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And That Was 2025: Wrapping Up The Toy & Game Business In 2025

And That Was 2025: Wrapping Up The Toy & Game Business In 2025

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2025 EXPECTATIONS vs REALITY.

After a few tougher years prior, expectations heading into 2025 were positive. My prediction was for mid to high single digit growth for the global Toy & Games market overall. It looks like this prediction is going to be about right in the end, although there were many points in the year where this looked by no means certain.

Pretty much all year we saw positive reports on sales levels from Circana and other sources. Yet the one word which kept coming up in my conversations with people all around the world of Toys & Games was ‘TOUGH!’ – the market demand from consumers may have been strong, but things have never felt easy this year for most of the people I encountered across continents and departmental functions.

It now looks like we will finish the year with at least modest growth, and there’s a fair chance of us seeing the fairly significant growth I originally predicted. That’s not a small thing in a tough world with everything going on and bearing in mind how mature the Toy & Game business is at this point.

Frankly there are far worse industries to work in, and we should probably all take the time to breathe deep and recognise that fact.

TARIFF TRIBULATIONS – WERE THEY TRANSIENT?

The first gigantic curveball of the year was the sudden introduction of potentially destructive tariffs on imports to the USA, especially from key Toy & Game producing countries – with China being lined up in the sights of President Trumps Tariff blunderbuss. At one stage the tariffs lined up on US imports from China were sitting at a hefty 145% (!). Anyone who has spent more than 5 minutes in the Toy & Game business knows that is completely untenable and commercially unviable.

That period of Tariff frenzy back in April & May 2025 was the worst I have seen in 26 years working in this business – forget the dot.com bust, forget the global financial crisis and forget the COVID-19 pandemic – having 145% tariffs on goods from the country producing c. 80% of all Toys & Games heading into the world’s biggest market by far represented the worst crisis of this millennium for the Toy industry (as well as many others).

If you add 20-30% tariffs, prices will go up a bit and margins will go down a fair bit for retailers & suppliers, but at the end of the day nearly everyone will stay in business, stay employing all those people and stay producing the Toys & Games that Kids want. Make that 145% and nobody can stay in business for long.

I’ve been beating the drum for nearly a decade and a half at this point about the Toy industry strategically diversifying to be less reliant on China, not dropping China, but reducing supply chain risk by diversifying. Lo and behold the entire industry decided they had to diversify over night. Things went freakin’ crazy!

I have never had a more intense work period than April & May 2025 trying to help clients set up distribution in new geographies in a hurry. Having turned 50 earlier in the year, in April I had a cruise booked to the Norwegian fjords. Every time we came within 5km of land on this boat, my phone would light up “I just landed in Ho Chi Minh City, Bengaluru or somewhere else, what factories can you recommend/set up meetings with.” Honestly I was quite glad when the boat went further away from land again and I could get some peace and quiet.

And then the USA & China seemed to reach a peace deal on tariffs and things were moderated significantly which frankly can only be seen as a good thing.

And as of now things seem a little calmer, although we’re still waiting trade deals with some key geographies, including notably between the USA & India.

My prediction is that the Tariff scenario we saw in 2025 will not be repeatable at that scale as it’s very clear that any more tariff increases will send inflation upwards while President Trump is under pressure on cost of living issues from his domestic audience.

But let’s see on that, either way, one good thing to come out of this year’s Tariff frenzy is the industry finally realising that we really do have to geographically diversify in a fast changing world.

STRONG MOVIE SLATE

One of the things that made me bullish on 2025 was the movie slate, the strongest since the pandemic. Ok there are arguments nowadays to argue about how important movies are as a driver of sales versus how it once was pre social media, pre-YouTube, but movies are still massive events getting millions of ‘bums on seats’ in cinemas/movie theatres around the world, and each blockbuster movie being accompanied by massive marketing spend and ‘Noise’.

And lo and behold, the following chart, courtesy of Box Office Mojo shows that 7 out of 10 of the biggest grossing movies of 2025 are very ‘Toyetic’. Zootopia 2 and Lilo & Stitch both smashed the $billion global box office level, and were 2^nd and 3^rd biggest grossing movies of the year.

