Hasbro CEO Brian Goldner Admits Rise Of Cobra Toys Were Overpriced And Speaks On The Future

Source: Hasbro, Inc. Q4 2009 Earnings Call Transcript -- Seeking Alpha

The total brand performance of Transformers, G.I. Joe, and Nerf delivered double digit growth in 2009 across multiple product categories. Transformers had a record year posting $592 million in revenues, a 23% increase from our last movie year in 2007. G.I. Joe recorded revenue in excess of $125 million and Nerf continued its growth, increasing 25% driven by continued growth in the US and the expansion of the brand internationally. Play-Doh and Tonka also turned in double digit growth, both growing approximately 25% in 2009. Littlest Pet Shop, our largest girl’s brand also grew in 2009.

We are working on Transformers animation and would certainly see some Transformers both the opportunity for the classic Transformers as well as some new Transformers episodes to get out some time this year. I will tell you we’re also working on G.I. Joe the second movie and looking at animation whether that’s for late ’10 or ’11, we’ll make some decisions on that. Transformers 3 as a motion picture we’re well underway and working on a script, working with Michael Bay and Paramount.

Hayley Wolff - Rochdale Securities

Can you give us the split of international versus US for Transformers and G.I. Joe? With Transformers how it compared to ’07?

Brian Goldner

I don’t know that I have those splits in front of me but typically our product lines are about 60/40 domestic to international. Transformers are probably right along those lines. G.I. Joe a little more weighted towards the US probably 70/30, although the box office was more even.

Hayley Wolff - Rochdale Securities

Follow on appetite for G.I. Joe in the international markets given the success in the box office?

Brian Goldner

I think one of the big mistakes we made on G.I. Joe was really just in the price point. It really had less to do with the enjoyment of property. In fact if you look at the DVD sales they were quite strong and property performed really well. At the lower price points G.I. Joe has performed very well, in fact we shipped G.I. Joe product in the fourth quarter and feel very good about, we did some research with consumers and see great consumer appetite for the brand.

We’ve begun work on the second film as well as looking at television. For us it was more a matter of probably ignoring some of the price point challenges that are out there from a consumer spending standpoint as we developed the line 18 months ahead of the movie launch.


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Interesting stuff. Hopefully this means they're aiming more for the $5 pricepoint next go.

Wow, no sh!t, Sherlock! Hasbro execs really needed a market performance report to tell them they were too much?

Yeah, 5 bucks would be good. But I don't know if that means less accessories now or what. The oversized missile launchers were a big mistake

Considering that Marvel Universe and Star Wars both sell just fine for them at $8? Yes. It's not as obvious as you'd have it seem. The problem is that Joe as a property isn't strong enough to support that price, while others are.

^^^^^

Marvel, Transformers, and Star Wars has a much bigger collector's market (and with all the movies and TV shows and whatnot, a bigger kids market too). So yeah, I'd say at the very least the product was overpriced given it's relative popularity to other franchises. If the sequal and new animated series does well, then yeah, we might see it able to hold its own with the big-boys.

This could mean they're going to keep the price relatively low, but as a result, they'll use cheaper plastics and the figs will have shoddy paint jobs.
Or most of the figures here on out could just be a bunch of frankenjoes & repaints.
Or I coul be totally full of s***.

$5 is a good price for us.

I never quite understood, or maybe its related to the Takara partnership, but Transformers seem so much more reasonably priced considering the amount of parts involved. The deluxes have gone up a little, and may have possible shrank some, but they've remained pretty close to $10 since Beast Wars.

Are there pieces of endangered animals being put into the regular style action figures?

He's certainly right, and it is good to hear it from the horse's mouth, or whatever you called it.

I think Marvel prices are the worst, but with a smaller release and broader collector base, the price isn't as crippling. Same with Star Wars, and its gotten pretty appealing to kids lately. Just assuming your film was going to drive parents and kids to immediately pay so much was a bit ridiculous.

So it takes a CEO to state the obvious.

That's why he gets the big bucks.

Wheels that don't roll were a big mistake too! Can't leave that one out.

And that giant RV thing........and........and..........

Hasbro has always told us that Star Wars figures are $8 a pop mainly due to the cost of the license fee. Who did they have to license Joe from, since they were trying to get almost the same price on Joes as SW? Oh, thats right, Joe has been an internal Hasbro brand since day one.

+-MWG-+

I don't think the $8 price for Star Wars figures has all that much to do with the license. Sideshow used to make the same claim and still sell other characters at the same or higher price.

GREED! It's faaaaaaaantastic!!!!

I think $5 may be too much to hope for, but otherwise you took the words right out of my mouth.

