Another Day, Another Dollar. Hasbro held their 2015 Q3 Earning Conference Call yesterday and things are looking bad for the Transformers toy business. It’s so bad that Hasbro had to make up for the loss with other brands.
To sum things up which was told yesterday to the press where TFW2005 also attended:
- Hasbro confirmed the 10 Year Plan for the Transformers Live Action Movie Franchise; which they casually let us know during the MIPJunior Conference 2015.
- Noticeable loss in profit for the Transformers toyline.
- A journalist stated that the Retailer Shelf Space allocated to the Transformers toyline is getting smaller and smaller.
- Transformers 5 details to be officially revealed soon?
You will find the exact statements told and several relevant presentation slides, after the jump
Hasbro CEO Brian Goldner stated:
“Over the first nine months of the year, Franchise brands were up 8% absent FX. Transformers was down given the difficult comparison and Littelest Pet Shop was flat, despite growth in the U.S. The other five Franchise brands each reported growth in constant currency in the nine months period.”
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“Play-Doh’s creative play continues to appeal to global consumers. We celebrated the first-ever World Play-Doh Day on September the 16th and we are supporting new fall initiatives, including Crazy Cuts and Cupcake celebration. The growth in these brands helped offset the decline in Transformers.
Last year the brand benefited from the Transformers: Age Of Extinction film. We continue to plan the future of Transformers Franchise in all forms of entertainment, including movies, television and digital expressions.
Transformers: Robots in Disguise is airing on Cartoon Network in the U.S. and many international markets and Transformers: Rescue Bots is also airing on networks around the world.
Last quarter we spoke with you about the incredibly talented group of writers led by Akiva Goldsman, who were charged with plotting out the next 10 years and beyond of theatrical story telling around Transformers. While Paramount has yet to formally announce our next film, we are excited about the vast potential of the work, which came out of the writers’ room.”
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“Finally, revenues in the Entertainment and Licensing segment were down 2% versus 2014. The decline in revenue was primarily driven by lower Transformers revenues in the segment the year after the movie.”
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Journalist Eric Handler asked the following question from Mr. Goldner during the Q&A Session:
“And then secondly with Transformers, tell me if I’m wrong but it just seems from an observation standpoint, the shelf space for Transformers has been shrinking or seeing for us fewer SKUs. I’m just curious to think, get your opinion on how that products evolution will take place over the next couple of years and not at least in non-movie years?”
To which the following answer was given:
“Yeah. First, let’s talk about Transformers. Year-to-date Transformers is actually bucking the trend of a typical boys action property the year following the movie. In fact, it’s down by just over a third, which as you know is far better than one would expect in a non-movie year, and that’s because the amount of entertainment.
We’re also seeing in our preschool Transformers, growth year to date in Preschool Transformers are Transformers rescue bots product line and being supported again by content. Our licensing year-to-date for Transformers is up. So I think maybe we need to take a broader perspective on the performance of Transformers and look more globally because it’s performing quite well and in non-movie year, certainly it’s down in the quarter and down more typical in the more typical range in the quarter.”
WishfulThinking
Personally, I'd be fine with a standardized style. It's what we had for 23 years. Then Movie/Animated/Prime/nuRiD happened.
But, I gotta say…I really dig that nuRiD Prime. He's styling!
mtl79
I'm about to start a bit of a rant so those not up to reading this can ignore it lol…
Ok so here's what I don't get, why not simply standardize the TF line?? I don't understand why Optimus Prime needs to look fundamentally different in the movies and the RID cartoons from the source material…
I understand that Hasbro wants to attract new fans so that one day, when they're in their thirties and having a mid-life crisis like I am they'll still be able to count on their financial support of the brand… but the problem is, when you change the source material too much you end up losing the essence of the character and push away the existing fan base as well…
With these 3 step TFs, I feel that they took existing characters to far off depths that I simply cannot associate with… when these younger kids grow older, they well never be able to associate with the original designs (like boxy Optimus) and so G1 will cease to be…
It would be nice if they could take a page out of BMW and Mercedes' books and simply make standardized designs for major characters that could then be applied from 3 step changers to more complex TFs… Ultimately, if they keep the robot mode close to the source material and modernize alt modes to bring in new fans then that could work also…
Just not a fan of fundamentally shifting major characters away from how they should look…
Also, I'm getting old…
KaonKoopa
I think the Masterpiece line is great for people who are super dedicated to Transformers, but for me the price of entry is far too expensive. I collect other things besides Transformers, so dropping 80 bucks on one of the smaller car Transformers sadly just isn't an option I can swing. After seeing the new Generations figures for Hardhead/Skullsmasher, I know they can do what I'm looking for at a reasonable price. Those figures are more or less perfect representations of their classic counterparts. I just want to see that level of accuracy applied across the board. No silly "re-imaginings" like what they did with CW Prime, Sunstreaker, Mirage, ETC, and like what they're doing with Galvatron. I don't know, I just don't see why they can't do Star Wars: Black Series style Transformers.
