The doll war in the U.S. is brewing once again with the upcoming holiday season. This means that three of the biggest doll makers in the country – Mattel Inc., Hasbro Inc., and MGA Entertainment Inc. – will be competing against each other in the market.
According to The NPD Group, the doll market in the United States is around $3.4 billion in 2018. The number is up by 45% over the last five years. The current leader in the doll market is Mattel’s Barbie.
For 2019, Barbie is facing two potential threats. The Walt Disney Co. will be releasing the sequel to its blockbuster film, Frozen. With the release of Frozen 2 comes a new set of dolls featuring characters like Elsa, Anna, Olaf, and others. MGA will also be launching its L.O.L Surprise! dolls! Three years ago, these dolls blew up following the unboxing video craze that started on social media platforms.
In 2018, Barbie became a $1 billion brand once again after four years. The success of the Barbie brand has been instrumental in Mattel’s growth.
As Mattel’s biggest moneymaker, Barbie’s sales have risen for seven consecutive quarters. Its presence will remain strong given that there is a live-action Hollywood movie of Barbie starring Margot Robbie currently in the works and nostalgic millennials turned parents are buying the dolls for their children as well.
According to Jefferies analyst Stephanie Wissink, the estimated Barbie sales will slow down in 2019 with $1.1 billion. Hasbro’s Frozen 2 dolls and L.O.L. Surprise! are expected to bring around $500 million each.
The consumer is going to veer whatever way the consumer wants to veer, and unfortunately in some cases, Mattel can’t react to that. They’ve done everything they can and done it remarkably well to get Barbie to a healthy position to at least stand up to the fight, but we don’t know which way the consumer is going to go.,” Wissink said.
When the first Frozen movie was released in 2013, Mattel had the rights to Disney Princess Toys. When the animated film became a hit, Mattel was able to earn about $500 million from toy sales. However, with the release of the second Frozen film, Mattel no longer has the license for the dolls.
The license for Frozen 2 dolls has been awarded to Hasbro. It would only be a matter of time before the toymaker will find out if it’s able to bring in half a billion dollars from the sales of the dolls. The Frozen 2 dolls are set to be released on October 4.
Based on historical merchandising sales of dolls, there’s usually a 20% or more drop for the second installation of an animated film franchise. As an example, take a look at Toy Story. Sales from Toy Story 2 toys dropped by 25%. If this is the trend, Barbie will remain as the top seller in the doll category.
“Everybody expects Frozen to do well, but I don’t expect it merchandise-wise to do as well as the initial movie. Whenever you have something as big as Frozen 1, it’s really hard to replicate the numbers,” said Jim Silver, the editor in chief of TTPM, a consumer-facing review site for toys and other products.
Brands are also banking on the Chinese market to increase sales. If Frozen 2 becomes a big success in China, this would give Hasbro a great global boost.
Mattel has been doing well in the Chinese market for years. Barbie has not had any significant competition in China yet. If Frozen and other competitors become big successes, then these could affect the global sales of Barbie by as much as 50%. However, this does not seem to faze Mattel.
“With Frozen, when they have a movie year, the heat is really on. But Mattel leadership has always been in dolls,” said Michelle Chidoni, a Mattel spokeswoman.
Chidoni also added that whether or not there’s a doll war going on, Barbie still tends to do very well.