Lilo & Stitch was a particularly poignant movie for me as I worked on Toys for the original movie with Hasbro back in c. 2001-2002 at the start of my Toy industry career. One of the challenges the we had back then was the clear genderification of Toy aisles…with a lead female character in Lilo and a lead ‘male’ character in Stitch, it wasn’t totally obvious where to merchandise the Toys. Fast forward nearly a quarter of a century and that issue is much reduced in significance, e-commerce effectively takes away that level of significance of categorisation. A parent can just search for ‘Lilo & Stitch Toys and find them, versus back in the day when they would have to check in both ‘Boys’ and ‘Girls’ aisles in physical retail. And of course attitudes to Gender and Toys have changed considerably as well.

Nowadays theatrical releases of movies are just one part of the opportunity with streaming services in effect offering a second hefty distribution channel for movie content with a long tail which clearly has had an uplifting effect on Toy sales in 2025. Disney alone has c. 132m Disney+ subscribers and something like 196m total subscribers including Disney+, Hulu & ESPN. This is a massive install base to beam Disney content direct into homes around the world, and that’s before you factor in Netflix, Amazon Prime & other streaming services.

LABUBU

One of the things about qualifying as an ‘industry veteran’ is that you start to take a lot of things for granted. One of which is that there is a load of stuff which is always huge every year i.e. Pokémon was the big thing when I first joined Hasbro in early 2000, in fact Pokémon had been so huge in 1999 for Hasbro in Europe that when the craze slowed down quite a lot in 2000 it reduced total European sales by c. 1/3! But ever since then Pokémon has been a massive brand and played a huge role in the Toy & Game business, along with many others – but we already know about big established brands like that, so instead we tend to focus on what’s newer. So while I’m focusing on Labubu here, that’s because I have spent a quarter of a century talking about everything there is to be said on that topic!

Just in case you somehow don’t know what Labubu is, according to Grok, Labubu can be described thus: “Labubu is a mischievous, elf-like monster character with pointed ears, sharp teeth, wide eyes, and a furry body—often described as "ugly-cute.” In other words it’s a soft Toy with a vinyl face.

Like a lot of overnight successes, Labubu has actually been around for quite some time having first been created back in 2015. Pop Mart, the manufacturer of Labubu is an interesting study in itself, but I’ll leave that for another article. Nevertheless Labubu’s massive global success in 2025 lead to CEO Wang Ning forecasting somewhere between $2.8bn USD to $4.2bn depending on how the year finished up. Just to put that in context, Habsro’s full year reported revenues for financial year 2024 were $4.135 billion (!).

The fact that a company which only started in Toys around a decade ago can dream of reaching annual revenues on a scale which could match long term Toy giant Hasbro is totally remarkable.

In terms of explaining the success factors with Labubu, that’s not that difficult – blind box format, celebrity endorsements, distinctive visual style etc. - what’s always more difficult is to know which of the thousands of new Toys released every year will catch the moment and be the one that really breaks out as per Labubu in 2025. If you’re a cynical industry hack like myself, and if you’re honest, you look at Labubu and probably think you get why the formula works, but then still don’t really understand why this particular expression of that formula worked so well.

Like all massive global trends, the question which is always asked is ‘how long will it last’. I always remember what one very wise industry person told me about this type of wave of success “I want to be there at the christening you see, not there for the funeral”. No brand remains on that kind of soaring success wave forever, but just like the Pokémon brand I referenced above, the question is can Labubu establish itself as a perennial success going forward just as Pokémon did? The answer to that is probably yes, but time will tell…

AI & TOYS – SMART TECH BRINGING EVER DEEPER PLAY EXPERIENCES FOR CHILDREN

Choosing what to review about a year is always subjective, there are so many things you could look at, but in the end choice of topic is always going to be influenced by your own experiences.

This year one of the WOW experiences I have had is working on AI Toys with my client Fluffbotics. Beyond this project though, I feel like Technology has at last begun to fulfil what has been a forthcoming promise – for quite some time the Tech has been flirting around true 2 way interactivity. Toys have been getting better at talking to children for decades, but they didn’t get good enough at listening to what children say to the Toy and then genuinely responding with some degree of intelligence. And even when this tech started to come, it was so clunky and took too long to process and respond leading to unfulfilling play experiences.

