By Brian Torney,
New Business Group at Hasbro
“Are we dinosaurs?” I asked. A few hundred sets of eyes stared back at me, unblinking, as if to dare me to keep going. They were silent, their breath stolen away. “Toys and games are changing, it is undeniable,” I said at PlayCon in Washington DC. “The very way we play is changing as fast as technology does.” Today’s trending platforms like mobile, tablet, social, and SmartTV are changing the game board quicker than you can roll a dice. Traditional toys aren’t outmoded or antiquated, but it should come as no shock that digital first kids are playing digital-first games. U.S. based board game sales between 2011-2012 dipped 8%. Over 100 million players downloaded Angry Birds Space in 2012. As the more nimble, glossy and glowing competition demonstrates continued revenue growth; toys and games suffer category declines only offset by new sales from emerging territories. Are the innovators of the toy industry getting left in the dust…or ash of the late Cretaceous? Are we becoming dinosaurs?
Once upon a time, dinosaur-themed toys were thought to be perennial legacy products for toy and game manufacturers. After all, every little kid loves dinosaurs, right? Apparently not so: few major manufacturers currently produce dinosaur products. I spent an evening discussing toys with one of my favorite creatives in the toy and game industry, Hasbro’s Senior Art Director of packaging Adam Pagano. I had recently learned that Adam led packaging for the Jurassic Park product line. I questioned him on the reasons for dwindling Jurassic Park offerings; after all, kids love dinos. Adam described for me something akin to an extinction event. Sure, Hasbro would remain in support of the Jurassic Park product. And a forthcoming new feature film and Blu-ray release might even sweeten the pot, but largely kids weren’t clamoring for dinosaurs anymore unless supported by a major feature film release.
I assumed kids would always seek playthings to quench their seemingly innate need for monsters and mayhem. After all, when Jurassic Park hit theaters in 1993, the Steven Spielberg film became the highest-grossing motion picture of all time, engulfing an aweinspiring $914 million worldwide. Kids have been fascinated by these fossilized beasts for the entirety of the 20th century, dating back to 1912 when Winsor McCay’s animated film Gertie the Dinosaur and Arthur Conan Doyle’s book The Lost World widened kids’ eyelids. Willis O’Brien’s stop-motion dinosaurs in King Kong; a multitude of Ray Harryhausen film projects; countless pulp and comic book stories; and Sinclair Oil’s lovable green brontosaurus mascot just made kids tingle more at the terrible thought of those gnashing jaws, thrashing tails, and stomping feet. In the 1970s-1990s, various high profile toy manufacturers created dinosaur product lines. A 1980s kid, I collected Dino-Riders, Dinotopia, Jurassic Park, and literally hundreds of dinosaur figurines. What changed? What, like a crashing asteroid, disrupted the popularity of a traditional toy category like dinosaurs?
Perhaps newer media such as video games presented a more monstrous venue for the mayhem. Toy manufacturers started worrying that video game consoles would replace traditional physical toys when Atari introduced Pong in 1972. 1980s news media predicted extinction for the toy industry, championing Atari, Nintendo, Intellivision, and other platforms. The video game industry was generating over $5 White Paper 2012 billion in annual revenue in 1981. By 2012, console-based video game revenues have already started catching up with the toy industry; achieving worldwide annual revenue north of $67 billion (today’s video game industry faces similar problems as the toy and game industry in the wake of non-platform social and casual games). Of course, the predicted decimation of the toy and game industry never occurred. Worried survivalists became wary competitors. But who better to innovate the fledgling video games of the 1960s and 1970s than the play experts generating board games and other play experiences? Shockingly, the early instigators of the video game industry were computer programmers and hardware technicians with no experience creating games around play patterns. It was as if the innovators of the toy industry went out of their way to avoid involvement in the emerging gaming technologies.
