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SDCC 2012: JTA's Q&A With Hasbro!

Posted by Paul | July 18, 2012 at 05:40 PM ET

We finally have our Hasbro Q&A report ready for you from San Diego Comic Con!! It's not in typical Q&A format, but it's a great recap of a discussion with Derryl DePriest and company our onsite field representative Rich Alot had while helping us with coverage this year. He got to ask some pretty insightful questions and even got a great tidbit that OT collectors are going to want to know about! Click through to see what Rich was able to distill from his conversation with Hasbro!

I want to preface this by noting that I didn’t ask the Hasbro team any “when will we see this” and “are you working on that” types of questions. While some items came up in our discussions, I decided to write this article focusing on a side of the hobby that is the root for many collector concerns, yet isn’t truly understood. Hopefully this will dispel some of the assumptions and rumors out there and show you that Hasbro really does care, which was very obvious in the tone of my conversation with the team.

I started by asking about distribution and how The Phantom Menace wave has changed Hasbro’s strategy for the future. Hasbro acknowledges that the wave held up subsequent releases, but they had to make sure the on-shelf product supported the movie launch. The team is constantly brainstorming new and innovative ways to meet demand, improve distribution and make sure everyone gets what they want. They’re confident some of their new strategies moving forward will help ensure everyone can find what they’re looking for in the toy aisles.

Many people attribute the rising cost of oil to the increase in prices for figures. While the price has hit those of us in the U.S. hard at the gas pump, it hasn’t had as big an impact on toys. Yes, there are increased prices in transportation and production, but it isn’t as influential on the price of figures as you would think, according to Hasbro. While figures use oil-based plastics, things like clamshell and window-box packaging are the real culprits that can increase price on an item because the raw materials required to produce those is more directly related to fluctuations in the cost of commodities. Interestingly, with the vintage collection, we’ve seen the window-type packaging cut down on confirming Hasbro’s commitment in finding ways to keep costs down.

So why the price increases? The primary factor affecting the price of figures is in production. The Chinese government laid out a plan for annual incremental wage increases for its workforce, directly affecting production costs. When asked how viable it was to bring some production back domestically, Hasbro said some items like vehicles could be and will be produced in the U.S., but figures and other items that have a lot of deco hits (paint applications) are predominantly done by an unskilled labor force that we lack domestically or even in Mexico and South/Central America. It’s worth noting that the most expensive part in the production of a figure are the deco hits/paint applications.

Finally, we discussed the Matty Collector on-line only business model. While the Hasbro team is intrigued by the notion, the numbers that they’ve crunched just don’t show it to be a viable means of selling action figures. I asked if the paradigm shift in buying habits, where collectors who would only buy figures in stores are now turning online to make their purchases would change that, and the Hasbro team was confident that once distribution is corrected, they’ll be able to better serve collectors via retail distribution channels. Remember, Hasbro’s business model is based on volume sales, so distribution via mass retail is still the most profitable for the company in terms of sales and reach.

For those of you that have made it this far, I’ll spill the beans on one tidbit of information. According to the Hasbro team, if a cardboard mock-up of the Death Star playset existed and if they were going to make said Death Star playset, it would be offered as a BDS-style type of item and not modularly.

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