Global Toy News

Retailers Against a Border Tax

Last week I wrote an article entitled: "A Border Tax; Not Good for the Toy Industry." It was in reaction to a proposal to establish a 20% tax on imports. In that article I wrote: "In a sense, it would be children who would pay the price in toys that cost more and do less."

Fortunately some big retailers are concerned as well. A group of 120 retailers and trade associations, calling itself "Americans for Affordable Products" has come together to fight the tax. Here is what their website states as their mission: "The Americans for Affordable Products" is a coalition of job creators, entrepreneurs, and business leaders united against higher prices on everyday necessities." Are toys a necessity; they are if you're a child?

If you want to consider the impact of such a tax, think about Dollar Tree or 99¢ Only Stores. How can their business models sustain a 20% increase in taxes? Oddly, neither is on the list of supporters. 

Congratulations to Learning Resources for taking a stand. It would be great to see more toy retailers do the same.

Walmart

Walgreens

Target

Sears Holdings

Dollar General

Best Buy

Kohl's

Jo-Ann Stores

Learning Resources

Macy's

Meijer

Michael's

QVC

Rite Aid

Ross Stores

For the full list, click here.

ALERT: Changes In Tax Code Could Negatively Effect Toy Companies

The game could be changing for those who manufacture outside of the U.S. According to an article in the Wall Street Journal, and republished in Morningstar, by Paul Ziobro and Richard Rubin, "Toy Makers Gird for Tax-Code Change": "A proposal to apply a border adjustment to the U.S. corporate tax would strip toy makers of the ability to deduct the cost of imported goods from their profits, potentially forcing major price increases."

Here is how Mr. Ziobro and Mr. Rubin explain the new tax scheme:

If a company imports $1 million of foreign-made toys, spends $500,000 on domestic costs and sells the products for $2 million, it would only be able to deduct the $500,000 in local costs under the proposal. Thus, it would pay taxes -- at the proposed lower corporate tax rate of 20% -- on $1.5 million. A similarly situated company now would deduct all the costs and pay 35% in taxes on just the $500,000.

Why is this happening? Because Congress is feeling the heat to keep jobs in the U.S. According to the article, the toy industry is particularly vulnerable because it generates the majority of its revenue in the U.S. while making little or none of its products domestically. This is of course not new. The industry has always produced in low cost of labour countries. In the case of China, the massive and interconnected toy industry infrastructure in that country makes it hard to imagine manufacturing anywhere else.

Brexit's Impact on the UK Toy Industry; A British Perspective

Andrew Dobbie is the highly respected founder and Managing Director of Gameplan Europe Ltd. Based in the UK, Gameplan Europe provides consulting services, executive search, distribution and publishing to its clients. I asked Andrew to provide us with his personal take on the UK's recent decision to leave the European Union (Brexit). Here are this thoughts:

The value of the pound has dropped 11% against the US$ since the day of the referendum result.  That means an 11% hike in prices if margin percentages are to be maintained, because most toys from the Far East are invoiced in US$. Clearly  most manufacturers cannot raise prices immediately because of printed prices in catalogs etc, and even if prices are raised that much, volumes are bound to fall and the profile of consumer demand  will move towards cheaper toys in a range .

In the meantime Britain is a divided nation (or even more so than normal) with bitter recriminations being thrown about, leavened with spicy adjectives to describe the opposing side of which 'pondlife' is a mild example. One of the problems is that there was a strong demographic split in the voting.  Younger people and higher socio-economic groups voted primarily 'remain', and older people and lower socio-economic groups 'exit'.  This is  a toxic scenario with young people asserting that old folks who will soon be dead have dealt a blow to the economic future of those who still have a full life ahead of them.

The proponents of Brexit asserted that once the UK economy was unshackled from the dead hand of the anti-business bureaucrats in Brussels sucking the life blood out of entrepreneurs like vampires (this is not my florid take on the issue!) then the economy would bound upwards towards the sunny uplands of the new tiger economy Great Britain. Well we can all have our dreams. 

Slave Made Toys; A Modern Problem

There is certainly a very nasty irony attached to the notion that products designed for play are made by forced, unpaid labor

I, as you, are used to thinking of slavery in an historic or Biblical context. Slavery was ended in the United States in 1865. Brazil held out until 1888, making it the last western country to do so. 

It therefore seems odd that I am, today, writing about slavery as a contemporary problem. I guess I should not be surprised. Pirates are back as are modern versions of medieval torture and death. 

Still, I was startled to see an article on Made-in-China.com entitled: "Is Your Toy Supply Chain Ready for The Modern Day Slavery Act?" Written by Mark Robertson, Director of Communications and Stakeholder Relations for ICTI Care, the article states that there are 21 million enslaved people in the world. That's more people than live in the state of New York. 

Robertson informs us that the UK has a new law on the books that states that :

Any UK-based toy company or international toy company with a business presence in the UK, and which has a global turnover of more than £36 million per year, will be required to report annually on the steps it has taken to identify and address the risks of forced labor and trafficking in its workforce, its supply chain and the workforces of its business partners and contractors.

Part 2: A Look At the Future; What to Expect Over the Next 10 years

In my last article, I wrote about a futurist report by the firm, A.T. Kearney entitled "Is Your Luck Running Out? Managing Supply Risk in Uncertain Times."  Despite the rather ominous title, the study anticipates some interesting, disruptive and in some cases positive possible outcomes. I went through the report and looked for potential consequences that could have a direct impact on the toy and play industry. Here is what I found:

Fight for top-tier manufacturers

The report references the International Monetary Fund as forecasting that  "...Brazil, Russia, India, Indonesia, and China (BRIIC) will be among the 10 largest global economies by 2020, ahead of the United Kingdom and France..." That means that there will be an increased demand for what the report describes as "top-tier suppliers." In this scenario, the traditional toy industry with its generally lower priced products could find itself in a fight for suppliers.

A strong U.S. economy

The Kearney study states that ".... The U.S. economy is projected to continue to grow at an annual rate of more than 2 percent through 2020." That means a stronger dollar which will have a negative impact on exports but will reduce the cost of imports. The western toy industries are primarily import driven due to the amount of product produced in Asia. That scenario is a plus for the toy industry.

New markets

"Chile, China, Malaysia, Mexico, Peru, Philippines, and Poland" are chosen by the report to be growing consumer markets. This could be a nice opportunity for growth if the toy and play industry seeks opportunities in these new markets.

Part 1: A Look At the Future; What to Expect Over the Next 10 Years

Those who work in the toy and play industry have to keep their eye on the world and its future. That was why I want to recommend an important new report from global consulting firm, A.T. Kearney. The article is ominously entitled, "Is Your Luck Running Out? Managing Supply Risk in Uncertain Times," and it should be mandatory reading for any industry that manufactures as much of its product off shore as the toy and play industry.

The article lists 12 trends that could have an impact on global business in the coming years. It contains an extensive explanation of each so I suggest that, if you have time, you read the article rather than depending upon my summary. In my next article, I am going to focus on those issues in the report that would appear to impact the toy economy in particular. 

• Geopolitical Realignment (U.S., China and Russia compete for power and resuorces)
• Terrorism (Its not going away anytime soon)
• U.S. Economic Resurgence (A robust U.S. dollar means lower costs for imports)
• The "20-20 Seven" Growth Economies (the 7 economies set to be robust in 2020)
• A New Resource Slump Cycle (The reduced cost of natural resources like oil will continue to stay low through 2020).
• Accelerating Global Climate Change (Whether it is the costs from flooding or availaility of new sealanes in the Arctic, climate changes is going to cause havoc).
• Depopulation Waves (Labor shortages due to a decline in the global birth rate)

7.4 Billion Unique Consumers; The End of the "Categorized" Shopper

The United States, and the world have since World War II, experienced a liberation of the individual. Categories like "normal", "conventional" and even "average" have given way to terms like "normative", "fluid" and "identity". Gender is no longer necessarily binary; race is ambiguous and religion is "syncretized" (meaning being mixed). 

Retailing, advertising and marketing have long depended upon an ability to sort large groups of people into categories. The bigger the group, the easier it seemed. Now, how do retailers function In a world in which the individual defies such simple categorization? Where consumers don't see or want to be seen as belonging to a group? When individuals choose to bypass a gender distinction or refuse to be placed in a racial category? 

