Toy Doll Game Manufacturing in The US Industry Report

Toy, Doll & Game Manufacturing in the USMay 2015 1
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Game time: Despite recovering demand,

operators will face significant pricing pressures
IBISWorld Industry Report 33993
Toy, Doll & Game

Manufacturing in the US
May 2015
Zeeshan Haider
2 About this Industry
16 International Trade
34 Key Statistics
Industry Definition
19 Business Locations
34 Industry Data
Main Activities
Similar Industries
21 Competitive Landscape
Additional Resources
21 Market Share Concentration
34 Annual Change
21 Key Success Factors
3 Industry at a Glance
34 KeyRatios
35 Jargon & Glossary
21 Cost Structure Benchmarks

23 Basis of Competition
4 Industry Performance
24 Barriers to Entry
Executive Summary
25 Industry Globalization
Key External Drivers
Current Performance
26 Major Companies
Industry Outlook
26 Hasbro Inc.
11 Industry Life Cycle
30 Operating Conditions
13 Products & Markets
30 Capital Intensity
13 Supply Chains
31 Technology & Systems
13 Products & Services
31 Revenue Volatility
15 Demand Determinants
32 Regulation & Policy
15 Major Markets
33 Industry Assistance
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
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About this Industry

Industry Definition
This industry comprises companies

that manufacture dolls, doll
accessories, action figures, toys, games
Main Activities
The primary activities of this industry are
(including electronic), hobby kits and

childrens vehicles (except metal
bicycles and tricycles).
Manufacturing action figures

Manufacturing dolls, doll parts and doll clothing
Manufacturing stuffed toys
Manufacturing childrens automobiles
Manufacturing crafts and hobby kits
Manufacturing childrens and adult games
Manufacturing science kits
Manufacturing toy and hobby models
Manufacturing video game machines
The major products and services in this industry are

Baby carriages and childrens vehicles (excluding bicycles)
Dolls, action figures, toy animals and stuffed toys, including parts
Electronic toys and games (including home video games)
Models and crafts
Nonelectronic games and puzzles, including parts
Other nonelectronic, nonriding toys, including parts and pet toys
Similar Industries
33461 Recordable Media Manufacturing in the US

Operators in this industry manufacture electronic video game cartridges and reproduce video game
software.
33699a Motorcycle, Bike & Parts Manufacturing in the US
Operators in this industry manufacture bicycles and metal tricycles.
33992a Athletic & Sporting Goods Manufacturing in the US
Operators in this industry manufacture sports and athletic goods for children.
Additional Resources
For additional information on this industry

www.nam.org
National Association of Manufacturers
www.toyassociation.org
Toy Industry Association Inc.
www.census.gov
US Census Bureau
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Toy, Doll & Game Manufacturing in the US May 2015
Industry at a Glance
Toy, Doll & Game Manufacturing in 2015
Key Statistics
Snapshot
Revenue
Annual Growth 10-15
Annual Growth 15-20
Profit
Exports
Businesses
$1.9bn
-4.8%
-1.7%
573
$102.5m $1.6bn
Import penetration into the manufacturing

sector
Revenue vs. employment growth
% change
Hasbro Inc.
9.7%
20
0.36
10
0.34
0.32
-10
Market Share
0.30
-20
0.28
-30
-40
Year 07
09
11
Revenue
13
15
17
19
21
0.26
Year 07
09
11
13
15
17
19
21
Employment
SOURCE: WWW.IBISWORLD.COM
p. 26
Products and services segmentation (2015)
4.0%
Dolls, action figures, toy animals and

stuffed toys, including parts
Import penetration into

the manufacturing sector
4.0%
Baby carriages and children's

vehicles (excluding bicycles)
10.1%
Models and crafts
Trade-weighted index
Demand from hobby
and toy stores
Per capita disposable
income
16.9%
p. 4
Industry Structure
41.7%
Nonelectronic games and

puzzles, including parts
Demand from
department stores
Electronic toys and

games (including home
video games)
23.3%
Other nonelectronic, nonriding toys,

including parts and pet toys
Life Cycle Stage
SOURCE:
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SOURCE:
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Decline
Regulation Level
Heavy
Revenue Volatility
High
Technology Change
Medium
Capital Intensity
Low
Barriers to Entry
Medium
Industry Assistance
Low
Industry Globalization
High
Concentration Level
Low
Competition Level
High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 34
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Industry Performance
Executive Summary | Key External Drivers | Current Performance