Mirage232
Pretty much this. Plus parents buying these figures for their kids probably don't even know or care how G1 accurate Springer is, or how well it stacks up compared to other CHUG releases. To them, its just another green robot on the shelves. That said, I'm not really surprised by this news. RID figures by and large are quite underwhelming, and the crazy hours the show airs probably doesn't help much either.
Mirage232
Was the French comment really necessary?
Collectors are simply an added bonus. Cheap looking or not, Hasbro figures they can also get us to buy their new toys if they look like or resemble G1 characters, so why not design them as such? They know it works. But we are not the target audience. As far as Hasbro is concerned, kids will always be the primary objective. Takara is much more tailored towards adult collectors. And even they have their limits.
WishfulThinking
I think BP was trying to say that Hasbro spins the numbers to make it look favorable for their shareholders. That's not necessarily lying…just making the truth hurt less.
As for what is said at conventions and other similar settings, there's been things said where molds were claimed to be lost or destroyed and they magically appear five years later, Hasbro says they can't do "x" and then "x" happens several years later, and that sales for "x" were wonderful when product is stagnating on local pegs. I generally chalk these discrepancies up to ignorance or just shutting up a rabid fan who won't leave reps alone. But you have to wonder if, occasionally, we get the willful lie.
WishfulThinking
That's the Masterpiece Line. Unfortunately, the cost to create these figures is higher than a standard deluxe, which is already pushing the Black Label $20 price point. But, it'd be nice to see Autobot cars at the $40 price point and Seekers at the $60 level at mass retail rather than as a TRU exclusive. But, that swings back to my retailer/culture problem I mentioned earlier in this thread.
I think it was an attempt to ape the AoE model that they expected to do well. It didn't, so NuRiD isn't either.
Licensing isn't THAT hard. If Big Lots KO robots can get a license from Ford, Hasbro should have no problems doing the same in any given line.
mtl79
Ok so I was bored today… the December 31 2014 annual report can be found at the following link (2015 will follow in about 4 months or so):
http://files.shareholder.com/downlo…-C16F08E1AF90/Annual_Report_Website_FINAL.pdf
Looking at their segments (Note 18), they have the following:
(i) U.S. and Canada, (ii) International, (iii) Entertainment and Licensing, and (iv) Global Operations.
Therefore they are not organizing their reporting by product brands and we will not be privy to that kind of information related to sales of transformers this year vs past years. Having said that, they can be severely fined/prosecuted for intentionally making false statements about the Company's performance.
One thing of interest and I'm not sure at what point they started providing this information, but since the stock market crash Hasbro has been underperforming in relation to the Russell 1000 Consumer Discretionary Index (PDF pg 13).
KaonKoopa
I can't really speak from a business perspective, but I can name some things that have bothered me about how the Transformers brand has been handled in recent years, and why my interest deteriorates more and more with every "new" line.
First off, I'm an avid collector of Hasbro's Star Wars Black Series, and I think for the most part they do a great job with that line. One of the things I really like about the line is the ability to more or less pick up the "definitive" version of the character I'm looking for. With Transformers I feel like they're continuously releasing the same characters over, and over PLUS whatever gimmick they're trying to push. The line is heavily monotonous because it really comes down to "Here's another Optimus Prime!" It'd be great to see Hasbro do something similar to The Black Series with Transformers. Taking modern technology, and making "definitive" versions of classic designs at reasonable price points, spanning popular series like G1, Beast Wars, Games, and Comics. I know they do this to some degree with Generations, but it seems like it always comes down to a "reimagining" of the same characters instead of just giving us a "definitive" version of each classic character design. You've got your Headmaster Optimus Prime, you've got your Combiner Optimus Prime, ETC. Just release a regular/classic Prime and move on to other characters.
