V Is For Vtech, Vehicles, Verrecchia & Video Games – Toy Business A To Z
Vtech is a powerhouse in electronic learning toys, with a strong raft of products which keep coming back year after year with upgraded tech and refreshed versions of classic items like the Kidizoom camera and Kidizoom Watch products which have been top sellers. Originally founded back in 1976 by two entrepreneurs in Hong Kong, the company founded by Allan Wong and Stephen Leung is a global force. In 2016 the company strengthened its market position considerably with the acquisition of major rival Leapfrog.
This is one of the often-forgotten powerhouses of the toy business. From generic toy cars, to Hot Wheels through to licensed products based on movies and TV shows the Vehicles category is a strong pillar of the toy business. The movie franchise ‘Cars’ clearly had a huge fit with the toy vehicles market and as such enjoyed huge success. But the potential for ‘Vehicles’ is huge – Star Wars for instance has such a huge universe of characters and means of transportation that the Vehicle toy options are huge. For children, the appeal is multi-faceted – they like the concept of speed and travelling fast, children also love to role play with objects, tasks and processes they see in everyday life, and kids tend to spend quite a lot of time in cars.
Al Verrecchia had a massive positive effect on Hasbro. Having worked for Hasbro for decades, he moved from CFO to CEO back in 2003 to steady the ship after the failure of Hasbro Interactive and expensive licensing deals caused concerns with the profitability of the company. His reign at Hasbro won’t go down in history as the most dynamic or most exciting, but his ‘Core brand’ focused strategy effectively and efficiently reset the company’s financials and laid the foundations for the more expansive and visionary strategy of the following CEO – Brian Goldner (RIP).
Today the Video Games industry is significantly bigger than the Toy business but looking back to the start of the Video game era, the start was alongside the toy industry. Back when technology was simpler, barriers to entry were not so huge, toy companies dabbled (and usually failed) in the world of gaming consoles. Both Mattel and Hasbro got major bloody noses from playing in this space – Hasbro Interactive had a run of success in the mid to late 1990s, but closed doors with major losses not too long later. Mattel lost a lot of money with The Learning Company at a similar time. Today the Video Games business is regularly spawning brands which are licensed to toy companies creating best sellers i.e. Minecraft, Fortnight & others. Additionally, Video Games historically have had a major impact on the Toy business when a new console launches, with the new consoles topping the ‘Wish lists’ of kids and therefore cannibalising some toy business. In recent times this negative impact of new console launches seems to have lessened, but either way, the Video Games business has a significant impact on the toy business.
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