Having seen inside the hood of what AI can do for Toys with Fluffbotics, I am now absolutely convinced that some of the best-selling Toys going forward will be AI enhanced Toys. Combine the child’s favourite characters with an LLM which can listen, understand and reply back with full authenticity to the character and magic happens.

Interestingly, one of the major pushbacks I received while pitching AI Toys to Toy companies this year was that Licensor’s/brand owners would not want an AI Toy having free reign to get creative with storylines, characters and what characters have to say. Funnily enough one of the major examples used for this was The Walt Disney Company, who are known for enforcing brand guidelines strongly.

My reaction to this objection was that AI and content, and therefore AI & Toys are an unavoidable juggernaut as was music streaming, the internet and all these other tech waves. If brand owners don’t take control of this, it will happen anyway, so you may as well jump on board the bus and take at least some control of what’s out there.

Then Disney announced a deal to co-operate on content with Open AI to allow their Sora platform to generate short AI videos utilising 200+ Disney, Marvel, Pixar & Star Wars characters. Disney’s CEO Bob Iger was quoted thus: “It gives us an opportunity, really, to play a part in what is really a breathtaking, breathtaking growth in essentially AI and new forms of media and entertainment”

Standby people, because what happens in content happens next in Toys.

Now to be clear there are some significant and valid concerns about AI LLMs interacting with children. The risk of AI saying something inappropriate or even harmful is real, and if Kids do truly form relationships with Toys, then they will share secrets, and if enough Kids do that eventually (sadly) there is going to be a child who is in danger or has been harmed expressing thoughts and feelings that parents should know about.

So AI Toys will need parental controls, guard rails and the ability to flag concerning conversations with the child. But that is all also inevitable as it is clearly so pre-requisite in this case.

My conclusion on this topic is that you’re going to see a lot of Toys featuring AI being best sellers going forward. They won’t be at the cheaper end of the price point spectrum, as the Tech integration comes at a cost, but if you deliver unprecedented play experiences and get high volume on high priced items $sales levels get large very quickly.

AND SO THAT WAS 2025…

2025 has certainly been an ‘interesting’ year! On reflection it’s been a good year for the global Toy & Game industry, but with many many challenges. The broader world has also seen it’s terrible tragedies, wars and turmoil which has been saddening. But the human spirit shines bright, and most of you reading this, just like me have a lot to be truly thankful for…and sometimes we forget that.

This is a good place for me to say a massive thank you to our clients, friends, colleagues, suppliers and of course anyone who has read, watched or listened to my rambling thoughts.

Wishing you a very Merry Christmas, hope you get the chance to relax and enjoy time with your families, and here’s to peace on earth and goodwill to all humankind.

GREAT PEOPLE ARE YOUR BIGGEST ADVANTAGE

Toy Recruitment Consultancy has become one our most in demand services. We have a social and own media platform (including this newsletter) which allows us to directly access c. 25k people in the world of Toys & Games from across the planet, aside from which after 25 years of grind, we know a lot of Toy & Game people across the world.

So if you have key senior roles to fill or if you just can’t find someone qualified for a key role you need to fill in your country or overseas, just drop me a DM and I’ll explain how we work/the costs involved or check out our Toy Recruitment website here: www.ToyRecruitment.com

FLUFFBOTICS AI TOYS

I’m currently advising FLUFFBOTICS AI Toys. Backed by Google and with a specifically developed child centric LLM driving the platform and the Toys, we want to show you next gen Toys – exhibition in Nuremberg at Spielwarenmesse and New York. Come see us if you want to see cutting edge A.I. powering great and safe play experiences:

Spielwarenmesse Booth: Halle 4A, A-18

New York Toy Fair Booth: Launchpad, Level 1, Booth 6611

FACTORIES

Board Games factories – we represent leading Games factories in India, China & Vietnam, if you need to geographically diversify & find good reliable factories offering competitive prices just get in touch.

