Looking back at 2009; Hasbro and Disney make big moves, video games take a big fall

These are the toy industry stories of 2009 that I believe will have the most far reaching implications for the future:

1.       Hasbro became a media company

When the history of this era is written, I think that Hasbro’s decision to move from being a toy company to becoming a media company will be seen as highly prescient.     Why, because truly successful companies will be those who position themselves as players in the play/entertainment business.   By doing so, Hasbro will be able to monetize its intellectual property through movies, television, video games and more. This is just the beginning of a long term trend of the consolidation of the play and entertainment industries. It will be interesting to see how Mattel, Lego and other toy companies will respond.

2.       Disney bought  Marvel

Disney didn’t wait long to respond to Hasbro’s move. I firmly believe that Disney bought Marvel in order to counter Hasbro’s move into television. Disney has been in the play/entertainment business for 50 years plus and they don’t welcome strangers. They wanted to make sure that Hasbro didn’t have access to Marvel on its television network and they wanted to make sure that they had strength in boy’s properties.   Look for Disney to continue to protect their turf by making more strategic acquisitions. 

3.       Video game sales took a dive

2008 looked like Wii was going to capture all of the moms and the video game industry was just going to continue to grow by double digits. In fact, my take was that the video game industry hurt the toy industry more in 2008 than did the recession. Well, that reversed in 2009 with video game sales falling off the table. What’s the future of video games? Well, I think hard times; too much gaming and time competition from social network sites and cell phones.   Watch for video gaming companies to either make acquisitions or be acquired.

4.       There were no major safety recalls

We got through 2009 with no major recalls and no safety headlines. Great news for the toy industry that showed it knew how to get its house in order. That plus the CPSC backing off of the timetables meant that 2009 was a good year for safety.   The hounds are no longer baying and I think we could see further loosening of over regulation. Keep your fingers crossed.

5.       2009 wasn’t so bad after all

I don’t know if you remember but back in January there were some pretty anxious people. Manufacturers and retailers were in grave doubt as to what was going to happen to not just the economy but the entire economic system. In fact, when I posted a blog entry on September 1, 2009 entitled, “Prediction: Toy industry sales will be up 1% plus in the second half of 2009,” there were people who told me that they were surprised and relived to see someone predicting good news.   Well, that prediction is looking pretty good right now so all things considered, 2009 could have been a whole lot worse. The future still looks funky for the world’s economies but analysts are back to thinking toys are recession resistant. Look for investors to buy into toy companies and for toy companies to become more robust in developing new products.

6.       Zhu Zhu Pets got hot

The toy industry needed a hit toy and it got it in Zhu Zhu pets.   A potential future Toy Hall of Fame candidate, these hamsters drove consumers back into the toy department and got retailers excited again.   Based upon demand and product shortages, Zhu Zhu pets may be around another year. It will be interesting to see how Cepia handles 2010. If they do it right, they could continue to help themselves and the entire toys industry.

What do you think were the biggest stories of 2009?