Industry Outlook | Life Cycle Stage
Executive
Summary
Operators in the Toy, Doll and Game

Manufacturing industry have experienced
a challenging operating environment
over the past five years. Industry
operators manufacture discretionary
items, and demand for these products
represent a strong, positive correlation
with per capita disposable income,
consumer sentiment and available leisure
time. Most of these demand drivers took
a turn for the worse during the recession,
as consumer sentiment fell considerably,
due to high unemployment, a bleak
economic outlook and a fall in per capita
disposable income. Furthermore,
Despite
higher demand, toy manufacturers will

lower prices to stay competitive, hurting profit
products produced by industry operators
tend to overlap, causing manufacturers to
compete fiercely on price, with
consumers consistently seeking bargains.
Since price competition in this
industry is high, domestic operators
have been forced to reduce prices to
compete with cheap imports, sourced
from low-cost economies such as
China and Vietnam. However, as a
labor-intensive industry, imported
products have a significant advantage
when it comes to production costs. As
a result, domestic industry operators
have been forced to settle for lower
Import penetration into the

manufacturing sector
Growth in the volume of imported toys in
the United States has created intense
competition for domestic toy
manufacturers over the past five years.
Despite instances and perceptions of
inferior quality, imported toys have
become increasingly popular among
consumers over domestic goods due to
profit margins to compete with low-cost

imports, the prospect of which has
reduced the attractiveness of this
industry. Furthermore, many
companies in this industry have
completely disbanded US-based
production operations and shifted
production facilities to East Asia and
China, which has also reduced revenue.
Given the significant offshoring and
price competition from imports, which
are expected to account for 98.5% of
domestic demand in 2015, revenue is
expected to decrease at an annualized
rate of 4.8% to $1.9 billion, during the
five years to 2015, inlcuding an expected
increase of 7.9% in 2015 alone.
The industry is expected to perform
better over the next five years. This
recovery will be spearheaded by a new
and emerging trend of reshoring,
whereby companies relocate their
manufacturing operations back to the
United States, where there are lower
compliance and transportation costs and
a greater ability to respond to changes in
the market. Increasing labor costs in
China are also incentivizing this trend.
This phenomenon of reshoring, coupled
with improving conditions in the
domestic economy, will prevent industry
revenue from declining as rapidly as it
did in the past five years. Nonetheless,
revenue is expected to decline at an
annualized rate of 1.7% to $1.7 billion
over the five years to 2020.
their lower prices. Import penetration

into the manufacturing sector is expected
to increase in 2015, posing a potential
threat to the industry.
The trade-weighted index (TWI)
measures the strength of the US dollar
relative to the currencies of countries that
trade with the United States. A drop in
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the value of the US dollar leads to lower

relative export prices and higher relative
import prices, benefiting industry
revenue. Conversely, when the TWI rises,
there is greater import competition and
industry exports are relatively less
competitive in the global market. The
TWI is expected to increase in 2015.
Demand from hobby and toy stores
Regarded as specialists in the toy retail
market, hobby and toy stores are key
buyers of industry products. Hobby and
toy stores purchase an extensive range of
goods from industry manufacturers.
Therefore, an increase in demand for toy,
doll and game products from hobby and
toy stores translates to demand and
revenue growth for manufacturers. The
Hobby and Toy Stores industry is
expected to increase throughout 2015.
Per capita disposable income