Toys R Us Grows in China; A Very Smart move

Early this week Toys R Us, (see: "Jacqueline Vong is there for opening of 100th Chinese Toys R Us Store") proudly trumpeted the opening of its 100th Chinese Toys R Us store.  And that is just the beginning, they plan 30 more for 2016.

I think it is brilliant timing and I will tell you why in the next paragraph.  I have to admit, however, that not everyone agrees with me.  Doug Young, a writer for Forbes, said what was on his mind in this headline: "Toys 'R' Us China Toy Story -- Real, or IPO Hype?".  Mr. Young opens with this statement: "Bottom line: Toys “R” Us’ big China expansion plan contrasts with pull-backs and departures for many major western retailers in the tough market, and could be aimed at generating buzz in the run-up to a potential IPO."

In my opinion, Doug Young is completely off base.  Yes, some chains may be pulling back or out but Toys R Us sells toys and China is about to be hit with one of the biggest baby booms in history.  At the end of December, 2015, China announced it was changing its one child policy to allow two per family.  China has, for the last 35 years, limited families to one child per household.  Now, with that figure doubling, we can anticipate that some families with one child will go back for a second and families yet to give birth will think in terms of two children.  That's going to mean a lot of babies.

So, Toys R Us is in the right place at the right time to take advantage of a baby and then child population hungry for toys and all things baby.  Good move Toys R Us.

 

Top Toy and Play News Stories of 2015; A Look Back (6-10)

In my last posting, I listed 1-5 of the top toy and play industry news stories of 2015.  In this posting, I cover 6-10.  They are in no particular order but reflect what were, I believe, to be stories that had an impact on those of us who work in the field of play.  Let us know if you feel I missed anything.

6. China Ends One Child Policy

China has for several decades pursued a "One Child Policy" that, as the name implied, limited families to one child.  Last month, China ended that policy and families can now have two children.  This is going to mean an explosion in that country's child population as those who currently have one child can add another while new family units can begin the building their two child families.  This is going to make China the place to be for those who want to sell toys for a constantly building population of Chinese babies and children.  

7.   A Changing of the Guard at Mattel

The Brian Stockton era came to an end at Mattel at the first of this year.  Stockton was replaced by Chris Sinclair, first as transitional and then as permanent CEO.   In addition, Richard Dickson was moved from Chief Brands Officer to COO.  Is it working; it seems it is?  Mattel's stock price has risen by 35% since October 2nd and sales of Barbie and other Mattel products were reported to be selling well this holiday season.  

8.   Major Retailers End Gender Signage

Amazon,Target and Toys R Us announced they were moving to gender neutral signage. Not everybody likes it; here is how Franklin Graham responded on Facebook:  "What’s next? Are they going to try to make people believe that pink or blue baby showers are politically incorrect? I have news for them and for everyone else—God created two different genders. Jesus said, “Have you not read that He who created them from the beginning made them male and female (Matthew 19:4)."'  I guess we could deduce that from the Reverend Graham's comments that God cares about toys...deeply.  Many were, however, happy with the decision which The Washington Post called "a major cultural shift."

9.   Star Wars Is Back

Many of us can still remember that incredible December in 1977 when Star Wars took the country by storm. Kenner understandably under estimated the potential for the brand and ran out of action figures going into the Christmas season.  What did they do; they sold empty boxes filled only with promissory certificates? Those who were children are parents in 2015 and they and their kids are making "Star Wars: The Force Awakens" a juggernaut that is bringing consumers and their dollars into the toy department.  

10. Toy Industry Associtation Has a New President

The toy industry said goodbye to Carter Keithley and hello to new President Steve Pasierb.  Carter was a steadying influence as the toy industry dealt with the loss of the Toy Building; rapidly changing technology and the Great Recession.  Steve is overseeing a toy industry that is growing and beginning to adapt to the 21st century child.  We extned Steve our best wishes in leading an industry that never ceases to surprise.

Top Toy and Play News Stories of 2015; A Look Back (1-5)

Below is 1-5 of a list of the top 10 toy and play industry toy stories of 2015.  I have not listed them in any particular order because different events will have more or less meaning depending upon one's point of view If you think I have missed one, let us know.

1.    "Hello Barbie" Makes the Cover of The New York Times Magazine

If making the cover of The New York Times Magazine makes it a big story then Mattel certainly rang the bell this year with the launch of "Hello Barbie," an intelligent, emotive robot.  The article expressed worry about the future of our children but the world and the republic will survive this new doll that prepares children to live in a not so distant future that includes personal robots.

2.    Mattel Ends "Disney Princesses" Reign; Hasbro Takes the Crown

Mattel and Hasbro made the cover of Bloomberg Businessweek magazine with the cover story, "My Heart Belongs to Hasbro." The article analyzed how Hasbro's was able to pry the Disney Princesses away from Mattel.

3.    FAO Schwarz Closes Its Doors

FAO Schwarz is the template for the optimistic toy industry executive. You had to be optimistic if not foolish to open your store in 1862.  The Civil War was raging and a divided Baltimore had just undergone violent riots by Confederate sympathizers.  Even then, parents would buy toys during tough times and the retailer prospered, opening additional stores in Philadelphia and Boston and in 1870, lNew York.  The company became a powerful memory for countless adults as FAO Schwarz became the ultimate toy experience in the United States.  Alas, New York City's skyrocketing rents finally managed to do what two World Wars and the Depression could not; close the company's doors.  Sad for children, adults and an entire industry.  

Star Wars, Toys and Gender; Social vs. Economic Good

When does a perceived social responsibility trump a business’ need to be profitable? Do some perceived social responsibilities outweigh others?

These were some of the thoughts that have been going through my mind this week. They arose from a dustup on the social networks over the absence of Rey, a major female Star Wars character, from Hasbro’s 6-pack action figure sets.

Critics using the Twitter hash tag #wheresrey see a pattern in the company’s actions noting that the company had previously left Black Widow out of the Avengers and Gamora out of the Guardians of the Universe sets.

Hasbro and any company, for that matter,  has a challenge in making the best decisions for stakeholders. After all, if doing a social good always equated to doing a financial good we would not be discussing this issue. But the two clearly do not always equate, hence the dilemma.

It is neither a new nor a simple challenge. The question of social responsibility for business has intrigued philosophers from Plato to Peter Drucker and Milton Friedman.

In fact, business philosophers have long maintained that the ultimate social responsibility of any company is to stay in business. Why, because staying in business maintains jobs and those who have jobs can contribute to family and society.

Neither the critics nor I or you (okay, maybe you) really know how Hasbro decides what does or does not go in a play set. So, let’s view this in the larger context of all business. Here are some questions I am asking myself, some philosophical, some practical and all hypothetical. I would be very interested in hearing your thoughts:

1. What is the ultimate responsibility of any business, social or otherwise?
2. How do we weigh social responsibilities? Do some have more value than others and if so how do we measure them?
3. Does a social good trump a financial good in all cases? What if the social good causes financial pain?
4. Do companies that engage with children have a greater responsibility than other forms of business?
5. Does business have an inherent interest in including the social good as  part of the marketing discussion?
6. Do individuals have a responsibility to speak out to management about their beliefs and does management have a benefit in encouraging such a dialogue?
7. Do we have a business responsibility to look for a way to turn a social good into an economic one?

Hypocrisy in NGOland; PIRG Must Do a Better Job

One of the local Chicago stations has been running an ad about their exclusive look at the PIRG's  2015  "Trouble In Toyland" report.  PIRG is an NGO that annually posts a list of "dangerous" toys. The ad was obviously designed to scare viewers by announcing that the station would reveal the use of dangerous chemicals in toys.  

It made me angry but not surprised.  This is the time of year when PIRG and other NGO's raise money for their organizations by frightening consumers about toy safety.  I only wish that station would have asked PIRG why, if they discovered these "problems" last April,were they just exposing them now?  Isn't withholding that kind of information a bit reckless?

I have written in the past that the toy industry needs to challenge organizations like PIRG to provide detail on their testing and tester qualifications.  In other words, expect from them what they expect from us. Fortunately, The Toy Industry Association  sees it the same way and did all of us a service by analyzing last year's Trouble In Toyland report.  The TIA response was a powerful one.  Here is a graphic that was used:

PIRG was obviously stung by the TIA's analysis so they fired back.  Their response was written by Dev Gowda, the Public Health Advocate for PIRG.  I found Mr. Gowda's response,   "Industry Tries to Toy with Our Toy Report,"  to be disingenuous and deceptive.