Still not sure why EVERY figure had to come with a dumb big-ass rocket launcher. No doubt that put the price up a bit, considering that Hasbro will cheap out by not including a small handgun, knife and/or figure stand with a vehicle driver to save $$$.

... Course, maybe them not being nearly as cool looking as RAH had something to do with it as well... Uh-oh, did I just go there??? Don't hate me, I liked the movie and bought the RoC figures!!!

They were. With petroleum costs oft blamed for the rising cost of toys, one would think those missle launchers would be left out and the petroleum used to make them saved for something else that will sell more.

Those huge missle launchers were ONLY good for use as hand held weapons for Transformers to use.

Or mounted on vehicles. I stuck two on the Avatar AMP suit and it looks pretty badass.

I suspect it's due to the partnership with TakaraTomy. Hasbro does the character design work, while TakaraTomy does the engineering, so it's a 50/50 working ratio, and costs divied up too. Whereas with G.I. Joe, Hasbro does all of the work on it's own.

Hell I'm surprised he even admitted to it.

at least they realize there was a problem
so we are lucky in that respect but it doesn't help our wallets at this point

For some reason, I doubt we'll see a lowered price anytime soon. Cheapest was just for the Holiday.

i absolutely will not pay 8.00 for any 3.75 piece of plastic at retail unless it is thee most bad ass figure

think ive bought maybe 3 starwars in a year and a half because the price point is BULLSHIT. greedy is all they are.

PS that marvel junk is some sorry ass scultping and articulation w thee worst accessories ever....frank castle, nuff said.

you think someone would at hasblow would notice how 25th flew out the shelves and how little the peg warmers really were compared to now

They admit it now, after people been spending their hard earned money.

After reading the comment about GI Joe toy price by Brian Goldner, I fell off my seat WOW these guy finally realized it is way too overprice. What is the profit margin on one figure? probably 1000%

man and that guy makes a butt load of cash just to tell them that lol. this and 90% of the toys from roc sucked. hell i could of told them for free that the price was bad.
god now they need to step up to make things right lets pray at toy fair we see some killer stuff. if not kill the line off for good.

well said...i've been preaching this for the past year and FINALLY THE BIG BOSS MAN ( HASBRO EXEC.) SPEAKS THE TRUTH!!!!

Greed is not good you bum bunch of goofs!!!

He said the price point was the problem not that the stuff you see on the shelf now is overpriced. To me that means two different things.

Like others have said, If they do lower the price in the future then the quality or accessories will also be less.

Now what really is the truth? Who knows.

Hopefully they keep their collective heads out of their asses at Hasbro.

I could understand a markup from the original $4.88 at Wal-Mart that we saw in 2007, but not to $7.88 or whatever it was.

what she said.

Hasbro has been wallet raping us for years. Joes, SW, Marvel Universe, and Transformers are all overpriced IMHO.

JOE, SW, and Marvel U figures should not be above $5....ever.

Honestly, I don't think they were talking about the figures at all.. he said it performed quite well at the lower price points.. I think he is talking about the Vehicles.

the biggest thing with Joe was the utterly insane skyrocket from the year prior. they can blame oil, but oil went down bigtime @ the end of 08. that doesn't justify essentially doubling the price of Alpha vehicles and almost doubling Bravo vehicles. every pricepoint in the ROC line was basically 20-25% too much except maybe the Target deluxe figs.
Transformers are not overpriced. seriously. the amount of engineering in them is INSANE compared to SW or GIJoe @ the same pricepoint.

and the $5 pricepoint is a thing of the past ~ the articulation/Engineering and accessories have just moved beyond it. BUT. $8 is friggin' rediculous. $6 for joe, $7 for licensed i can accept.

I don't collect Star Wars, so this might not be true.

But Hasbro doesn't have to design characters and vehicles for this line. Aren't all the designs already done by Lucas and Hasbro just makes the translation to toys?

Who designs and creates these GI Joe figures and vehicles? Someone has to be paid to think this stuff up. Right?

Hasbro still has to translate the designs into working toys ~ it lowers the concept work, but not that much of the overall budget...

Comparing the 25th & Movieline as far as quantities is an unfair advantage. 25th line at it's high point had 6-8 pegs not a 4' section like ROC did. And I remember the 25th/ME warming pegs; 86 Roadblock, Will Bill, Cobra Flint, Buzzer and this was when they were still under $6.00

"he said it performed quite well at the lower price point" could go either way. Lower as in less than $6.00 during the 25th/ME lineup, of course the ARAH were selling better. Classic designs we wanted with better detail and better articulation with classic package to top it off. As for ROC's lower price point, it's called clearance. Clearance is never a good sign, retailers might worry about ordering Joe again.