Toys, dolls and games are discretionary
items so changes in disposable income
levels influence industry demand. A rise
in household disposable income increases
the propensity for customers to purchase
more industry products, causing a growth
in demand. Per capita disposable income
is expected to increase during 2015,
presenting a strong growth opportunity
for the industry.
Demand from department stores
Discount department stores, such as
Walmart and Target, have grown to
become leading retailers of childrens
toys. An increase in demand at the retail
level also leads to growth in demand for
toys at the manufacturing level. The
Department Stores industry is expected
to decrease in 2015.
Import penetration into the manufacturing

sector
115
0.34
105
0.32
95
Index
0.36

continued
0.30
0.28
0.26
Year 07
85
75
09
11
13
15
17
19
21
65
Year 07
09
11
13
15
17
19
21
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Current
Performance
The Toy, Doll and Game Manufacturing

industry has suffered over the five years to
2015, due to falling demand brought on by
poor economic conditions and increasing
competition from low-priced imports.
Imports have gained considerable cost
advantages over domestically produced
goods during the past five years due to
lower labor costs and significantly lower
environmental regulation abroad.
Imported toys have therefore become
significantly inexpensive compared with
domestically produced goods, and, as a
result, domestic industry operators have
cut down on their profit margins to remain
competitive. However, this reduction in
profitability also encouraged many industry
operators to shift production from the
United States to Asia and the Far East in
Diving demand
Demand in the Toy, Doll and Game

Manufacturing industry is primarily
influenced by economic conditions such as
consumer confidence and disposable
income levels. While consumer sentiment is
expected to climb in 2015, it experienced
steep declines during the recession, falling
22.1%. In addition, per capita disposable
income fell for the first time in nearly two
decades over the same period. Since then, its
recovery has been marginal and slow. These
factors forced consumers to curb spending
on discretionary items, including toys, dolls
and games. Many consumers who did
purchase industry-related products during
this time opted to seek out sales and
bargains online and at second-hand stores
rather than pay full retail prices.
As retail spending slowed, demand for
manufactured goods declined, with
revenue falling a staggering 30.5% during
the recession. Industry operators rely
heavily on demand from retailers,
especially with the onset of wholesale
bypass, which effectively eliminates
wholesalers from the supply chain and is a
growing trend among manufacturers. By
order to remain competitive. Many

industry operators had to exit the industry
altogether because they could no longer
compete with low-cost imports, which
caused industry establishments to decline
at an annualized rate of 0.7% to 577
locations over the five years to 2015. These
factors combined are expected to reduce
revenue at an annualized rate of 4.8% to
$1.9 billion in 2015; however, revenue is
expected to rise by 7.9% in 2015 due to a
substantial increase in exports stemming
from strong demand growth from Mexico.
According to data sourced from the United
States International Trade Commission
(USITC), industry-specific exports to
Mexico have increased 1011.5% year to
date, resulting in a 26.1% increase in
exports over the same period.
Operators
reliance on
retail demand resulted
losses during the recession
owning their distribution and retail outlets,
or by selling directly to third-party retailers,
manufacturers can better manage
production volumes and maximize profit
margins. Unfortunately, operators
increasing reliance on retail demand
resulted in painful losses during the
recession and immediately after, when
retail spending plummeted.
Fortunately, demand for toys, dolls and
games has been rebounding as the economy
has gradually recovered. In 2010, consumer
sentiment and household disposable income
rose, encouraging consumers to increase
spending that they withheld at the height of
the recession. Revenue for the Hobby and
Toy Stores industry (IBISWorld report
45112) also increased in 2010 and has been
on the rise ever since. Such increases in
downstream demand are expected to bolster
demand at the manufacturing level.
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Produced in China
Toy recalls and new

regulations
In addition to falling demand, competition

from low-priced imports has presented a
significant challenge to the industry. In
2010, imports accounted for 97.1% of
domestic demand and are expected to be
$18.5 billion or 98.5% of domestic demand,
declining at an annualized rate of 4.9% over
the five years to 2015. The growing share of
Chinese imports has primarily driven this
phenomenon. Due to the countrys relaxed
labor and environmental laws, Chinese
manufacturers enjoy lower production costs,
allowing them to pass cost savings on to
domestic retailers, and ultimately
consumers. This trend has placed significant
pricing pressures on toy manufacturers in
the United States. Even though imports
have declined slightly over the past five
years, they continue to represent a
significant proportion of domestic demand
and present a major threat to the domestic
industry. Furthermore, exports, which are
expected to account for almost 85.0% of
revenue or $1.6 billion in 2015, have also
declined at an annualized rate of 1.0% due to
a strengthening dollar. In order to maintain
sales and remain buoyant in a contracting
industry, US operators have been forced to
reduce markups over the past five years,
resulting in significant declines in
profitability over most of the past five years.
However, a recent decline in oil prices if
expected to reduce the price of raw materials
and energy and transportation related over