Factory group in China & Cambodia - producing jewellery, sensory compounds, cosmetic, DIY activity, art & crafts components for the world’s biggest retailers. These types of products can be problematic for compliance with chemicals and all that. Our partner in this space has an unparalleled record of hitting compliance standards for many of the world’s biggest retailers. Just dm to find out more/get quotes…

THE KEY WORD FOR 2026 IS ‘PARTNERSHIP’

Heading into 2026, a key strategy for our business is ‘Partnerships’. By leveraging my contacts, relationships and industry knowledge in conjunction with sector specific partners I believe I can ramp up both the number of companies I’m helping each year, but also go deeper and further in helping our clients to deliver success for their businesses:

PRODUCT SOURCING AGENCY – INDIA

I’ve been helping companies source from India for c. 12 years. I’ve often thought about trying to set up a Sourcing agency working on the ground to help companies smooth out the bumps which often come manufacturing in India. I’m now working with a really good partner on the ground and so we’re heading into Toy Fair season offering to help people on any level from operating as a true hands off Sourcing agency you can buy the products you ned from through to production line inspections.

With the tariff landscape still uncertain, If you want a partner operating on the ground for you in India, and other geographies, just drop me a line…

PERFORMANCE MARKETING AGENCY

As part of my work in India, I have worked extensively in and around Bengaluru (known as India’s Silicon Valley) – this city is at the heart of India’s role as a key supplier of tech services. So it’s no surprise that I have met a number of Tech entrepreneurs educated at some of the best U.S. universities and now running companies back in India.

For 2026 we’re rolling out a partnership with a leading Performance Marketing company to help companies ramp up and exponentially grow revenues on Amazon and across other platforms. I’ll be applying a quarter of a century of brand marketing expertise working on major iconic brands such as Monopoly, Play-Doh, Disney and more in conjunction with a team of boffins who live and breathe digital marketing all day every day.

If one of your New Year resolutions for 2026 is to ramp up your Amazon business, and if you’d like a Free review of your Amazon business (subject to availability/demand), please just drop me a DM…

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This article is copyright 2025 RG Marketing Ltd, all rights reserved. All contributors to this article contributed under a work for hire basis on behalf of RG Marketing Ltd. Please also note, this article was written and published in the United Kingdom, and while our research for this article has utilised several AI LLMs, all of the above (bar one reference from Grok on Labubu and an AI generated image of peace) was written by a genuine bonafide human being!

LA FALL Toy Previews 2025: Don’t Blame It On The Sunshine, A Subjective Review Of The Show

Just got back from the LA Fall Previews show in El Segundo, Los Angeles. And aside from having far more sunshine induced Vitamin D in my system than I usually have at this time of year, I’m still buzzing from the show.

Here’s my review of the show, as per the title it’s obviously subjective – all shows are experienced differently by different people due to their different objectives, focus and meeting schedule. This is how I experienced it:

LENGTH OF SHOW: 2 WEEKS IS A LOOONG TIME - The fact that the Market Weeks element of this show is 'just' 2 weeks can be seen as progress vs a loosely scheduled 4 weeks which is where we started. Those companies selling direct to US retail may still be hanging out for another 2 weeks to catch the stragglers, but most of the companies I met with, especially those who were in LA to meet international distributors, were heading out at the end of the 2 weeks. 2 weeks may be less painful than 4, but that’s still a lot of time to spend in an expensive place far away from the home offices of most exhibitors. I was fortunate enough to be staying in Manhattan Beach, which is both upmarket and by the time you get to the beach vibrant and bustling. I don't think I would have liked the location of the show very much if I was staying at LAX or further inland from there as some people were. If there’s one recommendation I can make for people who haven’t been to this show but plan to attend in the future, it would be to stay as close to the beach as you can. The other thing to point out is that many showrooms were equally as busy at the weekend as they were during the week. Several people told me that their biggest meetings with key partners/buyers were at the weekend. So 12 days straight of exhibiting without a break is not for the faint hearted. I guess there are two ends of the spectrum here - those who had one or two meetings per day stretched out for the duration through to those who were booked out from start to finish. Either way though, there was certainly enough business to be done to merit the trip according to everyone I spoke to. If a show is turning out to be a complete dud for anyone, they are usually quick to bemoan that fact, and from the 100+ people I spoke to during the show nobody questioned the quality of meetings they were having. Long term Toy people love to moan that a show isn't as busy as it was last year regardless of official visitor stats, but with a show that is new and on the up even the most cynical Toy business hacks can't do that with the LA Previews.