To illustrate my point, here are a list of the Toy Industry report's charges and Mr. Gowda's responses as laid out in his article.  My comments follow (All italicized words are quoted from Mr. Gowda's article)::

1.  Toy Industry Association charge:
"Nearly 85% of the products named in PIRG's report were tested at a lab that is not accredited by the Consumer Product Safety Commission to do that testing, seriously calling into question the validity of their methods and results."

U.S. PIRG response:
We used a Consumer Product Safety Commission (CPSC)-accredited lab, STAT Corporation, for 100% of the toys that were tested for toxic chemicals

I visited the STAT Corporation website and discovered that they do not claim CPSC accreditation. Here is a link to their accreditation page. In addition, I could not find anything on their website that indicates that they test toys. The reason for this is that the STAT Corporation only does two tests that apply to toys.  Bottom line, Why doesn't PIRG use an actual toy testing lab?  

2. Toy Industry Association charge:
"Many 'dangerous' toys named by PIRG...aren't even toys. Including non-toy items - like backpacks, headbands, and towels - in a toy report is disingenuous and creates confusion about the safety of compliant toys."

U.S. PIRG response:
All the products we tested were found in the children's toy section of the stores.

PIRG certainly knows that just because a store, any store, decides where to put a product says nothing about what the product is. Putting a fish in a zoo does not make the fish an animal.  In the same sense,placing a backpack or headband in the toy department does not make it a toy.  The government has differing safety standards for backpacks (school supplies), headbands (hair goods) and towels (soft goods).  In fact, the government's standards are higher for toys than any of the other categories. 

 

 

Toys As Tools of Play, War, Sport? The Growing Ambiguity of Play

Old notions of what constitutes play are giving way to a new reality in which the bright line between the purposeless and purposeful is rapidly eroding.

Peter Drucker, the business philosopher, always liked to ask:  "What business are you in?"  It's getting harder to know.

Last week The New York Times provided each reader with a cardboard virtual reality viewer (nytvr).  By doing so they were attempting to give readers with a richer experience of the news by allowing readers to engage themselves more fully in a story.   As I used the reader to immerse myself into a group of Syrian refugees I was emotionally struck by the immediacy of the experience and yet intellectually puzzled.  Didn't Google just team up with Mattel to apply VR technology to the 1950's classic toy the View-Master?  Was Virtual Reality a toy, a journalistic tool or both?

And what about this article by Dana Bartholomew, "California first: International drone racing competition buzzes North Hills."  It tell us that "Drone racing, which began in France with pilotless aircraft whizzing through the forest, migrated to the U.S. last summer and has since taken the world by storm, according to the IDRA. Founded in April, the group is now opening a chapter a month in countries from Brazil to the Kuwait, with chapters now forming from San Francisco to Miami."  IDRA, that would be the International Drone Racing Association.  So what is a Drone? Is it a toy, a hobby, a sport or a weapon? Well, of course, its all four and more.

 

And what about Mattel's "Hello Barbie"?  This talking robot that shares and senses emotion is to all appearances just a new iteration of doll play.  Is she, however, much more.  Is she only a doll or is she also a friend and confidant?  Is she the first emergence of a far more intimate relationship between human and robot?  

The Commercialization of Christmas; Its Been Going on for a Long, Long Time

Newspaper Ad - Early 20th Century

It's the Christmas selling season so we are hearing complaints about the commercial aspects of the holiday starting earlier than ever.  We are also hearing concern regarding stores being open 24 hours over the Thanksgiving holidays.   Is this a recent problem?  Well, no it is not.

First of all, lest you think that retailers were once more reserved and reluctant to commercialize momentous events to make a buck consider an ad placed just after the fall of Richmond, VA during the Civil War.  "Richmond has fallen and so have our prices! at Western Hall Clothing House."  That ran in an April, 1865 Chicago Times.  

According to an interesting article by Paul Collins in  Slate, "Christmas Season Starts Earlier Every Year!": "Like so many of our retailing habits, early shopping dates back to the late Victorians. Along with inventing cash registers, mail-order catalogues, and escalator-filled flagship stores, the Victorians also discovered the value of starting the Yuletide shopping season before Thanksgiving."  

And they weren't coy about it; not even in Salt Lake City.  Here is how an 1893 ad read:"  "This is no joke. We mean it. We will do it ... MONDAY, MONDAY, MONDAY."  Now that is intense.

Here is an ad from October 28, 1928 that read: “This may SEEM a little premature to you -- but it really is NOT -- for you do not have many days left in which to do your Christmas buying.”

China's Birth Control Policies and the Rest of Us

 
In my last posting, I wrote that the Chinese Communist Party has announced they are ending their "One-Child" policy.  The policy, that had been in force since the 1970's, restricted parents to one baby per household.  Going forward they will allow two.

The "One-Child" policy successfully blunted China's birth rate and resulted in some true benefits.  It also resulted in some unintended consequences; some of which have had an impact on those who produce products in China.

Consider these points:

• In any country,  a generation that grows up with no siblings is a very spoiled generation.  China now has  a work force that has grown up nurtured (some say spoiled) by parents and grandparents who have fewer children upon which to focus their love.  
• In addition, they are a generation that has not had to contend with the dynamics of having to deal with older or younger siblings.  Imagine a work force filled with only children.  
• Because families are smaller and more affluent, children are graduating from college and looking for white collar jobs.
• Workers are far less willing to move away from home in order to live in a factory dormitory hundreds of miles away.

Bottom line, today's Chinese young adult worker is fewer in numbers and expects more then prior generations.  Because they are fewer in numbers, have aspirations and are less willing to work, there  are fewer workers available to fill toy factories and that puts upwards pressure on wages and sometimes plays havoc with production planning.

China Ends Its "One Child" Policy; What it Means for the Toy and Play Industry

The Communist Party of China announced on Thursday that it was ending it's decades old "One Child" policy. Now, families will be able to have two children per household instead of just one. 

Changes in birth control measures would seem to be a distant concern for those of us who make products in China.  After all, what difference should it make to those of us who live in the west whether parents are restricted in how many children they can have?  Well, actually quite a bit.  

The "One Child" policy, established in the 1970's, was a bold attempt to blunt China's out of control population growth by limiting families to one child.  It has worked and population growth has largely flattened.  

Why change the law now?  The policy, as most policies do, had some unintended consequences.  One fascinating example can be found in an article by New York Times writer, Didi Kirsten Tatlow.  The article, "Not Enough Women in China? Let Men Share a Wife, an Economist Suggests," informs us that, due to the "One Child" policy, by the year 2020, China will have 30 million bachelors.   Why, because when parents having a choice between have a female or male only child, they prefer the male.  As a result the "gender imbalance that hovers around 117 boys born for every 100 girls." (The global ratio of birth is 101 boys to 100 girls).

 

Presidents Xi and Obama Make a Joint Statement; What it means for the toy and play industry

President Xi of China and President Obama held a joint press conference on Friday. Whatever is gleaned from press conferences of this nature is, for many, refracted through what the press deems to be important.  But how do the results of their meetings directly impact the toy and play industry?  Yes, reducing greenhouse gases and attempts to decrease cyber attacks are hugely important but what will have the most direct impact on how we do business?

So, I thought it would be interesting to look at what was said at the press conference through our own lens. What did they have to say that would have the biggest impact on those of us who engage in the business of play.  

Its important because China produces 86% of the world’s toys, is a major market for American movies and a growing market for western toys.  What happens in China does not stay in China but impacts the health, wealth and prosperity of the world’s merchants of play.