heads for domestic manufacturers, thereby
improving margins. Overall, IBISWorld
expects profit, measured as income before
interest and taxes, to account for 5.5% of
revenue in 2015, up from 3.8% in 2010.
As US factories struggle with low
profitability, major players have either
relocated their facilities to China or other
overseas destinations, or have outsourced
production to third-party manufacturers to
take advantage of lower overhead and labor
costs. Mattel and Hasbro are examples of
major industry players following this trend.
According to their respective annual
reports, a significant portion of Mattel
products are manufactured in companyowned facilities in China, while a majority
of Hasbro production is outsourced to
Chinese factories. Offshoring, coupled with
falling demand, has caused many domestic
operators to close facilities and reduce
workforces. In the five years to 2015,
employment has fallen at an annualized of
2.8% per year to 7,621 workers.
An increase in outsourcing and

offshoring has created both opportunities
and disadvantages for domestic
operators. Relocating allowed companies
to achieve more cost savings, however
relaxed product standards and
regulations in overseas facilities led to a
decline in product quality. This decrease
began to negatively affect the industrys
bottom line as major problems emerged.
Since 2008, the US government has
recalled a plethora of Chinesemanufactured toys due to unsafe levels of
lead found in paint, while others were

recalled for choking hazards presented by
loose magnets. These recalls created
considerable losses for industry
operators, including Mattel, which had to
recall its Barbie and Fisher-Price brands.
Similarly, Hasbro reported losses from
the recall of its Easy Bake Ovens. In
addition to the immediate losses incurred
as a result of having to pull products from
shelves, these recalls also tarnished
consumer confidence and trust in these
respective brands.
To
remain buoyant in
a contracting industry,
operators were forced to
reduce markups
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Toy recalls and new

regulations
continued
As a result of these sweeping recalls,

the Consumer Product Safety
Commission implemented new
legislation in 2008 to protect children
from unsafe lead levels, choking hazards
and other chemicals that may cause
illness. This law, known as the Consumer
Product Safety Improvement Act
(CPSIA), bans manufacturers from
producing or selling childrens products
that do not meet the enhanced safety
regulations. In addition, companies are
required to test products for lead and
other harmful chemicals.
Although CPSIA provided peace of mind
to consumers, it has adversely affected the
industry. Many manufacturers, lacking the
resources to test every item for compliance,
have simply disposed of inventories that
Changing tastes
Children, aged nine and younger, are

traditionally regarded as the key buying
market for toy manufacturers. As a result,
the ranges of toys produced have been
systematically geared toward specific age
groups within that prime market.
However, manufacturers began to
experience declining sales within this key
market in the early 2000s. Operators
subsequently acknowledged that demand
was being affected by an age
compression phenomenon, whereby
children were outgrowing toys at a
younger age and demanding more adultlike merchandise, such as personal
computers and DVD players. While the
economic downturn caused a temporary
hiccup in demand for tech-centric toys,
which are often more expensive than
traditional toys, a growing proportion of
children continues to favor electronic toys.
In response to changing market
conditions, manufacturers began to focus
may not meet new regulations. This

disposal cost has created a significant
financial burden for operators across the
industry. The Toy Industry Association
(TIA) publicly estimates this cost to be
roughly $2.0 billion.
However, the problems with imported
toys and their subsequent costs have also
prompted a major shift toward relocation
to the United States. KNex Brands LP, a
family-owned company based in Hatfield,
PA, is one of the industrys players
moving production back to the United
States. This trend will continue as
manufacturing costs rise further in China
and manufacturers seek alternative
strategies to keep production costs low.
Reshoring is expected to benefit the
domestic industry in the future.
In
response to a changing
market, operators
focused on electronic and
interactive toys
on electronic and interactive toys. In
addition, operators have invested
millions of dollars in attempts to spur
more demand for traditional toys by
bringing them into the 21st century. For
example, Mattel debuted its Barbie
Digital Dress Doll at the New York Toy
Fair in February 2013. The doll features a
dress with an LED touch screen on which
children can create custom designs.
Other plans for Barbie in 2013 included
three full-length animated features, as
well as a comprehensive digital
experience, including online games and
Barbie webisodes.
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Industry
Outlook
Despite challenges faced by local

