Even though last year was a banner year for toy sales connected to movies, almost all of that was related to "Star Wars: Episode III - Revenge of the Sith." It brought in close to $500 million in toy sales.
But even the Star Wars franchise doens't guarantee success as 1999 proved when Hasbro (HAS) sent millions of dollars of Star Wars merchandise out to stores before the opening of "Episode I: Phantom Menace," only to see inventory sit there because the movie didn't resonate with the fans.
Sean McGowan, a toy analyst with Harris Nesbitt said "It's unlikely that even if movies get off to a great start, that it's going to generate toy sales as long as Star Wars did last year."
Toy makers have signed up for potential hits like Sony (SNE) Pictures' "The Da Vinci Code," Warner (TWX) Bros.' "Superman Returns," Walt Disney (DIS) Co. and Pixar's (PIXR) "Cars," and Disney's "Pirates of the Caribbean: Dead Man's Chest."
While some analysts say there is the potential for some strong sales this year, they added that because of changes in the film industry and the tastes of children means that the chance of duplicating the sales from the "Star Wars" franchise are slim.
I have to admit that I get puzzled by the hype that toy companies respond to in this area as they have been burned many times, and it is considered more like gambling than it is marketing. I suppose that if they have certain funds set aside for their promotional efforts and they use the majority of it on these types of deals, that the money in their eyes is already spent, so it's not lost.
To me the companies that will probably make out the best in these types of deals are those like Zizzle LLC, who are contracted to make toys for some of the companies represented. They should get their money either way. The toy companies have to pay huge licensing fees just to get the right to throw the dice.
Do you think they should take such risks with the potential for huge losses?
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