Below are some quotes from the press conference and my comments:

INTELLECTUAL PROPERTY

President Obama: We’ve committed ourselves to a set of principles for trade in information technologies, including protection of innovation and intellectual property.  President Xi discussed his commitment to accelerate market reforms, avoid devaluing China’s currency, and have China play a greater role in upholding the rules-based system that underpins the global economy…

We’ve agreed that neither the U.S. nor the Chinese government will conduct or knowingly support cyber-enabled theft of intellectual property,

Those who do business in China know only to well the concern that building in products in China will result in knock-offs.  That was why I was impressed by the reinforcing comments from the Xinhua News Agency, a service owned by the state of China.  The article entitled, “Xinhua Insight: Better IP protection promises bigger fortune for China-U.S. firms,” has this to say:

China's IP regime is almost brand new. Prior to 1980, when China joined the World Intellectual Property Organization (WIPO), the concept of IP was almost unknown in China and the value of IP had yet to be recognized. Only in the 1980s did the country pass its first trademark and patent laws.”  The article summarizes by stating:  “If China genuinely wants to become a center of global innovation, significant improvements in IP protection are still needed.”

It is a good thing for the toy and play industry that this issue has been addressed by both leaders, a first.  President Xi’s mention of it in his remarks plus the Xinhua article should give us hope that there will be more stringently applied legal protections.  What we will have to watch closely is what practical steps will be taken.

CURRENCY EXCHANGE RATES

President Xi:  "...there is no basis for the renminbi to have a devaluation in the long run. At present, the exchange rate between renminbi and U.S. dollars is moving toward stability."

Western companies and Chinese manufacturers desire, above all, stable currency exchange rates.  A Chinese currency that is strong in relation to the US dollar can cause the price of goods to go up and for western consumer resistance to kick in.  A weak Chinese currency can cause western goods to be out of reach of many Chinese consumers and similarly depress sales.  It can also create problems for Chinese manufacturers who suddenly find themselves to have quoted prices that are no longer financially rational.  It is therefore important for the toy and play industries that President Xi supports a stable currency.

CULTURAL AND LINGUISTIC INTEGRATION

President Xi: We have decided to make 2016 a year of tourism for China and the United States.  In the next three years, we will fund a total of 50,000 students to study in each other’s countries.  We also welcome the United States’ decision to extend the 100,000 Strong initiative from universities to elementary and secondary schools, and by 2020, 1 million American students will learn Mandarin.

President Xi inadvertently misstated the initiative from the US as it is actually called “1 Million Strong.”  President Obama called it an initiative “…to encourage 1 million American students to learn Mandarin Chinese over the next five years.” 

The World's Top 10 Happiest Countries; You'll Be Surprised

“More than 70% of people worldwide said they experienced a lot of enjoyment, smiled or laughed a lot, felt well-rested and felt treated with respect."

Gallup Global Emotions Poll

Those of us who work in the play industries have delivering happiness as one of our missions. That was why I thought you would find the results of a Gallup Global Emotions Poll to be of interest.  It is a ranking of the world’s happiest countries.  Gallup conducted 153,000 interviews with adults in 148 countries.

Who were the happiest countries.  According to Gallup: "For the first time in Gallup’s 10-year history of global tracking, all of the top 10 countries with the highest Positive Experience Index scores are in Latin America"

Highest Positive Experience Index Scores

Paraguay 89

Colombia 84

Ecuador 84

Guatemala 84

Honduras 82

Panama 82

Venezuela 82

Costa Rica 81

El Salvador 81

Nicaragua 81

What should make us all happy (irony intended) is that according to Gallup:  “More than 70% of people worldwide said they experienced a lot of enjoyment, smiled or laughed a lot, felt well-rested and felt treated with respect. Additionally, 50% of people said they learned or did something interesting the day before the interview.”  That’s despite a lot of bad economies, terrorist attacks, war and threat of war.  People are far more resilient than we think.

And what is the secret to being happy? 

 

An Interview with the Father of Fatherly; The Website for Dads

Fatherly is a website that is designed to be a resource for, well Fathers, of course.  Founded by Simon Isaacs, it provides assistance for the Millennial dad who wants some help in navigating the 21st century challenges of being a parent. I liked the idea so much that I agreed to be one of their Team of Experts.  Here is my interview with Simon:   Richard: As the father of Fatherly, can you tell us how you came to sire your child?  Was there anyone else involved in the birth process?   Simon: A few years ago, after a bit of "trying" my wife told me she was pregnant. I stared at the pregnancy test wondering what it all meant (it was early and I hadn’t had my first cup of coffee). l had a lot of questions about pregnancy, child care and successfully raising a new human being.  So when my wife signed-up for the requisite pregnancy and parenting newsletters, I did as well.  Amid the slew of welcome emails talking about "my bump," it became obvious that there are few resources focused on dads.   And yet, at the same time, data began to pour out on the massive shifts taking place at home and work and the "rise of dad" as a decision maker and caretaker.  I became obsessed with the idea of Fatherly as a response to this.  Thus,  like I do with all of my ideas…I created a PowerPoint… After meeting my now business partner, Michael Rothman, who comes with a background from the men’s media and ecommerce site, Thrillist, and working with design agency a wide range of partners, friends and advisors, we tested the concept of Fatherly as a lifestyle guide for men entering parenthood for a year.  After seeing strong results, we raised a seed round from a great group of VCs, built our team and launched our latest platform and have been growing and scaling ever since.  It’s been quite a ride. Richard: Do you have a vision for what impact Fatherly will have on the world.  After all, the more equipped parents are, no matter the gender, the better the kids they launch into the world and the better that world is for it? Simon: I spent my first 15 years working in philanthropy and helping launch nonprofit campaigns. With Fatherly, impact is definitely at the center of what we do.  By providing a  with quality lifestyle content that they actually want to read - as well as the actionable resources and community they are looking for, helping them navigate new responsibilities and take on this expanded role with confidence.  And thus, we can play a role in advancing gender equality, strengthening relationships and supporting childhood development.  We are also taking on issues such as parental leave, access to play and quality education. In addition to this, we also have a monthly Fatherly Fund - a micro-grant in which we offer $1,000 to support an inspiring parenting-related project. For example, Ryan Nelson, a former Army pilot, was a recent winner who built a wheelchair-accessible playground his daughter in his backyard. Richard: Who is the ultimate beneficiary of Fatherly, the parent or the child? Simon: Our focus is on  guys who have kids - this is an audience that consumes men's interest content but isn't getting info related to his role as a dad.  Think of them as “Playground Dads,” men who are playing a bigger role in the upbringing of their children from pregnancy on. These are guys who aren't afraid to hump their kid around in a Bjorn or hang out in a playground dominated by other moms. It is a group that fiercely abjures characterization. They are not compromising their individual identities at the altar of parenthood. Being a Father is a completely natural extension of who they are. Whether it is helping guys have conversations with their daughters about body image or choose books that will inspire their kids to be entrepreneurs and engineers, the ripple effects of what we are doing go far beyond dad - to his spouse, his children, his workplace and his community. Richard: There are multitudes of parenting magazines, books, websites and social networks aimed at Moms. Can you tell us where Fatherly has commonality with those media and differentiation?   Simon: At last count, there is roughly 4.2 million mom-blogs and parenting sites, books and networks tend to be focused on the needs and experiences of moms.  We’ve learned a lot from these sources and are working with many of them.  The largest point of differentiation is our focus is 100% on the needs of the dad and focus on areas where men play an active role in the family decision making as well as men’s lifestyle topics filtered through the prism of fatherhood.   We also have a heavy focus on experts and thought leaders from the Secretary of Education giving tips about pre-K and the nursery school admissions process, a Navy SEAL giving tips on how to dominate hide n' seek, Malala's dad on how to raise a Nobel Peace Prize winner. Richard: Women go through such a physical process in bringing a child into the world that there journey is visible to us.  What is the journey like for men and can we see it if we look hard enough?   Simon: The journey for men is starting to be quite visible (though physically it pales in comparison). Men are starting to be are involved in most every aspect.  They are in the delivery room (and as a result, a child is first on Facebook within 57 minutes of birth), they are taking paternity leave.  52% of men are now the primary grocery shopper.  And at home, they are sharing in cooking, cleaning, reading, toy shopping, scheduling play dates and activities.  Fatherly is lifestyle guide for guys to get content and valuable information on these and other new areas that he is engaged in, that he can actually relate to. Richard: At Fatherly, when you review toys, are you looking for toys as a solitary pursuit for dads and kids or for together play?

 

Do You Live in a Playful City?

Our friends at KaBOOM have spent the last almost 20 years making the world a more playful place, particularly for kids.  They have "built, improved or improved" an amazing 16,300 playgrounds in that time.  

