www Immedium

Comics & Games Retailer

Add a 3rd Dimension

By Oliver Chin

Today toy sales have become a major factor in the ongoing success of specialty retailers. Although toys continue to fuel the fire of pop culture frenzies, the toy industry is stuck riding the Wall Street roller coaster of boom and bust. Mega-corporations (Mattel, Hasbro, Toys R Us) are addicted to gambling their short-term profitability on heavily licensed trends and movie tie-ins. In a no-win situation, either they underestimate the popularity of a product that leaves them out of stock and money on the table, or they overestimate and face immovable inventory and big write-offs. Ironically, both scenarios happened simultaneously in 1999, the former with Pokémon and the later with Star Wars: Phantom Menace. However this cabal never learns its lesson, and in 2001 suffered the same late stage glut, declining sales, and earnings disappointments with an overextended Pokémon line. As they place their bets on "Harry Potter", we'll witness if greed will kill yet another golden goose.

Comparatively, comics and games retailers have a much lower threshold of risk and reward. In this smaller market, manufacturers purvey limited quantities to sustain higher MSRPs and demand for "collectibility." The upside has seen a steady sales growth with an increasing plethora of comic-based merchandise. Similarly building from a small selection of products, anime/manga manufacturers and distributors now reward a larger fan base with a greater variety of offerings than ever before.

Building the Platform

Just as the mass merchandisers went bananas with Tamagochi and later Pokémon, now Dragon Ball Z and Mobile Suit Gundam have carved out enduring franchises. The masters behind Tamagochi, Bandai relicensed DBZ in 1998 as an afterthought to Irwin Toys of Canada, thinking that demand had peaked. Irwin was the happy beneficiary from a windfall of renewed consumer interest. Learning its lesson, Bandai has controlled the Gundam universe to establish a multi-purpose beachhead: promote its brand among American fans and toy professionals, sell new product categories (such as model kits), and introduce new series.

Meanwhile, numerous companies have helped stoke the fanaticism of collectors. Video games have been fertile ground for Palisades Marketing (Final Fantasy, Mortal Kombat), Resaurus (Street Fighter), and ToyBiz (this division of Marvel produced Night Warriors and Resident Evil). Pioneer has actively struck licensing deals with McFarlane Toys for its anime titles Tenchi, Trigun, and Akira. Stylish toys from Ghost in the Shell made a name for Toycom, who is now releasing figures from Giant Robo and Dark Angel (Kia Asamiya's comic by Image Comics). "American manga" have spawned figures also, as D-boy collaborated with Warlands (also by Image).

Now, old TV series are being revived: Transformers is on the horizon, plus a re-release of Robotech by ADV Films. Things have come full circle from when these shows were broadcast in 1980s: the sky was the limit to their action and our interest in them.

Standing Tall

By all accounts the state of toy sales based on anime is the best it has ever been. Jonathan Quesenberry, Senior Marketing Manager at Palisades Toys, concurred, "Fully featured films, new platform games and the ever-expanding series base have succeeded in bringing anime and its related products into a much larger marketplace." Diamond's Bill Schanes declared the double-digit annual growth of anime sales has propelled a related hunger for toys. A key also has been their push toward 'U.S.-style pricing' and getting "Japanese manufacturers to lower their suggested retail price, sometimes to the point that the same item may actually cost less in the U.S. than in Japan. This makes the product more affordable from us to the retailer and from the retailer to the consumer, and, thus, more attractive. Negotiating those prices really helped to blow the category wide open."

Nick Peyronneau from wholesaler Samurai-Anime, Inc., revealed that toy sales comprise 40% of his business. Demand for imports, like the DBZ Super Battle Collection (Bandai Hong Kong) and Transformers 2001, drives the hobby market, and prompts more people to import toys and compete for US licenses. Rarity counts, since "Japanese toys versions not released in the US sell like crazy if the TV show is showing in the states."

Therefore, Diamond has aggressively trawled for new items at the source, the Tokyo Toy Fair. Its work has quickly paid off, as Diamond now represents 15 different Japanese toy companies for officially licensed North American sales. In addition to Gundam, DragonBall Z and Ghost in the Shell, Diamond's bestsellers include: Kaiyodo: Neon Genesis Eva, Trigun, Virtual On Kotobukiya: Jo Jos Bizarre Adventure, Bastard Medicom: Neon Genesis Eva Kubricks

The characteristics of a well-designed product are quality and detail to articulation, painting, accurate modeling. Value is important, Schanes concludes since, "This really is a case of the whole being greater than the sum of its parts. You can't point to any single characteristic that makes or breaks a product-it's got to have all of them, and in the right combinations."

Striking a Pose

To reach interested toy buyers more effectively, retailers have a couple options. Schanes suggests creating an effective "boutique" display that cross-sells DVDs and graphic novels with the merchandise. Peyronneau goes even further by suggesting that retailers should commit 25% of their store to this cause. He challenges those who "cling to the no-profit comic business, just because they are comic fans and are too conservative or afraid to move on something foreign." Indeed, more hobby shops are now exclusively focus on selling only anime figures, such as New Type in San Francisco, CA.

Quesenberry recommends "Diversification and hype. If you are looking to increase your fan base, increase what you have to offer and how it is delivered. Also, remember that perception is the world YOU create. If you tell them it's big and splash it big, they'll think it's big." Jumping off their lucrative Final Fantasy line, Palisades is releasing "12-inch figures from the upcoming movie, Final Fantasy: The Spirits Within" as well as the pulp flick Reservoir Dogs, plus more traditional action figures from Resident Evil.

The average toy customer Schanes believes "is the same as the average anime DVD buyer. Traditionally, these are kids 4-12 years old who are looking for cool toys based on their favorite shows, and collectors between 18-38 years old who are on the hunt for nostalgia." For Palisades, Quesenberry focuses on males 14 - 28, who "are educated (or being educated!), have a disposable income and are tremendous fans of pop-culture."

In architecture, the triangle is the strongest form that uses the least amount of material. Therefore, by adding toys to your mix of anime and manga, you leverage your business' strengths to create another channel to satisfy your customers.

Magazines

Comics Buyer's Guide is the USA's longest running magazine about comic books. Every month it features new comic reviews, nostalgic retroviews, interviews and a price guide. Oliver Chin reviews anime, manga, movies, videos, graphic novels, comics, and books.

Comics & Games Retailer provides news to comic and games retailers about practical how-to tips on selling comics and keeping up with industry and market trends. Monthly issues include Oliver Chin's column "Going Global" and other articles that give a national overview of the market.