Secondly , it really bums me out how they've treated the new Robots in Disguise cartoon merchandise wise. We finally get a show that's probably the most creative/unique thing they've done with the brand since Beast Wars, and there's just nothing worth buying. If you want a great figure of one of the crazy/cool Decepticons in this show, too bad! I also feel like Hasbro was desperately trying to copy Playmates EARLY success with the Ninja Turtles line by making every character one size class regardless of scale. Legion/Deluxe/Voyager scales would have easily covered pretty much every character in this cartoon properly. Not to mention it seems like they might already be considering the possibility of canceling this cartoon, and it wouldn't surprise me if we went back to getting more of the same.
Lastly, one of the things I really enjoyed about Transformers back in the day is that they turned into real life objects. I know licensing is a bitch, but it was cool that you could get a robot that turned into a car/animal (BW Season 1) that you could see in real life. I feel like all Transformers now turn in to generic dollar store versions of whatever vehicle they're trying to get away with not having to pay the licensing for.
bellpeppers
And yet nothing you wrote explains how you concluded that I theorized about HASBRO lying about how much it earns in any given quarter.
T-Hybrid
You talk about "spin" so investors hear what they want to hear…but investors also have access to projections from previous quarters. So what some may argue is "spin" when Hasbro says they're doing better than expected, would actually bore out to investors who were on calls last year when Hasbro was saying "We expect a drop coming off the movie…"
And if you argue that Hasbro doesn't know who's "really" buying the toys, nobody knows who's really buying everything. But, in reality, they have measures in place to know who's watching what…who's buying what…what they're buying it with.
Data Mining is a powerful tool. Especially when used along side test markets, focus groups, and sales figures.
Not that it ultimately matters. Because on an investor/earnings call, all that matters are the raw numbers. If numbers say Combiner Wars is selling well, they can combine that with customer feedback and focus testing to figure out it's the combination aspect.
Hell, if Hasbro looked over Combiner Wars once it's over and the numbers said Victorion and Sky Reign sold better than Superion and Menasor then they know that it's less about the G1 connections and more about something else.
Because an 8 year old likely wouldn't care if Superion was called Sky Reign like we would. Fans such as us are the only people keeping Hasbro tied to classic characters. If numbers start suggesting that connection isn't driving product anymore…we're going to start seeing less attention paid to classic characters more attention paid to whoever/whatever is selling.
bellpeppers
No it doesn't.
The theory says that HASBRO bullshits people at conventions and spins on phone interviews with reporters.
If the theory says that HASBRO lies to its shareholders about who they make toys for, then so be it.
But no way, no how, on any plane of existence does my theory say anything about HASBRO lying about how much money it earns quarterly.
And quite frankly, I have no idea how anyone would or could reach your conclusion…
T-Hybrid
The problem with that theory is it's saying Hasbro lies on their quarterly earning reports. That's…a pretty dumb theory.
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Also, to the guy who said Hasbro is "whining about the non-movie year drop", your dumb.
Hasbro isn't whining. They're saying "this is a thing that happens every time there isn't a movie…" and they're fine with it. In fact, they looked at the non-movie year and said "hey, we did better than we thought".
I'm utterly shocked at how so many whiners are trying to spin this as bad news.
Autovolt 127
You don't think that Hasbro would have just done that with RID if Saturday Morning Cartoons were still a thing, they went off the air last year. It's a shame because this is where RID would have shined.
I agree. Hasbro used to not care about the media as long as the toys were selling, now they care to much and interfere with everything.
I think your theory is very sound honestly.
bellpeppers
Personally, I think the best thing for Transformers would be to disappear for a couple to 5 years.
Then come back with better, more thought out fiction, a plan, and a level of figures that can only go up.
WishfulThinking
For what it's worth, if Transformers were to come to screeching halt after Titans Return…I could live with that. I have decent reps of almost every character I'd want in my collection. If anything, it'd give me a chance to go back and fill in holes in my G1 collection…
bellpeppers
You would think.
But after working retail the last several years I don't have faith in that level of common sense.
RMStunticon
That's subjective. Many feel those figures were okay at best.
T-Hybrid
The problem there is the "Adult Collector" stamp is irrelevant as long as the toy has the age-range stamped on the box.
If they say "Ages 8 and Up" then it's play tested for that range. If they labeled it "Ages 18 and Up" a parent only has themselves to blame if they bought it and gave it to a kid. Regardless of where the toy goes on shelves.