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Annual Doom saying Column!

by Rudy Panucci

The hobby of action figure collecting is in a serious decline.  Sales are down.  They’re down lower than initial numbers would suggest do to some clever reclassification by the toy industry.  Fewer new collectors are entering the hobby.  Kids have largely abandoned action figure play in favor of more structured activities.  Speculators have moved on to other items, like statues and maquettes.  Retailers are devoting less and less space to action figures in brick and mortar stores, and catalogs and websites that don’t cater specifically to the hobby are also turning their backs on action figures.  Many collectors have either run out of space or left the hobby due to changes in their lives: completing their collection, or just suddenly waking up one day and deciding that they don’t enjoy it anymore. 

 

The toy industry is cyclical, and I’m sure that in five years or so, we’ll see an upsurge in action figures, but there are serious indications that the hobby may have passed its peak, and future “booms” will be more subdued.   There are a number of factors contributing to this, and we’ll be looking at those, and there are also still many more really cool action figures being made today than at any other time, but they aren’t selling in the numbers that they were a decade ago, and they’re getting  to be  more expensive and harder to find. 

 

Sales Figures Of Figures

 

According to NPD, the retail tracking organization, sales of action figures have dropped between four and twelve percent in each of the last ten years.   That’s bad enough, adding up to almost a forty percent decline over the last decade,  It’s actually worse when you consider that NPD changed the criteria for the category in 2001, so that “action figures” now includes boy’s role-playing toys like Spider-man web-shooters and Hulk hands as well as toy guns and voice-changing devices.  You may have noticed that year-round displays of what used to be considered Halloween costumes have taken up residence in some store’s action figure aisles.

 

There are many factors responsible for the decline of action figures sales.  Much of the blame has to be directed towards children, who simply grow out of toys at an earlier age than they used to.   There’s little that can be done about that.   I think that the accelerated development of children may be directly related to the growing number of adult collectors, so there is a small amount of recovery there, but that’s a topic for another column.   There are other factors at work here, some that the toy industry could address and some that are beyond their control. 

 

Factors that are beyond the toy industry’s control are the economy, changes in childhood development, rising prices of raw materials, retailer resistance, and collector fatigue.   Regardless of what the stock market is doing, the economy is in the toilet for most parents with young children.  There is not as much disposable income to spend on toys. There’s also the fact that kids have less spare time now than they used to back in the old days.  The average kid has much more homework and modern parents are scheduling their kid’s time in blocks of organized activities that don’t leave much of the play time that action figures fill up so well.   On top of that, fast food premiums have replaced  action figures as the quick “shut-em-up” purchase based on hot kid’s properties.  Why would a parent bother making a trip to the store to drop ten bucks on an action figure based on a cartoon or movie, when they can get one for free with food at the drive-thru.  And in many cases, the Happy Meal toy has a better paint job than the figures in stores. 

 

The price of petroleum has been rising steadily for some time, and this year saw record highs for the cost of a barrel of crude oil.  Those costs are being passed on to consumers, and higher-priced figures are a harder sell to cash-strapped parents.   Ironically, it’s not just the cost of the oil that goes into the actual toy that’s causing prices to rise.  It’s also the cost shipping the items from China that’s making things so costly.   Look for figures in mass-market stores to weigh less next year, as toy makers try to cut shipping costs by using more hollow pieces and leaving out some accessories in a bid to reduce shipping charges. 

 

There are a few action figure lines that kids are still buying.  Power Rangers and Star Wars are still strong, but are selling less than they were a few years ago.  GI Joe Sigma Six is doing well with kids, as are toys based on hit cartoons like Naruto and Avatar.  However, the best-selling action figure line today would not be in the top five with their current sales in 2001.

 

NPD’s numbers are not a true reflection of the complete hobby, since they only track mainstream mass-market retailers.  Toy companies that have managed to bypass that system, like Sideshow Collectibles, are thriving, but no longer count in NPD’s sales reports.  What NPD tells us is that kids are buying far fewer action figures than they used to.  That’s a huge problem, but it isn’t the main issue facing adult toy collectors. 

 

Toys For Grownups

 

There are some promising developments in the area of collectible action figures for adults, but that too is a shrinking market. There was always a sizable contingent of adult action figure collectors who never opened their figures and just used them for display pieces.   That segment of collectors has moved on to collectible statues because they care more about the way a figure looks on the shelf than they do about its articulation.   It makes sense that they would be attracted to statues and maquettes. 

 

However, there are several cases where toy companies are making some innovative moves that could save the hobby.  All is not lost.

 

Hasbro is teaming up with young-skewing retailer Hot Topic to bring us a new Adventure Team GI Joe with Kung Fu Grip.  The price is right, at fifteen bucks, and the retailer is a very willing partner who will place much more importance on this item than a mass-market discount chain would.   This could lead to more collaborations in the future.

 

Sideshow Collectibles has created a vibrant collecting community by withdrawing from the riskier world of mass-merchants and focusing on their own website and more eager retail partners in the hobby and specialty market.  With a strong network of reviewers and commentators and even a production blog and podcasts, they have developed a model for communication between a collectible toy company and it’s fans. Their strong portfolio of licensed properties and their move into the area of statues and maquettes has made them one of the most durable collectible toy companies around. 

 

Smaller companies like SOTA are struggling to survive by adapting some of  Sideshow’s methods, and reducing the number of toys they produce in favor of delivering quality.  We are due for a major shake-out among the smaller toy makers because of the bankruptcy of Tower Records and setbacks at many other retailers who carried action figures as a sideline.

 

Modeler’s Loft has done well in the US with the way they very smartly handled their Action Man 40th Anniversary line.  By choosing only one retailer to handle North American distribution they insured that there wouldn’t be a glut of AM40 sets flooding the market at low prices.  This has allowed them to sell their sets for twice as much as Hasbro sold their comparable sets at mass merchants.  And their choice of a retail partner, Cotswold Collectibles, can’t be beat for customer service, so they don’t have to worry about unsatisfied customers souring on the whole line.   I have my doubts that they can continue to produce sets at the rate they are now without hitting a point of diminishing returns, but I would be happy to be proven wrong. 

 

The Point Of All This

 

What this column is saying is that the hobby of action figure collecting has changed dramatically over the last decade, and more changes are on the way.   There is a potential crisis facing the action segment of the toy industry.  Much like comic books fell from grace with children two decades ago, action figures are at risk of losing their status as kid’s toys and could be viewed simply as something nerdy adults buy.  This could happen in the next twenty years unless the toy industry comes up with a series of hot action figures.  There’s not really a lot we can do about this.  Those of us with children can encourage more imaginative action figure play, but the vast majority of parents are leaning away from that, and the vast majority of kids are growing up thinking of video games as the best way to pass their time.  All we can do is keep buying what we like, and try to share the hobby as much as possible without seeming creepy. 

 

The new year could see a rebound, as Hasbro takes over the Marvel Comics license, and things settle down after this year’s retail shake-out.  All we can do is pop the popcorn, sit back, and watch the action figure aisle in 2007.