BIG THANKS TO THE TOY ASSOCIATION

As Covid disrupted the Toy trade show schedule building as much as it disrupted everything else, there was a lot of toing and froing about which shows were still needed, and the main net effect on the big U.S. shows was for the Fall Preview event to have moved from Dallas to L.A. Regardless of the fact that there was some debate/bickering about this, in my mind it has clearly been for the best. Los Angeles is much more accessible vs Dallas and has so much going on.

At this stage I think a big thank you is due to The Toy Association who helped to pull this event into a formal gathering, condensed the schedule and throughout the two weeks I was in L.A. did an exceptional job at arranging networking and social events. The Toy business is still a people business, despite all the technology we have these days. Most formal shows have an array of after-hours dinners, engagements and events, and The Toy Association delivered this in buckets at this show. I met new potential customers, old friends and colleagues and generally had a lot of fun after hours thanks to the efforts of The Toy Association. Without those events it would have been far less effective and certainly a lot less fun!

There are some other guys involved in formalising and centralising this event, I believe a big thanks are due to Jonathan Busher for among other things pulling together this website for the show: https://toypreviews.la/ Alongside The Toy Association’s website I found everything I needed to know between these two websites: https://www.toyassociation.org/toys/events/la-fall-preview.aspx

THE BUILDINGS For those who did not attend this show, let’s take a moment to describe the physical format of the show. Firstly, the Mattel HQ overshadows the area, clearly it was the presence of Mattel, MGA, Jakks Pacific & others on this side of the States which meant that Buyers had to hit town to preview with these key players. Logically then where the Buyers are already going is a good place to go. As a result, several buildings close to Mattel’s HQ now have Toy showrooms, at least during the Previews.

Looking at some of the key buildings:

Let's start with The Toy Association building which can be found at 101 Continental Boulevard, El Segundo. Some relative newcomers may not get the excitement about a building full of Toy showrooms, but the Toy Building in New York was a legendary place which mostly housed the NY Toy Fair before the industry decamped to Javits. There are still many positive associations for people who experienced that building. The Toy Association did a great job getting this new LA base off the ground, hats off.

1960 ON GRAND - just along the way from The Toy Building, 1960 felt like it housed the most showrooms. I didn't count and compare, but there were many well-known names here, and hanging around in the sunshine outside this building yielded my best random meetings with people.

OPEN/SPACES - ok, I'm going to be frank here - this building was like something from a slightly warped Korean TV show. Although it only has 3 floors, and those floors are rectangular in shape, the layout and office numbering on this floor really befuddled me, and also the countless seemingly lost people I repeatedly encountered as we all wandered aimlessly around hoping to stumble upon our planned destinations. But navigation issues aside there was a real buzz in this building.

THE SHOW VIBE - These gatherings are rarely downbeat. Even if times are tough (which they certainly have been this year due to the 'T' word) people are normally happy to see their friends and commercial partners and to showcase their new products. I definitely felt a positive vibe throughout my meetings. Even the tariff issue was treated almost like a hurdle which has been surmounted now one way or the other. While conditions remain tough, most people I met with were fairly optimistic, or at least were very good at acting that way!

TECHNOLOGY & TOYS - I can't exactly explain why, but since I entered the Toy & Game biz at the turn of the millennium I have always seemed to be drawn towards or dragged towards the intersection of new tech and Toys. One of my first ever projects was to lead the team which launched MyMonopoly.com - customised Monopoly designed & purchased online, then I lead Hasbro's team adding DVDs into classic board Games. When e-commerce was new, I worked on e-comm projects. When online Virtual Worlds was a thing, I worked on those. When Robotics got really cool for Toys I worked on that.

These new Tech driven waves of opportunity come with so much uncertainty and chaos, I just seem to fit well with for some reason (there are those who have called me ‘Captain Chaos’ in the past).

