Toy companies / Global
Being the head of a toy company is most people’s dream job but keeping up with rapid changes in technology and staying ahead of your rivals is not all fun and games. Monocle visits Japan, Canada and Germany to meet the inner children in charge.
Beep, beep! Driven to success in a toy car
Kantaro Tomiyama was 32 when he became president of Tomy in 1986. The Tokyo-based toy company that his grandfather founded in 1924 was in trouble and Tomiyama saved it by closing factories and laying off workers. Three decades on, the company – now Takara Tomy after a 2006 merger with its rival – is in good shape with annual revenue of ¥163bn (€1.4bn). Its bestselling products are Tomica toy cars, Transformers robots and Pokémon characters, and product deals with the likes of Disney and Snoopy have expanded the business. In 2015 Tomiyama (now 62) handed over the day-to-day business to Dutchman HG Meij, the first person outside the family to run the company.
How is Takara Tomy changing?
My father launched the first die-cast Tomica cars in 1970. It has now become a lifestyle brand – and not only for kids. More than half of Tomica revenue comes from clothing, stationery and picture books. We even sell seaweed cutters so you can put car shapes in bento lunches. Since 2000 we have staged the Tomica Expo every year and each event attracts about 100,000 people. When we work with Disney or Hello Kitty, people expect toys that reflect our sensibilities. There will be hits and misses, so our original products must remain the core of our business.
What is Takara Tomy’s next move?
Our domestic business is stable. Our next step is to reach the rest of the world [overseas sales currently account for about 40 per cent of total revenue]. We recently expanded in the US by buying toy company rc2. Since the late 1970s and early 1980s we have broadened our product line to target adults. We call these “fancy variety goods”, which might be a piggy bank or “healing products”. People who buy our talking Yumel doll are generally in their fifties; the oldest are in their nineties. This is a country where adults buy toys.
What led you to incorporate recycled plastic in new products?
In 2009 Japan’s then prime minister announced targets for reducing carbon emissions; we use a lot of factories overseas so climate change is an issue we can’t avoid. We started [in 2012] by using recycled plastic in the rails of our toy trains.
How is new technology changing Takara Tomy’s toy development?
In the 1920s my grandfather made toys from tin. By the 1950s toys were made from plastic and in the 1980s Nintendo launched its video-game consoles. What children are playing with changes; changes in lifestyle are a factor too. It’s hard to predict where things will go. But we want people to stop saying that making toys is old fashioned. Toys are a child’s lifeline; they have been essential in the upbringing of this country’s children.
What’s in Santa’s sack?
1. Beyblade Burst: spinning top with interchangeable parts
2. Pop-Up Pirate
3. Linear Liner: a toy maglev train
Building a brand (with the help of Meccano)
When Ben J Gadbois became global president of Spin Master in 2012, he faced declining sales. Armed with 13 years helming the US consumer-goods conglomerate Newell-Rubbermaid, his aggressive strategy included taking over the Meccano brand in 2013. Gadbois’s approach has resulted in 25 per cent annual sales growth for the past three years. Last year he took Spin Master public, hoping for greater visibility on a global scale.
How did you address flagging sales?
We aligned strategic resources with our four key growth strategies. The first is innovation: we are developing products for 2019 and have teams scouring the globe for advancements in technology. Second, we develop one or two entertainment franchises every year. For example, Paw Patrol is broadcast in more than 160 countries and is one of the highest-rated preschool shows globally. Third, we increase international sales, recently opening offices in Australia and the Czech Republic. Finally, we leverage our global footprint through strategic acquisitions.
What’s running a toy firm like?
I have one of the greatest jobs in the world. We always push the boundaries of innovation, creativity and fun.
How do you adapt to new technology?
We embrace great ideas and we infuse heritage brands with our trademark innovation. There’s an entrepreneurial spirit that is in our dna. Hatchimals, for example, hatch through touch-activated technology and evolve the more kids play with them. Meccano features the Meccanoid personal robot, which blends traditional engineering with robotics. Zoomer Chimp has lifelike movements, realistic sounds and advanced voice-recognition technology; the more kids play with it, the more it learns.The wow factor must always be present.
Do you have a favourite toy?
The ones that I can enjoy with all three of my boys. There’s nothing more satisfying than bringing the fun home and sharing what I do every day.
What’s in Santa’s sack?
1. Paw Patrol Air Patroller Plane
2. Meccano Meccanoid G15KS Personal Robot
3. Air Hogs Axis 200i: indoor helicopter
Rolling the dice on the popularity of boardgames
Karsten Schmidt has been chairman of Ravensburger – a German firm making puzzles, boardgames and children’s books – for 15 years. It has 2,000 employees and revenue of €440m, growing through the acquisition of wooden-toy maker Brio and games manufacturer Wonder Forge.
How has the toy industry changed?
We’ve gained a parallel market – video-games – and they are growing in tandem. But all the digital disruption has affected the video-game market as games went from consoles to mobile, and from paid-for games to in-app payments.
Why is the toy industry different?
With our children’s products it’s all about the irreplaceable tactility: picking up, putting down and slotting into place.
Do families still play boardgames?
Smartphones and iPads make it difficult to bring children and parents together. Boardgames are a social event when a child has their parents all to themselves.
Is there a conscious return to these slower forms of entertainment?
It comes in waves but it is linked to crises, when people seek the cocoon of the family. For the past two years, traditional games have grown because there is so much uncertainty, from Trump to Brexit.
What’s in Santa’s sack?
1. Labyrinth, a board game
2. Electronic board game Schnappt Hubi!
3. My Fire Engine, a puzzle showing firemen tackling a burning building