Mattel Goes Hollywood: Can Toymaker Beat Hasbro at Its Own Movie Game?
Hasbro (HAS) has been able to cash in on its marquee brands in recent years, breathing new life into decades-old toy franchises through theatrical releases and updated product lines.
It worked splendidly with Transformers, spawning a couple of box office blockbusters. G.I. Joe did reasonably well in 2009. Battleship didn't do so well this year, but it didn't seem like such a good movie idea from the start.
Larger toy maker Mattel (MAT) may not be at that point yet with some of its younger properties, but it seems inevitable now.
Monsters to the Rescue
When it comes to dolls, Mattel is best known for its American Girl and Barbie franchises. However, its fastest growing doll line -- which has gone from $20 million to roughly $375 million in annual sales -- is Monster High.
Unlike Barbie, which targets girls between the ages of 3 and 6, Monster High attracts a slightly older audience. They've outgrown Barbie and Ken, and the gothic yet stylish Monster High dolls allow Mattel to reach a new audience.
Mattel has been milking its young and mysterious monsters in creative ways. A website complete with games and online episodes debuted two years ago. There have been TV specials and a console game. There was even a direct-to-DVD release in time for Halloween last month.
However, now Mattel is aiming at the silver screen. A full-length, live-action movie is in the works, and should hit a multiplex near you come 2014.
It's not the only line that may prove to be box office gold for Mattel on the silver screen.
Max Coverage
Max Steel isn't a household name in this country, but Mattel is hoping to change that soon.
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Mattel announced this week that it will introduce Max Steel -- an action figure line for boys -- in the U.S. next year. It's a line that has served Mattel well in Latin America, where it delivers roughly $100 million in sales a year.
Mattel plans a similar approach with Max Steel, starting with an animated TV series and an interactive website. If things go well for the product line, a movie in a few years also wouldn't be a surprise.
Lights! Camera! Playthings!
Toy companies don't have much of a choice in going Hollywood. Children have been bypassing traditional playthings in favor of tech toys and digital content.
A few analysts have downgraded the toy makers ahead of what they see as a challenging holiday season in 2012. If the trend continues -- and kids continue to show more and more favor to tablets and portable media players over toys -- the toy companies will be glad that they branched out into theatrical releases to make their toy lines more entertaining and conducive to licensing deals.
Kids may not want toys now, but deep down inside, these toys want to be movie stars.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Hasbro and Mattel. Motley Fool newsletter services have recommended Hasbro and Mattel.
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