Now as voice recognition and AI fuse to finally be able to deliver on the long offered promise of 'bringing Toys to life' I find myself working in that space with Fluffbotics.ai, a cutting edge Google funded A.I. company with a ready to go module which can be inserted into a Toy to allow true 2 way conversation between child and Toy for the first time.

Needless to say lots of people were very interested in this, although any new Tech component comes with a price. This Technology is potentially revolutionary for sure, but at least for quite some time to come it will be available at premium prices – no pocket money Toys in this space, but definitely huge play value for the child.

AWAY FROM THE SHOW – L.A. is one of the most glamorous tourist destinations in the world. Aside from the smog and terrible traffic, it is a city which is well known even to those who have never visited due to its iconic Hollywood sign, beaches made famous by Baywatch, Beverley Hills, Universal studios, Disneyland and so much more. All of which adds up to a unique after show experience/opportunity. While there is not that much going on in El Segundo, it’s a relatively short drive to Santa Monica, the southern beaches and many other glamorous spots.

My weekend involved watching a Baseball game down in San Diego, as well as ‘enjoying’ my Brazilian Jiu Jitsu hobby by getting beaten up by some polite but cold and lethal boys from the L.A. hood as well as various lethal grappling champions down in San Diego. Needless to say Monday morning was very painful. But that’s just my idea of fun, whatever is your idea of fun I suspect you can find it in and around L.A.

JOURNEY HOME – I think I’ve flown c. 800 times at this stage. Three times out of the 800 I have tried to transit through a chaotic airport which was closed. Once during the monsoon in Mumbai, once during the first torrential rain in decades in Dubai and on my way back from these LA Previews through Dublin airport as IT glitches and a security scare shut the airport. By way of a different airline and Terminal I managed to get home just about, but my luggage did not join me. Bearing in mind the 2 weeks away, my luggage contained nearly every item of clothing I own, and while some might say my clothing all needed to be thrown away and new clothes purchased to at least bring me in line with fashion from 10 years ago instead of 30, it was a relief when my bag, my clothes and the various samples it contained made it’s way back to me belatedly.

OUTLOOK FOR LA PREVIEWS - At this stage I would be greatly surprised if the Fall Previews do not continue to be one of THE major shows on the show calendar. In my last meeting a UK brand owner told me he had gone so far as to cancel his booths in NY and Nuremberg as he had seen all of his international distributors at this show, and this timing worked better for distributors who can instantly start selling his products with finished product samples available. Just before I fall out with my good friends and colleagues who organise the NYC & Spielwarenmesse shows, this gentleman did confirm that many of his distributors would be exhibiting his products at these shows, and he would still attend as a visitor. While we're on the topic of comparing and contrasting shows, there is no doubt that LA has the glitz, the glamour, the beautiful weather, beaches and proximity to LAX. But I always say if a show has been around for more than 70 years as per Spielwarenmesse, and more than 100 years as per New York, there is clearly a reason for that longevity. LA is here to stay, but this young whipper snapper of a show seems to be adding not subtracting from the calendar at this stage, and I expect it to last long into the future.

TOY & GAME BUSINESS CONSULTANCY

In the nearly 15 years I have been Consulting for, we have advised 1200+ Toy & Game companies, set up distribution into most major markets and helped to accelerate our client’s growth across the world. For more information on how we can help, check out our services here: www.KidsBrandInsight.com/services

GREAT PEOPLE ARE YOUR BIGGEST ADVANTAGE

We’ve successfully recruited for roles in the UK, USA, Korea, Middle East, HK, China and beyond. Our contact network is truly global… (ok we’d struggle to recruit for you in North Korea, but otherwise we’ve got you covered!).

So if you have key senior roles to fill or if you just can’t find someone qualified for a key role you need to fill, just drop me a DM and I’ll explain how we work/the costs involved or check out our Toy Recruitment website here: www.ToyRecruitment.com

Job Seekers Friday – as part of this work in helping to place good people, I’m going to try (as far as time and workload allows) to promote a new jobseeker every Friday going forward. If you are a job seeker with at least 5 years’ experience in The Toy/Game business and you want me to promote you to my audience of c. 25,000 industry people, please send me a DM & I’ll explain how it works (no cost).