KaBOOM is more than about playgrounds and that is why they started the Playful Cities USA program that honors cities that have worked to make their communities a playful place to live.  Things like hopscotch sidewalks, adequate recess at schools and play days are just some of the elements that make a city playful. None of that happens unless a community's leadership chooses to make their community a better place to live.  241 communities have made this year's list.  Did your city make it?  To find out, click here.

As impressed as I was by those who made the list, I was equally intrigued by those who did not.  I reviewed it and found that there were whole states with no Playful Cities:  Alaska, Arkansas, Delaware, Hawaii, Oregon, Utah, Vermont and Wyoming have no Playful Cities.  I find it interesting that what most of  states have in common is that they are blessed with nature's tools of play (waves, mountains, etc.).  Perhaps if play is ambient there is no perceived need to create it.

I was also surprised by some of the cities that were missing from the list.  

How to Manage Quality Control in China

 

 

 

Richard Ellert is the Founder of the OnShore Advisory Group, LLC.  He offers a special expertise developed during his more than twenty- five years experience in domestic and international manufacturing enterprises. His close involvement with every aspect of supply chain management, vendor and partner relations, quality assurance, safety, social responsibility and the nuances of import and export services has built up an incredible store of knowledge and experience. 

 

The very first thing we hear out of the mouth of anyone looking to source or manufacture products in China is the perception that China is synonymous with poor quality. Nothing could be further from the truth.

 

There are plenty of “poor quality” products made in the USA and Europe, therefore it is clear that the quality factor has absolutely nothing to do with location.

 

China is a world-class producer of goods, evidenced by products such as iPhones, flat screen tv’s, automobiles (BMW, Mercedes, GM, VW all have manufacturing plants in China). No one would ever venture to suggest that these products are of poor quality, in fact, they are a benchmark in their categories.

 

In the 1950’s, Japan was associated with cheap, poor quality products and so was Hong Kong in the 60’s. What could have changed? Obviously the people in those countries did not suddenly develop a quality gene.

 

What changed was the introduction of systems and methods that dealt with the issue of efficiency and quality in a systematic way. Methods introduced by Deming and his disciples demonstrated that anyone brought up in a system of Total Quality Management and Lean Management would be capable of delivering quality consistently and contribute to make improvements on a continuous basis.

 

The lesson to be drawn from the successes in Japan, Hong Kong and eventually China is simply that Quality is a factor of design, planning and execution. The suggestion that a cheap product is necessarily of bad quality is erroneous.

UPDATED: FAO Schwarz Is Closing; The End of an Era...Or Maybe Not

(Since writing this post I have been in contact with several people at Toys R Us and they tell me that they are aggressively seeking another location in Manhattan.  So, it may not be the end of an era but be the beginning of a new one.  Stay tuned.)

Some things made by man seem as permanent as mountains and oceans; particularly to children.  FAO Schwarz is one of those things.  Amazingly, FAO Schwarz, that icon of toys and play that has been around for 145 years, is closing its doors.

Who is to blame?  Well, it isn't Geoffrey the Giraffe and his Toys R Us brand owners.  They would have liked to keep the store open as much as they would like to maintain a presence for their Times Square store.  It wasn't the parents with whom FAO maintained some of its past glory.  Nor was it the kids who seemed to sense that there was something special about a store with guards who look like they had just stepped out of the Nutcracker.

So why did FAO Schwarz have to close?  Blame it on exploding rents,  the Internet and the passage of time.  Yes, time that has made the store feel so special in a nostalgic sort of way was no match for the headwinds of modernity that brought a new sense of not just how to shop and where to shop for toys but the very definition of what is a toy.

Think of the parade of children who walked through those doors looking for magic during the Gilded Age, the Spanish American War, World Ware I, the birth of the Soviet Union, the Roaring 20's, the Depression, World War II, the Korean War, the Cuban Missile Crisis, the Space Race, the Psychedelic 60's, Viet Nam, Watergate, the end of the Soviet Union 9/11 and so much more.  

That parade of kids would have dressed differently while walking through the store, boys in knickers and later in jeans;  girls in frilly dresses and later in jeans as well.  Whatever they were wearing they shared a feeling of anticipation just before they walked through those doors.  What wonderful, magical, new thing would they see?

Goldman Sachs Studies the Millennial Generation; an important report

One of the largest generations in history is about to move into its prime spending years.  Millennials are poised to reshape the economy…forcing companies to examine how they do business for decades to come. 

Goldman Sachs Global Investment Research – “Millennials Coming of Age” 

Take time to review the excellent look at the Millennial Generation provided by Goldman Sachs in its report:  “Millennials Coming of Age.”  These are the parents who are purchasing toys and play for their kids and for themselves.  I

Coming of age during a period of social, technological and economic disruption, they have a very different outlook than previous generations.  This is a “game over” generation for traditional consumption. 

When you add to that the fact that this generation is the biggest in history with half again as many members as GenX; it portends change now; change later and change after that. 

Since the recession this generation has been graduating with lots of debt and little in the way of quality employment.  This has driven them to live at home, to avoid major purchases and to postpone family formation.  If you have wondered why pre-school sales have been suffering its because this generation is putting off having babies.

When they do get married; it’s at an older age (30 on average as opposed to 23 in the 1970’s).  What is interesting is that they are eventually going to start marrying in large numbers and when they do its going to kick start the toy and play industry. 

When that happens; smart companies will be aware of what drives this generation.  They are considered to be the first digital generation which means they will, not value but expect products to include some kind of connectivity. 

Not only that, they are not enamored of cars and are not buying them in the numbers that characterized earlier generations.  They are, however, happy to shop on-line so ecommerce providers can be expected to increasingly gain a larger share of consumption.  This is going to potentially make an Amazon or toysrus.com as or more important than bricks and mortar providers.

The Changing Face of Children’s Television and the Fight for Time

There is an interesting New York Times article on kids and television:  “Nickelodeon Remixes Its Formula to Fit Young Viewers’ Media Consumption.”  It’s an interesting read on the challenges of providing children’s programming in a world in which children have so many media choices and so little free time.

According to the article,  the challenge to providers is twofold:  

1.    Viewer easurements are not reliable.

It seems that in the good old days, Nielsen could easily tell you how you were doing.  Now, however, it is much harder to accurately track streaming services, video on demand, apps and of course       television.

2.    The latest cohort of 2-14 year old kids are different.

The children who consume these various formats are different than their older siblings.  They       want new and different and as a result Nickelodeon is running with more original shows and utilizing       writers who are multi-racial and multi-geographical. 

Nickelodeon had to do something.  Their viewership was down by 14% for kids 2-14 last year.  If you think that was a big number; Disney Channel was down 21%.

 

Age Convergence; Not Age Compression

Those of us in the business of play spend a great amount of time thinking about the convergence of the physical and the digital.  Disney Infinity, Activision Skylanders are the two leaders in the phygital (physical + digital = phygital) category, which appears to be moving from being just a play segment to becoming to becoming the standard for play. 

There is, however, another type of convergence taking place and that is the way children and adults choose to entertain themselves.  That thought came to mind when I read an article by New York Times writer, Julie Turkewitz, entitled "After a Spa Day, Looking Years Younger (O.K., They’re Only 7)."

Here is how the article describes a phenomenon in which children, as young as four, are getting the spa treatment:

The spa industry has begun to target children in a big way, going way beyond mother-daughter manicures. Adult spas are adding separate menus of services for girls, usually ages 4 to 14. In most major cities, there are now dedicated day spas for children, offering a range of massages, facials and other treatments for girls (and sometimes boys) too young to have had their first pimple.

Lest you think that this is a New York or Los Angeles, phenomenon, let me assure you that you can find a “Sweet and Sassy” spa and salon in Tampa, Florida; Denver, Colorado; Cummings, Georgia and Pearland, Texas.

Keep that in mind for a minute as you think about the recent advertisements for chocolate flavored vitamins for adults and the use of Skeletor, He-Man and Stretch Armstrong to sell cars.  Think about the number of adults who collect action figures and play video games while at the same time bring to mind all the children who use cell phones and tablets.

