Hasbro Says Price Increases Will Soften Sales While Mattel Disagrees

Hasbro

by Jay Cochran
February 15, 2022

There was an interesting article that ran today on the business news website CNBC in regards to the looming price increases coming to the toy industry and how differently companies Hasbro and Mattel are viewing their impact on their bottom lines. In the article Mattel seems to paint a more positive outlook saying despite the coming price increase they think people will continue to buy at the same volume and velocity as before. Hasbro seems to think otherwise and is tampering down expectations as they expect toy sales growth to recede over the next two years.

Now before we go any further I think it's important to note that both companies, when talking sales are referring to parents buying toys for their kids and not speaking to how they think the buying habits of the adult action figure collector might change. This CNBC article is something both companies know will be read by their shareholders, and my experience when it comes to that sort of thing is the adult action figure collector doesn't even register on their radars. So whether either company fears declining sales from the adult collector demographic really can't be determined from this article.

Anyway at the crux based on this article, Hasbro seems to feel as the COVID pandemic seemingly begins to reach it's end and people start traveling more and no longer stuck in their homes, Parents will start to shift their money to spending it on travel and leisure as opposed to toys for their kids.

The article goes on to elaborate on reasons why Mattel is optimistic about growth naming off things like how they recently got back the license to make Disney's princess dolls as well as having a bunch of feature films in the pipeline that are based on their products such as Hot Wheels, Magic 8 Ball, Polly Pocket, Rock 'Em Sock 'Em Robots, Uno and Barney. No mention of Masters of the Universe at all.

The article also points out how Hasbro might be deliberately trying to tamper down expectations because they have a new CEO. Chris Cocks, the former Wizards of the Coast president, is taking the reins from interim CEO Rich Stoddart, who held the position after Brian Goldner passed away in October 2021. Cocks' first day on the job is February 25 and the thought is he may need a couple years to get things going. In Wall Street its sometimes better to set expectations low and then if you over perform everyone is wowed as opposed to setting expectations high and then under-performing.

For me the most interesting thing about this article is that it shows Hasbro knows with rising costs, it's likely going to hurt their sales to some degree. I see a lot of people online who seem to think these companies are raising their prices essentially to price gouge people and increase their profits. Yes as expenses go up no company is going to continue to make products at a loss, so the choices they are generally faced with are to quit making the product all-together, try and cut production costs in ways that generally results in an inferior product or raise the prices to offset the added expense to make said product. Out of those three choices I would go with the price increase, and if prices get to a point where they are no longer practical, then people will quit buying it which is a very possible eventual outcome for this hobby. As to what that price point is, that is something each individual collector will have to answer for themselves.

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Comments...

Last 10 comments - ( Read All Posts )

Batfreak87 - 2022-02-18 @ 6:43 am

I think Hasbro is right- if they're only thinking about parents buying toys for kids- the velocity and volume of buying might go down with the price increase. Adult figure collectors maybe might go down too, but probably won't change much no matter what's going on in the world. Unless there's super high unemployment.

MagnaPrime - 2022-02-16 @ 11:53 pm

I think Hasbro is right. They are about one more price jump from pricing me out of more serious collecting. And my kids will be getting less too.

K9K1N6 - 2022-02-16 @ 5:39 pm

yeah, i might go for the price increase too, i've always been stuck to my plan on getting 1 action figure per month til they reach to the price i'm not daring to go for a figure, nuff said there for me.

Archaengel - 2022-02-16 @ 4:42 pm

I'm not a marketer or an economist, but just using common sense, I anticipate that sales will trend downward until wages can begin to match the rising costs of luxury goods. Considering that something like Marvel Legends has increased the price by 20% in the last 14 months, people will not continue to purchase them at the same rate until their wages have also gone up 20% since 14 months ago. Because if they do, they will have less (relative) money in their pocket. Unless the buyer makes a wage that the increased price doesn't impact their ability to afford their other expenses, then they're fine. But that's not most buyers, parents, or collectors.

So I'm a bit frustrated that Hasbro has done so, so preemptively. Yes, they are a business that is out to make money, yada yada, but they raised their prices at a higher rate than inflation. Which means, they raised the price of their toys so that not only are their profit margins untouched, but their profit margin is actually greatened than if they matched inflation 1:1; all at our expense. Anticipating that their sales will decline, they decided to charge us even more than necessary so that their profits remain the same. They passed down all of the increased shipping and production costs onto us buyers, so that they can fill their pockets even more than they previously have.

So yeah Hasbro, I noticed. It's really sleazy, even for a large corporation, and it unsettles me. So I'll be one of those people that are pulling back and reducing your sales over the upcoming years. More and more customers will continue to realize that you have no qualms with screwing us over so that your shareholders are satisfied, and it may come back to haunt you

Zerzar999 - 2022-02-16 @ 2:36 pm

So if they know it will "soften" sales, why would they do it? Is that what they want? That's ridiculous. True, it might benefit us adult collectors as parents might not be so quick to buy a more expensive product, but what company, in it's right mind doesn't want to reach as many people as it can young or old. This is just putting lipstick on a freaking pig. The suits are lining their own pockets and I don't think they really care if lines like ML and Joe take the fall because of it.

ransomz - 2022-02-16 @ 1:21 am

While price increases do suck, there may be a silver lining. Typically raising prices with consistent demand equals fewer sales, as Hasbro is forecasting. This means Marvel Legends won't be a volume business, or at least compared to what it was. They will be forced then to cater to the adult collector market more than they do, which means giving us stuff on our top ten lists, filling out teams, etc. I'm sure they will still crank out the major characters but they may also give us more characters that will sell well to a smaller base.

MrWolf12000 - 2022-02-15 @ 10:29 pm

Yeah the Toys R Us website price is 45 bucks for Movie Baroness clogging the shelves.

Looks like ill be importing all my GI Joe crap in the future

dk1977 - 2022-02-15 @ 9:53 pm

I plan to cherry pick even more but did anyone see the price increase hasbro did on their G.I. Joe figures in Canada? They raised the prices of G.I. Joe to around 45.00 or 35.00 American.

80sboy4 - 2022-02-15 @ 8:37 pm

Interesting read. I ultimately think the sales for all toy companies will eventually take a down ward trend as prices continue to go up. The collector market will continue to survive but think toys for kids will suffer in the coming years since there will be differing ways for parents to spend.

Interesting that Mattel didn't mention Masters of the universe, maybe there's something to the 2023 thing or MOTU just doesn't register as they're other properties do. We'll ultimately find out.

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