manufacturers over the past five years,
IBISWorld expects the industry will fare
better during the five years to 2020.
Nonetheless, revenue is projected to
decline at an average annual rate of 1.7%
to $1.7 billion over the next five years,
with a 1.9% decline expected in 2016. As
economic conditions improve,
consumers will likely increase their
discretionary spending, which will
subsequently increase demand for toys,
dolls and games.
However, the long-term outlook for
the industry is not encouraging. US
manufacturers will continue to face
increasing competition from low-cost
imports and vie for contracts with a
shrinking number of retailers. Given the
limited amount of shelf space in stores,
retailers will place significant pricing
pressures on domestic operators to lower
their markups, or they will give up shelf
space to imported goods. Consequently,

many industry operators will be unable to
survive in this competitive environment.
IBISWorld expects that the number of
industry establishments will decline at an
annualized rate of 0.6% to 560 over the
five years to 2020.
Downstream demand
picks up
As the US economy recovers, consumer

sentiment and per capita disposable income,
two key drivers of industry demand, are
expected to increase at annual rates of 2.5%
and 2.4%, respectively, over the next five
years. Renewed confidence in the economy
and higher discretionary spending are
forecast to drive retail purchases, as
households begin to spend on products that
they delayed buying during the recession. As
a result, retailers will likely increase the
volume of purchases from toy
manufacturers, boosting industry demand.
Advances in product design and the

introduction of new electronic and
interactive toys will drive industry growth
through 2020. In the past five years,
growth in demand for these products was
limited by uncertain economic conditions
in the earlier part of the period. However,
with improving economic conditions,
consumers will have more discretionary
funds at their disposal during the outlook
period. With increased spending on
electronic toys, consumer demand will
again be satisfied.
Increasing pressure
from retailers
In the Toy, Doll and Game

Manufacturing industry, wholesalers
were traditionally viewed as the key
market for manufacturers because they
were able to efficiently distribute toys to
a large number of US retailers. However,
an increasing number of manufacturers
have internalized distribution functions

and have begun supplying goods directly
to retailers. Wholesale bypass greatly
benefits industry operators because it
allows them to charge higher prices for
goods. In addition, manufacturers are
able to gain greater control over
Industry revenue
10
% change
0
-10
-20
-30
-40
Year 07
09
11
13
15
17
19
21
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Increasing pressure
from retailers
continued
production volumes. However, the

competitive nature of the industry has
led a small number of retailers, such as
Walmart, Toys R Us and Target, to
gain control over a large portion of the
retail market.
Unfortunately for operators,
dependency on a few large toy retailers is
expected to continue through 2020,
exposing industry operators to greater
China to lose its

advantage
Due to rising labor costs in China, which

have reduced the appeal of offshore
production, industry operators are
increasingly moving production back to the
United States. US-based production
reduces freight and compliance costs for
many manufacturers, as products from
China are frequently recalled due to health
hazards and noncompliance issues. In
March 2013, The Wall Street Journal
reported that industry operator, KNex, was
aiming to relocate its production facilities
back to the United States due to rising costs
in China. Producing locally also provides
manufacturers with greater control over
their inventories and designs, and allows
them to quickly respond to changes in
domestic demand, which is critical to
remaining profitable in the industry.
While China continues to enjoy major
advantages as compared with the United
States, US industry operators are
planning to increase their capital
expenditures and alter their product
designs so as to make their production
and packaging process as automated as
possible. To achieve this, KNex has
bought a Baxter robot from Rethink
Robotics Inc., which performs simple
packaging tasks to aid in the production
of toys in its Hatfield, PA, facility. Similar
investments in capital equipment will
enable the industry to benefit from
reduced labor costs and reliance on
imports. IBISWorld expects that
employment in this industry will fall at
risks. Due to pricing pressures exerted on