Come on, let's be realistic. Prices go up.

A bunch of people here are already sounding like our grandparents, complaining because comics used to be five cents, and buying a new house was $5,000.

At some point you gotta get with the times, and either pay up or shut up (don't mean to be rude - that's just the saying). If you're not willing to pay more than $5.00 a figure, how can you even be in this hobby?

On a side note, check out this website for an idea of how prices have gone up, it's actually pretty interesting!

EDIT: Oops, forgot to put up the link! http://www.thepeoplehistory.com

AMEN BROTHER!!! Finally a 'Tanker' who's not stuck in 1985

Glad to know I'm not the only one!

Problem is Wages haven't gone up in 25 years. But Prices do. That's the real problem. If Wages kept up with inflation we wouldn't be complaining.

Where does that site get its numbers for the Average Income? I think they seem quite high. I don't even know anyone today making $40 grand a year, much less in 1999.

All this boils down to is the movie was a good popcorn flick for those who wanted a kick out of it and could stomach it. It also means that those huge droves of new fans to buy the toys never materialized even at the $5.00 mark. It was mostly customizers and fans of ROC as a universe that account for any of those sales and espeically at the $5.00 mark or lower. It was more then just a high price it also has to do with over saturation and over promising retailers on the intial waves. That saturation curtailed the sales for a long long time and still impacting it as I am still seeing tons of wave 1 and 2 being put out to this day.

Hopefully they will do the market research Joe deserves before they decide to shit can it again.

A serious new vision is in order. I suggest they talk to the designers of Resolute, they have what it takes if given a greater opportunity to show us the goods.

Thing I initially liked about the ROC figures was their somewhat less cartoonish looks, but this quickly faded once Hasbro returned to their usual antics.

yes but roc has waves of figs sitting there 25th didnt also 25th line was out for 2yrs unlike roc for 6+mos and has more sitting around and has had so many price cuts and still they sit.

roc failed more then just cuse of price. to many of the same charters in the line. i was at walmart today and i heard a kid say "hey mom there is bumble bee and she said you have one thats enough to have of him". then at the other end where joe is a kid said "mom no i have a SE i dont need another one. these have been out for awhile now i want something new". the kids where about 5yrs old. so one kid smart the other mom smart. this means ppl are getting sick of the same old charters in the line the kids even want new.

Except ROC didn't fail.

And you're crazy if you think 25th didn't have waves of peg warmers. The last two waves aside, which I STILL see on pegs, after the initial frenzy we had a glut of the figures on pegs.

That was totally due to another one of hasbros follys REVISION cases in droves that were demanded by retailers due to the line doing so well....the intial waves of the 25th is left limited in scope never stayed on the shelf for long. Its liek wave 10 and why your finding it at TJMAXX cause once again retaielrs cant understand what a WAVE is and they always miss products. The release of the inital foiled 25ths was nice if you missed out on them too, they just made too many just like they did with ROC. However ROC still did not sell like the 25th did and I am sure we will see ROC figures for years to come more so then 25th ME stuff.

Part of his statement you missed.

See that's the thing. I loved Resolute, and the fact that they managed to make the old school designs more edgy. I could have really gotten into that. Then the movie came along, and I actually liked some of the RoC designs as they managed to make the updates actually look like they could possibly be real world figures.

Then it seemed like they ran out of ideas. All of a sudden we started getting repaints of all the crap figures I thankfully missed from the 90's. All the halfassed, retarded Star Wars looking Vipers, no freakin' thanks! If you wanted to sell me old school figures jst make an ARAH movie and keep the 25th line rolling with the good 80's figures. If you want to stick with Resolute, fine, I dig it and keep it coming. You want to put out a kind of half assed movie, but with some cool reboots and solid modern figures? Cool, I'm down. However, don't bait and switch us with the "new Joe", then give us the same old crap, and charge us double for it. Why even bother with RoC? My kid loves the ARAH Joes, I'm pretty sure that movie would have done alot better.

I hope Hasbro doesn't compromise the quality of the figures in order to hit a lower price point. Also, acknowledgement that pricepoint was the problem makes it unlikely that we'll see large vehicles/playsets in the near future.

Well, I guess it just depends on your perspective. I would say most by far of the people I know make well over 40,000. Wages have certainly gone up in many areas, others, not so much. At any rate, I can't speak to the research done on that site, I just thought it was interesting.

You know, CG101, I usually can't stand the negativity in your posts, but I think you're right on the ball here...

I managed to make $40 grand for one year, actually half of two different years, but then the Layoffs hit and I've been unemployed since.

However, I live in Florida, the Median income in Florida for 3 people is $56,000