The walls between childhood and adult play are collapsing which creates opportunities and obstacles.  Yes, kids are indeed getting older younger but at the same time adults are getting younger older.  I think that those who engage in the supply of play consider these questions:

1. Does my product, now directed at children, have applications for adult play?  If so, do I need to create an adult version or do I just need to change my package or product positioning.

2. Should I be reconsider how I market by product if I am currently aiming at children alone?

3. How does my marketing give adults permission to play with my company’s toy or game?

4. If I am a retailer, how do I make adult shoppers feel comfortable in my toy and gaming departments?

5. Do I have sufficient research on adult play consumers to make decisions as to the above questions?

Age compression is a problem; age convergence is an opportunity.  

 

Sometimes a Toy is Just a Toy

“Sometimes a cigar is just a cigar.”

Attributed to Sigmund Freud 

It is doubtful that Freud actually said: “Sometimes a cigar is just a cigar.”  Whether he did or did not; it is still a useful piece of advice to remember when attributing a sexual meaning to a child’s toy. 

That thought came to mind over the last few days as Hasbro came under fire for a applicator in its Play-Doh Cake Mountain toy that some described as looking phallic. Here are just two of the many headlines: (AP) “Phallic Play-Doh Accessory Called Disturbing; and (NBC) “Play-Doh Vows to Replace Phallic-Shaped Play Set After Outrage.” 

How did this design get out the door.  Well, you can be sure that no one at Hasbro saw this toy, as any more than what it was, an applicator for applying decoration.  They were making a child’s toy, not a sex toy.  They were looking at the toy through the eyes of innocence.  

Some adults, however, have given the product a meaning that was never intended and that a child, without adult prodding, would not apply.  After all, to the most part, children are innocent and adults are not.   That’s just the way the world functions but it’s a shame that an over-reaction by the few adults creates headlines and embarrassment for a principled company.

Should Hasbro have spotted this?  Are parents right to be concerned?  Is it all about nothing?  What do you think?

Richard Gottlieb Looks at the Toy & Play Industry on Be Terrific!! T.V.

 

U.S. Birthrate Continues 6 Year Decline but Toy Industry Hangs On

Those who provide play to children are continuing to feel the impact of a decline in the U.S. birthrate.  According to The National Center for Health Statistics, births are now down from down 9 percent from 2007. 

Tamar Lewin, provides this information in her New York Times article:  “U.S. Birthrate Declines for Sixth Consecutive Year; Economy Could Be Factor.”  She goes on to quote William Frey of the Brooking Institute as saying:  ‘“On just about every demographic indicator involving young adults, whether it’s marriage, buying a home or delaying childbearing, it’s all been on hold since the beginning of the recession….”’

If you think about it, the toy industry is doing pretty well when you consider that the last few years have featured a major recession; a decline in the birthrate; an increase in all forms of competition for play time and a decline in free play time for children.  It speaks well for the resilience of the toy industry and its people as well as for the ceaseless desire of people to play.  

Help may be on the way.  The latest figures show a rise in employment and increases in wages (see:  December 5, 2014 New York Times article “Big Job Gains and Rising Pay in Labor Data.”  In the meantime, take a moment and appreciate how well the industry has done despite macro forces beyond its control.

Building a Career - With Toys

Unfortunately, this is not an article announcing job openings within the Toy Industry. Sorry. However, the following example may provide a great idea for approaching toy companies and toy job interviews if you are seeking just such an opportunity.

With the jobless rate in the U.S. still hovering around 6.7%, job seekers are being forced to find unique and unusual ways to make their skills and experience stand out among others. One requisite job search tool is that very uninspired looking piece of paper, called your resume. It is also the perfect vehicle for highlighting your creativity and problem-solving skills in this challenging job environment.   

A recent article from Mashable tells of how one young candidate became frustrated in her job search efforts and decided to create a toy-esque resume.  Her Lego avatar and Lego-inspired resume have created quite a buzz on the internet.  A truly unique mashup of a toy and a real life situation.  Just one more example of how toys are becoming increasingly versatile and powerful in our society, beyond play scenarios.

While the article does not mention if Leah actually landed a job or not, you can bet she had fun creating her resume and preparing for her interviews.  You can also bet she left a very lasting impression on potential employers.

 

The Sad Side Effects of Gender-Based Marketing

Recently there was a story about 9-year old Grayson Bruce who was bullied for bringing a My Little Pony lunch sack to school.  His North Carolina school responded by asking the child to leave the bag at home as it was a “trigger for bullying.” 

In this industry we talk a lot about gender, gender-based marketing, and the idea of gender-neutral products.  We talk about how girls are often more willing to play with boys toys than boys are to play with girls toys – and Grayson’s situation is a glaring example as to why.  Was it worse because it was a little boy using a brand marketed to girls? Maybe. But I’d guess that if a little girl showed up to that school with a Teenage Mutant Ninja Turtles lunchbox I’m sure some of her classmates might look at her a little funny too.  Regardless, the fact that children are bully due to gender-based marketing is sad.

The Future of Children’s Books and Learning

Beth Rogozinski is the founder of Transmedia SF.  She will host and moderate an upcoming panel on the Future of the Book on Oct 22 in SF.  If you are In SF for LitQuake or the Futures of the Book events, Transmedia SF has made available a 25% discount to readers of Global Toy News.  Just use the code: GlobalToy. 

Like many industries today – publishing has been massively disrupted by digital technologies and the proliferation of screens.  In addition to children increasingly using mom and dad’s iPad, a slew of new kid specific tablets have hit the market including offerings from Samsung, LeapFrog and another 7+ providers, with new entrants joining the pack including School Zone’s Little Scholar that was just announced this week.[1]  

With the rise of screens in even the littlest of children’s lives – many people have begun to consider what impact screen based reading will have on developing brains.  And we ask ourselves too -  what impact will this all have on the makers of books?

“Reading has changed,” said Etienne Mineur, who is the founder of Incandescence[2], a publishing house in Switzerland that specializes in themes related to new technologies and experimental art. “We are reading more on TV screens, on mobile phones, on video games, as well as on paper.” Due to the shift in how and where and when we read, Etienne and his teams are now focusing on connecting reading with toys, cards, and other tangible objects. 

“With my studio, we  are inventing, designing and developing new games, toys and books, focusing on the relationship between the tangible and digital” continued Etienne.  “We don't espouse the digital versus the tangible, but instead try to find new creative way to improve digital experiences with tangible media.”

Playification Case Study - Chipotle's The Scarecrow

Launched nationally on September 12, Chipotle's The Scarecrow animation and app game mark a new step in the playification of industries outside toys. The Pixar-quality animated short, released on YouTube rather than broadcast as a commercial, continues Chipotle's authentic advertising philosophy, one which recognizes that Millenials "are skeptical of brands that perpetuate themselves."

The Scarecrow short film was digitally animated by Moonbot Studios and features a Fiona Apple cover of the song "Pure Imagination" from Willy Wonka and the Chocolate Factory that would fit nicely alongside Danny Elfman's most epic and somber works.

Playing The Gender Game - How Gender Roles in Toys impact Toys & Games

There are few more divisive topics in our industry than that of gender's place in the toy aisle. Advocates for the removal of gender categorization and gender based marketing believe vehemently that these structures are destructive to burgeoning identity. Others, often equally educated and informed, argue that gender is a cornerstone of identity. One vantage is idealistic, hopeful, but perhaps unrealistic. The other is too quick in dismissing the value of change in favor of "today's reality."  The truth, I think, lies somewhere in between these vantage points, somewhere between the progress that can be made and the conservation of traditionalized social constructs. For the sake of debate, I will be writing from a singular, intriguing, perplexing, and sometimes enraging vantage point: that of the stalwart who would defend gender as a primary categorizer and marketing positioner in our toy industry. These views, unless stated, are not to be taken as my own feelings, but rather an unbiased look at what valid points are to be had from this side of the gender debate.

For those attendees of World Congress of Play, the galling time constraints (our own fault for not monitoring time) on mine and Anna van Slee's debate are here removed. I hope Anna will find time to capture her research as well, supporting the alternative and perhaps more progressive vantage point in this debate.