Lilo & Stitch (2025): What Its Success Says About Toy & Entertainment Evolution Since 2002

Lilo & Stitch (2025): What Its Success Says About Toy & Entertainment Evolution Since 2002

Do you need help to find the right mid to senior level people? We can help…we have been helping people from across the world of Toys, Games & Licensing to find new roles since 2011. Our client list reads like a ‘Who’s Who’ in the industry, think of a Toy company and we have worked with them in some way. Along the way we have met thousands of really talented people who could be your next hire. Send me a DM for more information if you need help to hire new people, or check out www.ToyRecruitment.com

Lilo & Stitch (2025) has hit over $1billion in global box office takings at the time of writing. This is a big number for the sequel to a movie which originally took $274 million back in 2002. So what’s changed? How has a movie franchise which did ok, but was not a big hit turned to gold in 2025 for The Walt Disney Company? There are a number of reasons for that, and in some ways the 2025 big success vs the 2002 movie doing ok is a symptom of broader changes in the world of family entertainment and Toys.

LILO & STITCH 2002

The hardest job I ever had in Toys was when I randomly found myself the junior member of a two-person team managing Hasbro’s relationship with Disney in Europe back in the early noughties. At that time, the companies had so much business together that our regular update meetings would last all day. In the midst of an eight-hour extended meeting as tiredness came on, we would let something slip and suddenly find ourselves in trouble when we went back to the office. I remember we agreed to giving up Plush rights in Hungary (or somewhere else in Eastern Europe, my memory is hazy on the details) to the original Lilo & Stitch movie and being advised we had just given away $2-3m when we got back to the office.

When Hasbro signed a big new deal with Disney back at the turn of the millennium, and I took on that new role helping to manage the relationship between Hasbro & Disney, there were 4 movies on the immediate horizon where Toy licensing was seen as opportunity: Atlantis: The Lost Empire, Lilo & Stitch, Monsters Inc. & Treasure Planet. Of the four, Monsters Inc had the biggest commercial expectations. And as it turned out rightly so as this movie hit $half a billion globally at the box office. Monsters Inc was a Pixar movie, and at that time, Pixar as a separate entity to Disney was notably and particularly successful with pretty much EVERY movie, so it was to be expected that movie had higher expectations. Atlantis: The Lost Empire had the lowest expectations; I would say that Treasure Planet was expected to be next most successful leaving the quirky but unusual format of Lilo & Stitch expected to be 3^rd out of 4^th in terms of commercial success.

Expectations are so important with the ‘quickly in and out’ business which movies offer. The movie will launch with strong marketing and noise causing an initial surge of merchandise sales, and then historically would come a Video or DVD launch later in the year for a 2^nd spike in Toy sales. The number of individual products developed depends largely on expectations of how a movie will do, but it’s always like placing a bet – some bets come off and some don’t. Think about how the original Toy Story movie Toy launch totally failed to set the bar high enough in terms of number of skus and inventory commitments. The same was clearly true with the original Frozen movie. Parents around the world were going crazy about how they couldn’t get hold of Toys for the movie…back in 2014 I remember being set up for an ambush interview on the radio to argue with angry parents why the Toy industry was trying to fleece them by keeping demand low and prices high (you can listen to that interview here if you want: https://www.bbc.co.uk/programmes/p022bk27)

To cut to the chase here, Lilo & Stitch back in 2002, originally had fairly modest expectations versus the other Toyetic/family entertainment movies being released. To some degree then, the level of success achieved by the original movie was a self-fulfilling prophecy, in fact $1/4 billion was a very good number at that time for an animated movie.

BETWEEN 2002 AND 2025: A MEDIA REVOLUTION

When we look back at the media landscape as it was in 2002 versus how it is today, it is simply crazy how much it has changed. If those people who lived through the late 1700s and early 1800s experienced the industrial revolution, history will surely reflect on our current generations living through the ‘Internet Revolution’.

Movies were the dominant mass market Toy shifter back then, TV advertising was the primary marketing medium, physical retail prevailed over the nascent upstarts like Amazon, and Toy companies were Toy companies as opposed to being Toy companies with Entertainment company aspirations.