Harvard Business School business administration professor Clayton M. Christensen coined a term that aptly describes the introduction of video games: Disruptive Innovation is “an innovation that creates a new market by applying a different set of values, which ultimately (and unexpectedly) overtakes an existing market.” In the case of the video games and toys, traditional leaders were engaged in sustained innovations (those innovations that do not create new markets and value networks) based on tried-and-true manufacturing processes, long-time used supply chains, and existing employee competencies. Software developers and hardware technicians with no play industry experience devoted energy and funds to producing new products for a totally nonexistent audience and market. Rarely were the technologies chosen by early video game publishers all that cutting edge; Pong, homely with its two-dimensional graphics, certainly wasn’t going to wow anybody for its design intricacies at a time when toy and game manufacturers were experimenting with more and more complex physical forms. But nimble, small-scale publishers were not beholden to the same revenue needs and production processes as established toy and game manufacturers. By the time manufacturers realized the unforeseen demand, publishers like Atari and Nintendo already had achieved dominance in the space. According to Christensen’s seminal book, The Innovator’s Dilemma, technology evolves in fits and starts, expansions and extinctions. The toy and game industry missed a vital opportunity when leaders disregarded digital play platforms. Those survivalists were saying “it’s okay, we can survive!” when they should have been saying “let’s evolve!” Don’t stop creating the successful products you are creating, but embrace new avenues as well.
The emergence of casual gaming in the early 2000s is a disruptive innovation directly comparable to that of console video games. As Facebook use, mobile smartphones and tablets proliferated, video game consoles and board game revenue uniformly dipped. Facebook based social games like FarmVille and The Sims demonstrated that users preferred lower learning curves, shorter gameplay, digital social interaction, and availability on a platform or device they use throughout each and every day for a variety of purposes. Today’s most popular video games require the purchase of an expensive console: Microsoft’s X-Box 360, Sony’s Playstation 3, and Nintendo’s Wii and handheld DSi. Manufacturers reap almost no direct revenue from the sale of these units, without which versatile game catalogues are useless disks. Ease and accessibility of purchase and play is a big factor in the still growing audience for casual, social, and mobile games, at odds with the now long-established purchase and play process of the consoles. Smart phones and tablets are quickly becoming necessary items in the lives of consumers worldwide; why buy a costly unit for gaming when you have a costly unit that does everything?
Casual game experiences like Angry Birds, Bejeweled, Words With Friends, and Draw Something are easy to play. Not only that, but gameplay duration is cut down to 1-3 minute intervals. These intervals take place more frequently but at drastically shorter engagement times than traditional video games and board games. Users’ attention spans are changing, but they love to come back for more of what they like.
Vanishing communication barriers affect traditionally social board game experiences. It is no longer necessary to be in the same room as family and friends to enjoy a bit of competition, combat, and camaraderie. Facebook, game center apps, and various other in-app tools negate the real-time scheduling necessity of a board game.
But are the days of board games and video games numbered? Need these established, successful gameplay avenues face extinction? This isn’t the first time a consumer product segment, industry, or medium was threatened by emerging technologies. Think personal computers. Think Model T Fords. Think Printed books. Think TV. When the glories of television were unveiled at the New York World’s Fair in 1939, media immediately scheduled the film industry’s swan song. But the realities of continuous televised programming intervened and television networks were forced to license and acquire existing film content to fill their programming schedules. Not only did television fail to kill the theatrical film industry, it provided an ancillary revenue stream. Today, television rights for major feature films command tens of millions of dollars. Film sprouted feathery wings.
Thinking of dinosaurs, evolution, and birds, there is no precedence to indicate the toy and game industry will disappear. But failure to generate both sustained and disruptive streams of innovation is deadly for the industry. The industry must trade survivalist routine for a combination of cautious optimism and futurist thinking. With physical toys and games, video games, online, mobile, social, and other emerging platforms, more people around the world are playing than ever before. Like dinosaurs, toys and games must continue to evolve in a new and breath-stealing epoch.