To reduce this debate to singular (though often appealing and persuasive) anecdotal examples of gender role change relating to children, such as Toys R Us' steps in the UK to eliminate some gender biased marketing efforts, or efforts to sell clothing with gender-neutral marketing, should not be included in this setting. There are always anecdotal examples available on both sides of an argument. If not, the argument would not exist. For every expert quoted opinion that prospects are brighter for normally gender-identifying kids, there is a compelling alternative like Dylan, whose heart-wrenching attempting to conform to accepted gender types and his family's embrace of his choices is documented in his mother Cheryl Kilodavis' picture book My Princess Boy. These are all emotional yet anecdotal examples that tug at our heart strings but lack scientific significance. Abandon easy oversimplification of the debate and analyse the facts, not the rhetoric.

Train Board Game about the Holocaust Pushes Boundaries

A couple of years ago, I spoke with Brenda Brathwaite Romero about her series of 6 board games titled ‘The Mechanic is the Message’ that make one ponder their themes/topics and change how you think about these topics. Among many things, Brenda is a TEDx2011 speaker (her talk is about these games and is incredible) and a celebrity in the video game world.

The titles/themes include:

-Train Board Game, about the Holocaust 

-The New World, a game about slavery

-Síochán leat (Gaelic for Peace Be With You), or The Irish Game about Oliver Cromwell’s invasion of Ireland

-Mexican Kitchen, about illegal immigration, still in prototyping

-Cité Soleil, about day and night violence in a densely populated shanty town in Port-au-Prince in Haiti, in progress

-One Falls for Each of Us, about the Trail of Tears, in progress

Art, experience, entertainment, controversy – whatever you want to label it, they are brilliant and inspired. I was going to write about Brenda and her games, but she recently gave a talk and there is an article about that talk says it better than I could have. The following are just a few excerpts to hopefully interest you to link over to the original article – a very interesting read.

“Train accomplishes something that few other board games can do: It makes you think about an emotionally difficult subject.”

“A board game might seem like one of the last places you’d find innovation. In fact, board games are going through a revival now, in part because of the popularity of crowdfunding on Kickstarter, and because they are now an increasingly popular inspiration for their digital cousins, video games. The game is part of a growing tradition of Games for Change, which are as much about social causes as fun.”

“Word about the series is getting around. A film crew is prepping a documentary about Train. Other publications have written about it.”

Read more at http://venturebeat.com/2013/05/11/brenda-romero-train-board-game-holocaust/#2IyhHrpkrYBkR9wi.99

Why Should Toy Manufacturers Focus More on Adults?

Utku Tansel is the Head of Toys and Games Research at Euromonitor International. After completing his MBA in London, Utku joined Euromonitor initially as a Research Analyst in 2004. Over the past nine years, he has been responsible for strategic development and managing of diverse research projects in various industries including toys and games, consumer electronics, clothing and footwear, housewares and household furnishings, DIY and gardening, personal goods and eyewear. In May 2010, he was appointed to his current role developing specialist in-depth toys and games industry knowledge and global expertise in the process.

Having completed his Law Degree (LLB) and trainee contract, Utku is also a fully qualified lawyer in Turkey.

The number of over 65-year-olds rose by an annual average of 2.5% over 2000-2010 to account for 7.9% of the total population globally. By 2020, this group is forecast to account for just less than 10% of the global population. As underlying demographics points to adults, is it time for toys manufacturers to look at this segment more closely?

In Japan, to counteract the declining child population, Japanese toymakers have successfully expanded the age range of their target consumer. A large number of collectible action figures, candy toys and capsule (vending) toys are now aimed at adults, in particular targeting the impulse purchase market. In 2011, toys targeting over 20-year-olds accounted for more than 23% of all traditional toy sales in Japan. With more cash to spend, older generations are better able to indulge in hobbies and activities, such as collecting, which are on the rise in the country. Toy collecting hobbies have also been bolstered by the fact that the majority of the population in Japan lives in cities and therefore does not have much space to take part. With the current population trends in Japan, it is likely that more toys will emerge targeting adults. The 45-54-year old and over 65-year-old segments are forecast to be the only age groups to register increases during the next 10 years, and toymakers will scramble to draw them to their brands early.

Source: Euromonitor International 

Less than 10% of traditional toys target adults in most countries

In the majority of markets, the percentage share of traditional toys and games that target adults (population aged 20 and over) remains below 10%. Why so low? Perhaps the general view that toys are for children plays a role here. Euromonitor International believes that it is time for toy manufacturers to target older consumers with their products and marketing activities. As adults enjoy considerably higher purchasing power than children, they represent a great untapped consumer base.

ChiTAG's Toy Mashup - An Invitation to Play!

What do G.I. Joe and broccoli have in common?  They both wear green.  Their heads look similar (at least the flocked hair version of Joe does).  And, they both ‘stalk’ their enemy.   

Like thousands of unexpected combinations, the elements of this remix or ‘mashup’ could morph into almost anything; based entirely on an individual’s imagination, interpretation and spin.  Countless mashup genres exist today ranging from music artists, to videos, TV shows and advertising, to literature and food, just to name a few.  Several Toy Story video mashups exist, but are there any sites entirely dedicated to toy mashups?  Have you seen any?

With the 10^th anniversary of the Chicago Toy & Game Fair happening this November, we have decided to start the celebration a little early and create a fun opportunity for toy and game designers as well as the general public.  This is a unique outlet for EVERYONE to express and display their inventiveness and playful thinking.  This is an opportunity to unleash your wildest, craziest ideas without the worry of manufacturing, marketing or distributing anything!  How often does that combination happen?

So start creating the wildest toy concoctions you can dream of using all sorts of subject matter:  food, tools, nature, household items, you name it.  The possibilities are endless and the sky’s the limit.  After you’ve created your mashup(s), show us what you’ve got each Friday by posting to The Chicago Toy and Game Fair Facebook page: http://www.facebook.com/ChicagoToyAndGameFair.  Or, stop in and "like" creations posted by others.  

And, if having fun is not reward enough, we will be giving prizes to the winning entries (details to follow on the ChiTAG Facebook page). Prizes will be awarded to toy industry professionals as well as those from the community who participate.

So what do G.I. Joe and broccoli have in common?  Well,…they may both end up on the Chicago Toy and Game Fair Facebook page at some point.  How they are ‘mashed' is entirely up to all of you! 

 

Social Media Gets Bumpy for Barbie

Bald Barbie conversations are happening all over the Internet. Michelle Spelman suggested I write about it for GTN, but since has already written about it in her Cincinnati Examiner blog, I asked if she would like to share the story and how it has grown even since she wrote about it. If Michelle’s name is familiar, it is because I recently wrote about the Cincinnati’s Game & Toy Industry’s Holiday Gift Guide that she put together highlighting the products invented and produced by Cincy toy/game industry people. 

Michelle: No doubt you’ve heard about the public campaign launched recently on Facebook trying to convince Mattel Inc. to make a “Beautiful and Bald Barbie” doll for children living with hair loss induced by cancer and other diseases.  Forbes.com summarized the story beautifully earlier this week. 

This is a classic example of why large and small companies must, not only, engage in social media, but also must have strategic social media contingency plans in place for navigating public image challenges that can arise.

What started as a simple page on Facebook, grew to a crusade, in a matter of days, that is now over 135 thousand “likes” strong.  The effort has spilled over into all kinds of other social channels like Twitter, YouTube and blogs, and into the mainstream media as well.  Huffington Post, ABC News, USA Today and others have covered this growing appeal.

The initial response from Mattel to the campaign’s organizers was a canned dismissal that legions of individuals have received over the years:  ““Mattel doesn’t accept ideas from outside sources.” 

The “Beautiful and Bald Barbie” group was not dissuaded, pushing on with their efforts to spread the word and gather support.

The End of the "Game Company"?

A six hour flight gives one plenty of time to think. 

And on the way back from New York week before last, the thought that kept tugging at me was this: “What is the future of the traditional ‘Game Company’?”  Or better yet:  IS there a future?

This particular meeting in New York may have been a glimpse into what could be a very different future for the traditional game industry.  We met with a company that has absolutely no ties to our industry whatsoever.  No Toyfair presence.  No ASTRA membership.  They aren’t even a product company.  What they do, however, is bring over 1 million visitors to their site each month.  And they want to sell those visitors games – among other things.

So while the average “Game Company” struggles to sell 5,000 units of any new title in its first year, these folks could sell 10,000 units or more with very little effort.  And they have a great Brand, along with a very loyal consumer base.