Fast forward to today, and home streaming of entertainment content prevails, TV advertising for Toys is considered a secondary marketing tactic now, online retail is huge, but in all fairness while everything else seems to have changed, movies are still a big thing if not quite as big a Toy sales driver as back in 2002…the bigger change though is the shift from the 2^nd sales bump model we used to have with VHS & DVD releases.

And it’s this latter point where we should begin with when it comes to understanding how Lilo & Stitch 2025 can do so much better than the original instalment. Because whereas historically, you would have to choose to buy the Video/DVD and would need to specifically choose to spend $10 (or whatever it costs) on a quirky lesser known older Disney movie, there are now 150m+ families around the world who could automatically stumble across and watch the original Lilo & Stitch movie without having to directly and specifically purchase that. It’s clear that Disney + has allowed the innately viral properties of the Stitch character to work viral magic.

One further thing that has changed since the original movie is labelling and narrative around gender & Toys. Unlike back in 2002, we no longer (publicly at least) label Toys as ‘Boys’ or ‘Girls’. One thing you have to note with Lilo & Stitch (both movies) is the positioning is fairly unusual – there is a super cutesy, quirky endearing young girl who also has a naughty side and who has all the usual friendship/family relationship issues we would expect in a property targeting Girls. On the other side, we have a miniature wrecking machine which is both capable of being ultra cute, ultra gross and is the embodiment of an action-oriented character which would traditionally be classified as ‘Boys’.

And therein lies an additional explanation of why it’s easier for Lilo & Stitch as a franchise to be successful in the Toy business today versus originally – back in 2002, the thinking of Toy companies was driven by which aisle in physical retail a Toy could be merchandised in. The physical retail reality of Toys R Us had a bigger part to play in the mindset and strategy of U.S. and US HQ’ d global Toy companies, a property could be skipped if it wasn’t clear where it could be merchandised – ‘if it ain’t on the Boys or Girls aisle, it ain’t nowhere’. Think back to Harry Potter’s first foray onto Toy shelves - when the first Mattel Toy lines launched back in the early noughties…despite the virtually unprecedented success of the books, and the first movies being very successful (nearly $2bn box office for the first 2 movie instalments alone), the Toy lines did not perform to expectations originally, largely because retail didn’t know where to merchandise it.

Today things have changed, but not just because of a changed perspective on gender across much of society, it’s also because departmentalisation/categorisation is less important with online retail. If you want Lilo Toys, Amazon will find them from your search, and the same applies for Stitch. Today, Harry Potter Toys & Games are among the most successful classic properties, arguably for the same reason – the gendering of Toy aisles is no longer an insurmountable hurdle.

NOSTALGIA: OLDER GENERATION INTRODUCING THEIR FAVOURITE TO A NEW GENERATION

Another factor to look at is that well known driver of movie franchise (and Licensed Toy) success: the rose-tinted view that comes from nostalgia. 23 years later after the original release, a child who was 7 first time around is now 30, maybe they have their own kids now. Maybe mom/dad and child can watch the 2025 iteration together, and we know how powerful that can be. Think Star Wars, think Jurassic Park/World etc., the list could go on and on. Nostalgia is a huge driver of Toy sales and with the increase in ‘Fandom’ which has been one of the major successes of the Toy business across the last decade or so, it’s obvious how this could be a big part of the greater success of Lilo & Stitch in 2025.

THE IMPACT OF LIVE ACTION

One final point which is a little off topic but needs to be said – live action real human characters can obviously create stronger emotions than animated characters. One very powerful factor in the 2025 iteration of Lilo & Stitch is the raw emotions created by the threat of Lilo being taken from her sister and put into state custody. Seeing real human emotion really triggers a strong bond with the characters in a way which doesn’t always come across when the movie premise is more fantastical (okay the Stitch element is inter-planetary, and you don’t get more fantastical than that, but the relationship between Lilo and her sister is as real as it gets).

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In the nearly 15 years I have been Consulting for, we have advised 1000+ Toy & Game companies, set up distribution into most major markets and helped to accelerate our client’s growth across the world. For more information on how we can help, check out our services here: www.KidsBrandInsight.com/services

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