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jurassic world

‘Jurassic World’ to bring an early Christmas to the toy industry

By
John Kell
John Kell
Contributing Writer and author of CIO Intelligence
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By
John Kell
John Kell
Contributing Writer and author of CIO Intelligence
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June 13, 2015, 9:30 AM ET
Courtesy of Universal Pictures
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Dinosaurs don’t stay extinct for long in the movie theaters. And the toy industry will happily excavate the prehistoric animals for profits.

This weekend, the Jurassic Park franchise returns to theaters for the first time in 14 years. The Universal Pictures film is poised to do big business at the box office, which is expected to benefit from nostalgia among millennials and others who grew up with the movie franchise as well as court new fans that weren’t alive when the original slate of three films were released.

But toy makers and retailers are also giddy about the potential to piggyback off of the movie’s success. As Fortune previously reported, Jurassic World is expected to be one of the most popular toy trends this year. That’s very good news for Hasbro (HAS), which is making dinosaur-themed toys, games, and wearable gear associated with the film.

Jurassic World is part of a slate of toy-friendly films this year that some say will be the strongest the industry has ever seen. Those films include an already released Marvel’s Avengers sequel, as well as the upcoming Minions, Ant-Man, and, most importantly, a new Star Wars.

“2015 is really the beginning of an unprecedented era of new entertainment that is going to build every year,” said John Frascotti, president of Hasbro Brands.

Frascotti said the movie slate looks especially strong from Walt Disney (DIS), which owns Marvel and Lucasfilm, as well as Universal and Dreamworks Animation (DWA).

Hasbro's "Jurassic Park" toys are filling up store shelves.
Hasbro’s “Jurassic Park” toys are filling up store shelves.
Courtesy of Hasbro

Sales of licensed toys jumped 7%, or two time faster than the rest of the toy market, in the 12 months ending April 2015, according to research firm NPD Group. Last year, it was all about Frozen, which generated over $500 million in toy sales in the U.S. alone, but this year’s slate should boost licensing toy sales even more. Star Wars Episode VII: The Force Awakens, which doesn’t hit theaters until December, has led to double-digit growth in classic toys, NPD said.

To be sure, not every blockbuster film will yield a hit in the toy aisle. The Hunger Games and Twilight franchises, for example, were huge box office success but didn’t generate toy sales beyond the collectible market. The two best performing films of all time, Avatar and Titanic, also weren’t the right fit for the toy industry.

This year, the studios are poised to release several films that should boost sales and profits for Hasbro, Mattel (MAT), Lego, and their smaller competitors. Industry observers say Minions and Star Wars, in particular, have broad appeal and can play well across both genders and multiple age groups. And even though the Star Wars film will hit theaters just a week before Christmas, retailers and toy manufacturers plan to capitalize on the film. Some have already debuted new Star Wars toys.

“The secret sauce is the partnership between the studios, the toy manufacturers, and the retailers so we can develop great products and great experiences in our stores,” said Toys “R” Us Chief Merchandising Officer Richard Barry. He and other toy insiders say those three groups have worked more closely over the past few years to ensure toys tied to major films are a good fit for retail shelves.

Toy experts say studios have finally realized that films can generate huge profits in the toy aisle. And with more blockbusters being released each summer, the industry stands to benefit from stronger sales in the summer months, when demand for toys has traditionally slowed.

“The majority of toy sales are in November and December,” said Jim Silver, editor-in-chief of toy-focused website TTPM.com. “But if you have a strong summer, it can affect the whole year.” A second jolt in toy sales can occur later in the year, when summer blockbusters are released through digital platforms and DVDs.

Silver said that Hasbro in particular stands to benefit from the film schedule over the next several years, mostly due to the company’s relationship with Marvel. Star Wars toys are more broadly distributed, with Hasbro, Lego, and Mattel all making toys based on the franchise.

While film studios and toy makers have worked together for years to sell licensed products, they haven’t perfected the business model. Frozen was a huge hit but strong demand for dolls and other toys tied to the film caught Disney and manufacturers like Mattel off guard. Toy makers and retailers spent most of 2014 boosting inventory to meet demand.

But this year, it seems toy companies and studios are on the same page.

“Every sign we have out there points toward a very big year,” said Marty Brochstein, senior vice president at Licensing Industry Merchandisers’ Association. “Especially with Star Wars at the end of the year.”

About the Author
By John KellContributing Writer and author of CIO Intelligence

John Kell is a contributing writer for Fortune and author of Fortune’s CIO Intelligence newsletter.

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