All of which makes me wonder:  Will the next great game company not even be a “Game Company”, but a great Brandthat just happens to develop games?  After all, the most-played online games right now aren’t marketed by Hasbro or Mattel.  They’re brought to you by Facebook.   And Facebook is definitely not a game company.

The Games part of our industry presents a few major challenges to entry.  First off, it’s hugely capital intensive.  Hire a designer, developer, warehouse, and an admin, and you’re already in for $200 - $300k before selling one unit.  Add to that the cost of molds, tooling, and actual product, and you’ve got to have pretty deep pockets.

The second issue lies with the incumbents – Hasbro, Mattel, Spinmaster, etc.  Cranium was the last real effort at creating a new Brand to compete with the big guys.  It teetered at $60 million or so in sales, then virtually imploded under the weight of trying to be the third largest Game Company in the world.  Small companies just can’t compete when it boils right down to the scale and resource base that the big guys possess.

Finally, the retail funnel continues to get smaller.  Target and WalMart have both decreased their sku count in the game aisle, and other majors are rumored to follow suit.  With less retail space in traditional channels, it becomes even harder at retail to displace the safe bet offered by heavily promoted or licensed products.

And yet, families still play games and consumers still want to buy them.  Which means that someone will still make and sell them.  And who that will be in the years to come, will be anyone’s guess…

Fit for a Queen or a Doll

 
One thing about the Royal Wedding caught my attention—the dress. When I read the Telegraph’s description of the gown, “individual flowers…hand-cut from lace and hand-engineered onto ivory silk tulle to create a unique and organic design,” I pictured Cinderella’s mice and bird friends merrily sewing the extravagant gown. I also visited exhibit cases in The Strong’s National Museum of Play to say cheerio to the royal bride dolls.

Designer Norman Hartnell fashioned Queen Elizabeth’s wedding dress with a sweetheart neckline and a skirt embroidered with 10,000 seed-pearls and thousands of white beads. Following the wedding, Queen Elizabeth kept Hartnell as her main designer and soon younger generations sought his fashions. These youngsters weren’t the only ones with a flair for royal fashion. Doll maker Dorothy Heizer stitched a stunning replica of the bride’s gown for her Princess Elizabeth doll. Heizer hand-stitched the dress of white satin and adorned it with 45,000 tiny seed pearls, rhinestones, and pearl-colored beads. When Heizer completed the doll she sold it to Mary E. Lewis, the first president of the United Federation of Doll Club. Lewis wanted one more accessory to complete the doll’s outfit—she commissioned W. Waters Schwab of the E.J. Scheer Inc. jewelers to replicate the Queen’s engagement ring. Any fashionista will tell you that when it comes to wedding attire no expenses spared.

More than 30 years later, Queen Elizabeth’s son wed one of the most stunning brides in history, Lady Diana Spencer. Her wedding dress designers David and Elizabeth Emanuel recalled the momentous occasion in a 2006 CBS story. The Emanuels code-named their new client “Deborah” and employed two guards to keep the design private from the paparazzi and fans waiting outside their studio’s windows. The pair found inspiration in Diana’s presence and in St. Paul’s Cathedral (the scale influenced the 25-foot long train). Shortly after the public gawked at the bride as she walked the red carpet (I mean, aisle), Danbury Mint issued The Princess Diana Bride Doll. The order form says the doll captures Diana’s “captivating smile, her special poise, and endearing grace.” Seamstresses’ hand-stitched sequins and pearl-like beads on the doll’s dress of taffeta and embroidered lace. Like the Princess Elizabeth doll, the Princess Diana Bride Doll also sparkles with real diamonds on her tiara and earrings.  

Hey Politicians - Play Some Board Games!

 

WooHoo the elections are over!  And while you may wonder why an article about politics is on Global Toy News, it’s not because I’m going to talk about some sort of safety legislation but instead about winners and losers.  On every news channel last night there were politicians giving concession speeches or victory speeches, because unless you ran for the governor of Illinois, there was a point when it was determined that you won or lost.   In a way, I wish we could have seen those speeches BEFORE we cast our ballots because I believe that how a person reacts to victory or defeat shows a great deal of their character.

In Illinois, as well as a number of other states, there were lots of close races.  Candidates were winning by margins of 1-2% and while 1-2% of 3.5 million (or even just 200,000) is a LOT of votes.  Winning candidates have to realize that there were a significant number of people who voted for their opponent.  So it baffles me that there were politicians who chose to talk about “crushing” their opponent, or calling them “vicious” and “negative” in their acceptance speeches!  I saw ALL of the negative TV ads; no one was playing nice.  But the game is over, politely accept victory and quit bashing your opponent – they LOST!  

There were other candidates who had extremely gracious acceptance speeches vowing to do their best to represent all of the people within their district without regard to who they voted for and offered the proverbial olive branch to their opponent.  And vice versa for some of the defeated contenders.  While this may be politics at it’s best – smiling and kissing babies -- it’s also an attitude we should take note of when it comes to wining or losing.  There is no point to bridge burning because you may end up in the same fight in the future and the outcome could be different.

Personally, I believe that spending a lot of time playing games can teach adults and kids how to have a good winning or losing attitude.  Sure, it hurts to lose an hour-long game of Scrabble especially when your opponent seemed to be the luckiest person on Earth, but stomping off or dumping over the board doesn’t encourage your opponent to ever agree to a rematch.  Being able to say “hey, great game” whether you win or lose is a life lesson that everyone should know.  Whether you’re in business, politics or just outvoted in a PTA meeting, accepting the outcome with grace and dignity typically earns you respect.  While it may not wipe away some of the negative remarks you made about your opponent during the battle, it will start your reign as victor off on the right foot.  So learn to be nice, play more games!

 

Don't Take The Toys Away

Take toys out of Happy Meals? What is the benefit of that? Seriously. Toys are not trivial objects of entertainment. Toys entertain, inspire, educate and invite thinking and doing. Toys inspire the choices children later make in their adult lives. Toys change the world. Unfortunately, this is little known and seldom unacknowledged.             

Frank Lloyd Wright's toy blocks inspired him to become an architect. What if those blocks had come in a Happy Meal? More importantly, what if they hadn't?        

The Wright Brothers credit a toy airplane they received as a birthday gift as inspiring their fascination with flight, without which powered flight would never have been born. What if that airplane had come in a Happy Meal? Or not? How might the world be different? Toys entertain and inspire children, and children alter the world as adults.        

Toys matter. Read Inventing Kindergarten by Norman Brosterman to see clearly how the toys, or ‘gifts’ of the original kindergarten educational program influenced some of the 20th century’s greatest minds. 

Ask yourself and ask others, "What was the influence of toys in your life?" One Nobel Prize winning scientist was quoted as saying that one of the greatest losses to our culture has been the relative simplicity of the modern building blocks that have replaced the far more versatile, challenging, and complex Erector sets made up of motors, belts, and gears. What he was saying was, "Toys matter. They really do matter."         

Please don’t take the toys away. 

Change Afoot in the Toy Industry

 

We learned in meetings this week that while the big-box retailers are cutting suppliers and offering less variety and selection to customers, they are also giving their major vendors - the big toy companies - more responsibility to manage their ‘real estate’ on the retail shelf. 

The big toy companies are finding it easier to get their products on the shelf, and to a greater extent are being told by retailers to do what they want with the shelf space they are allocated. They can stock the shelves with whatever they choose and manage that space for the retailers. All the responsibilities of stocking, restocking, and choosing what to put on the toy shelf has been outsourced from the buyers and merchandise managers to the toy companies. 

“Theirs not to reason why. Theirs but to do and die.”

We can’t know what change will bring. We can simply do our very best at what we do, get better and smarter at doing it, and hope that our clients and the consumers themselves find it of value.

Phthalates

Toy industry advocate Rick Woldenberg will be on the TV show 60 Minutes this Sunday May 23rd, during a segment on toy safety.  

Quoting from his blog Amend the CPSIA:

“We are hopeful that 60 Minutes will draw attention to the doubtful and wasteful impact of this law on law-abiding companies like ours. However, we have not seen the segment yet (we will see it when you see it), so we do not know the viewpoint that they will take in the piece. The focus of my interview was the 'unintended consequences' of the phthalates ban, of which there are many."