. So much so that I decided to get the rest of the wave Nakia and Herat Zeraze just to see the better Lupita Nyong’o face and at that point decided I might as well finish the BAF.  I’m done with “one to rock and one to stock” as a collector. Life is too short for me now and I want enjoy these figures on display. F the boxes. 

Edited October 20, 2022 by Emummy
typos... I'm above Gramarly.

[kILLMonger]

42 minutes ago, Emummy said:

I love the windowless packaging. Although I keep my classified boxes, breaking down the new marvel legends boxes for recycling is super easy barely and in convenience. I freaking love the paper ties and the wax paper bag that the figure comes in which I use for figures I don’t have on display. I love that there isn’t a wasteful vac plastic surrounding the figure and a plastic window that I have to tear off the cardboard. 
I’m keeping to mostly MCU figures and  have a bunch of spider-man line stuff and x-men.  As for quality, I have most of the Atuma BAF wave now and the quality of Okoye’s face is frankly the best I’ve seen in Marvel Legends. It’s likeness to the actor is incredible. Hell, even Everett Ross and Namor look great. Compared to actor likeness from even just the Love and Thunder wave the head sculpts and print application of the face of the Wakanda wave blow out past face likenesses out of the water. I have it on display with the rerelease of the the Chadwick Boseman face Black Panther and he looks kind of ridiculous in comparison. So much so that I decided to get the rest of the wave Nakia and Herat Zeraze just to see the better Lupita Nyong’o face and at that point decided I might as well finish the BAF.  I’m done with “one to rock and one to stock” as a collector. Life is too short for me now and I want enjoy these figures on display. F the boxes. 

Man that Hatut Zeraze is a good fig...but it's missing a few things to really put it over the line...goggles, vest, and weapons...hell it would have even worked as a Kasper Cole or Hunter fig with just a bit more effort.  It gives...untapped potential and at 25 bucks...yeah it stings.

 

[AvengerK2]

Your ignorance seems to be surpassed only by your arrogance. "Increased price sensitivity" is across the board not just Hasbro sales.  It simply is saying that consumers are thinking twice about buying items as they become more expensive.  You yourself mewed about your reluctance to buy two figures approaching $50 earlier. That's called what? Price sensitivity?   You proved Hasbros statement about price sensitivity correct without realizing it.  They also cite inflationary costs as the reason for raising prices.  Are you saying those inflationary costs don't exist? They do I assure you.    I don't think your put down of my statement was the flex you think it was. 

[Emummy]

2 hours ago, kILLMonger said:

Man that Hatut Zeraze is a good fig...but it's missing a few things to really put it over the line...goggles, vest, and weapons...hell it would have even worked as a Kasper Cole or Hunter fig with just a bit more effort.  It gives...untapped potential and at 25 bucks...yeah it stings.

 

I'm curious what I can do with him once he is in hand. Like if I add Viper goggles and other classified weapons. If I was any good about customizing or kit bashing and could safely take the vest gear off of the Cobra Officer, I definitely could see his gear on the Hatut Zeraze to push him closer to what you are thinking.

[Satam]

@AvengerK2 and @kILLMonger Both of you guys knock it off. Disagreeing is fine, but this is starting to cross the line into fighting territory. I suggest you put each other on ignore and move on to other threads. @Emummy and others, stay on topic, please.

[MrWolf12000]

I agree with JayC I dont see this getting better. IMO it seems Hasbro has made their priority wall street over the consumer and as a result both are suffering.

For years now ive discussed a "toypocalypse" with my friends.

I thought we would get to 2030 before it got too expensive to be sustainable from both manufacturer and consumer standpoints but this past year has accelerated that timeline greatly.

With only 3 major retailers in the US (target walmart amazon), Hasbro holding the license to the vast majority of recognizable brands (in the action figure space at least) distrubution issues out the ass, the rising cost of raw materials and the shipping containers to get the finished product overseas coupled with the fact that these items while awesome are completely inessential I think by 2026 the hobby as we know it wont look the same at retail and sure as hell wont be affordable.

All opinion but looking at patterns thats what I see from my vantage point. I hope im wrong and if im not, they at least finish the 90s X Teams lol

[kILLMonger]

On 10/20/2022 at 12:23 PM, Satam said:

@AvengerK2 and @kILLMonger Both of you guys knock it off. Disagreeing is fine, but this is starting to cross the line into fighting territory. I suggest you put each other on ignore and move on to other threads. @Emummy and others, stay on topic, please.

All good....

[MagnaPrime]

On 10/20/2022 at 6:03 PM, MrWolf12000 said:

I agree with JayC I dont see this getting better. IMO it seems Hasbro has made their priority wall street over the consumer and as a result both are suffering.

For years now ive discussed a "toypocalypse" with my friends.

I thought we would get to 2030 before it got too expensive to be sustainable from both manufacturer and consumer standpoints but this past year has accelerated that timeline greatly.

With only 3 major retailers in the US (target walmart amazon), Hasbro holding the license to the vast majority of recognizable brands (in the action figure space at least) distrubution issues out the ass, the rising cost of raw materials and the shipping containers to get the finished product overseas coupled with the fact that these items while awesome are completely inessential I think by 2026 the hobby as we know it wont look the same at retail and sure as hell wont be affordable.

All opinion but looking at patterns thats what I see from my vantage point. I hope im wrong and if im not, they at least finish the 90s X Teams lol

Yeah if they don't learn that happy consumers buying more is how they can get their stocks up I don't know what is gonna happen.  Blaming it on the economy is valid to a point but their insane practices are helping make it worse.  I just need them to finish the mini before they implode