manufacturers to achieve maximum cost
savings, remain competitive and win
supply contracts, industry operators will
be forced to lower prices and absorb
losses. Consequently, IBISWorld expects
that average profit margins will decline,
in spite of higher sales of high-margin
electronic toys. Profit is expected to
account for 5.1% of revenue by 2020.
Due
to rising labor costs

in China, operators are
reshoring production
an annualized rate of 1.1% to 7,213
workers over the five years to 2020.
In spite of the trend toward greater
reshoring, IBISWorld expects import
penetration in this industry will keep rising.
A stronger dollar and potential free trade
agreements with East Asia and Vietnam in
particular, will encourage domestic
retailers to import toys at an even lower
cost. Consequently, IBISWorld expects
imports to increase at an annualized rate of
1.6% to $20.1 billion in 2020 and they are
anticipated to account for 99.1% of
domestic demand for the same year.
Exports are also expected to decline
further despite a temporary increase in
2015. As the US dollar appreciates, US
exports become less competitive. The
dollar is expected to appreciate 3.2% per
year, over the next five years, which is
expected to reduce exports at an annualized
rate of 0.6% to $1.5 billion. Nonetheless,
despite a rising dollar, the importance of
exports is expected to increase over the
next five years as operators seek demand
on the international market for highquality domestically manufactured toys.
Exports as a share of revenue are expected
to increase from 85.0% in 2015 to an
estimated 89.9% in 2020.
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Life Cycle Stage
The industry is expected to grow at a

slower rate than the economy
The industry is facing a demographically shrinking market
Increased levels of offshoring and outsourcing are
causing the number of establishments to fall
% Growth in share of economy
Many industry products are becoming obsolete as

children demand more sophisticated and digital toys
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
High growth in economic

importance; weaker companies
close down; developed
technology and markets
15
Key Features of a Decline Industry

Revenue grows slower than economy
Falling company numbers; large firms dominate
Little technology & process change
Declining per capita consumption of good
Stable & clearly segmented products & brands
10
Quantity Growth
Many new companies;

minor growth in economic
importance; substantial
technology change
Hobby & Toy Stores
Cardboard Box & Container Manufacturing

Motorcycle, Bike & Parts Manufacturing
Toy & Craft Supplies Wholesaling
Toy, Doll & Game Manufacturing
-5
Decline
Shrinking economic
importance
-10
-10
-5
10
15
20
% Growth in number of establishments

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Industry Life Cycle

This
industry
is D
eclining
The Toy, Doll & Game Manufacturing

industry is in the declining stage of its life
cycle. Although decline in industry
revenue is expected to decelerate during
the five years to 2020, IBISWorld expects
that industry value added (IVA), which
measures an industrys contribution to
GDP, will decline at an annualized rate of
1.9% over the ten years to 2020. This
indicates a slow rate of growth, as
compared with an expected growth rate of
2.5% for GDP during the same period.
Enterprises in this industry will continue
to decline as the industry consolidates and
operators exit the industry in response to
a high level of import penetration. A rise
in imports is expected to continue, aided
by a strengthening US dollar. Together,
these trends will reduce the number of
establishments in this industry by 0.7%
during the ten years to 2020.
This industrys markets are also
facing an imminent demographic and
psychographic shift. In 2009,
individuals under the age of 20
accounted for 27.3% of the total US
population. According to the US Census
Bureau, this number shrunk to 26.7% in
2012 (according to the latest available
information) and is expected to decline
further in the coming years. In addition,
children have begun preferring digital
and interactive toys to traditional ones
at a much younger age. They are

outgrowing toys more quickly and are
turning to tablets, gaming consoles and
other forms of entertainment. Hence,
this industry is facing an increasingly
shrinking market, which will contribute
to its decline in the long run.
New products and technologies are
regularly being launched to keep the
market interested and the industry
relevant. Of special importance are
licensing deals with film studios such as
Disney, and many industry operators
time new product launches to coincide
with the releases of Disney movies
based on these products. Capital
investment is being made to render this
industry more automated and
productive. As a result of increased
reshoring, many firms are looking to
design products in more cost-effective
ways, aiming to reduce labor and inputs
costs. However, IBISWorld believes
that widespread reshoring and vast
technological improvements will not
occur quickly enough to help this
industry recover completely. As
childrens interest in toys begins
decreasing even more quickly, families
have less leisure time and the industrys
main market shrinks demographically,
this industry will eventually continue
on its downward trajectory.
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Products & Markets
Supply Chain | Products & Services | Demand Determinants

Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES

42392
Toy & Craft Supplies Wholesaling in the US

Toy and Craft Wholesalers are major customers for the Toy, Doll and Game Manufacturing
industry and are regarded as the primary link between manufacturers and the retail market.
45112
Hobby & Toy Stores in the US

Hobby and Toy Stores are able to purchase a range of merchandise directly from
manufacturers whereby they bypass traditional wholesale channels.
45322
Gift Shops & Card Stores in the US

Operators in Gift Shops and Card Stores purchase a range of merchandise for resale in novelty
stores.
KEY SELLING INDUSTRIES
Products & Services
32221
Cardboard Box & Container Manufacturing in the US

Operators in this industry supply packaging for toys, dolls and games.
32614
Polystyrene Foam Manufacturing in the US

This industry supplies pads, shaped cushioning, polystyrene foam and products used for
packaging dolls, toys and games.
32619
Plastic Products Miscellaneous Manufacturing in the US

This industry supplies plastics used in the manufacture of toys, dolls and games.
32629
Rubber Product Manufacturing in the US

This industry supplies rubber products, such as rubber tubing, used to manufacture toys, dolls
and games.
33121
Metal Pipe & Tube Manufacturing in the US

This industry supplies metal parts used to manufacture toys, dolls and games.
Electronic toys
Electronic toys make up the largest
product segment within the Toy, Doll
and Game industry, and are expected to
generate an estimated 41.7% of total
industry revenue in 2015. This product
segment includes electronic pets,
hand-held games, radio-controlled toy
cars and internet plug-and-play games.
Over the past five years, this product
segment has grown in response to
changing consumer demand. Kids
between the ages of eight and 12 are
increasingly demanding more
sophisticated toys, such as cell phones,
laptops and learning-oriented video
games. While youth-oriented electronic
toys continue to grow in popularity, this
product segment was badly hit during the
recession, as unemployment shot up and
disposable income dipped for the first
time in nearly two decades. Unfortunately,
the high price tags on many of these toys

remain an obstacle for many cashstrapped parents; therefore, growth in
revenue derived from the electronic
segment of the Toy, Doll and Game
industry is expected to remain tepid until
a substantial economic recovery takes
place. However, upon rebounding from
the economic downturn, this product
segment is expected to grow in line with
consumer demand.
Board games, puzzles and
other nonelectronic toys
Other nonelectronic toys, such as board
games, puzzles, collectible card games,
building blocks and related parts and pet
toys will account for about 40.2% of
industry revenue in 2015. However, this
product segment is forecast to lose ground
in the long term, as children increasingly
gravitate toward high-tech toys. While
WWW.IBISWORLD.COM
Products & Markets
Products & Services

continued
Products and services segmentation (2015)
4.0%
Dolls, action figures, toy animals and

stuffed toys, including parts
10.1%
Models and crafts
4.0%
Baby carriages and children's

vehicles (excluding bicycles)
41.7%
16.9%
Electronic toys and

games (including home
video games)
Nonelectronic games and

puzzles, including parts
23.3%
Total $1.9bn
Other nonelectronic, nonriding toys,

including parts and pet toys
electronic products are favored in the long

run, revenue from this product segment
has remained somewhat strong
throughout the recession, as opposed to
the electronic toys segment. As a share of
industry revenue, this product segment
actually grew during the recession. In
response to rising unemployment and a
drop in disposable income levels,
consumers opted for relatively less
expensive nonelectronic toys. Additionally,
increasing purchases of toys for pets have
also given a boost to this segment.
Models and craft kits
Models and craft kits, which are forecast
to comprise an estimated 10.1% of
revenue in 2015, are the third-largest
product segment within this industry.
Products within this segment include
childrens art and painting supplies,
coloring books, science kits and models
cars, airplanes and rockets. While
demand for these products declined
during the recession, these products have
remained relatively stable as a share of
industry revenue due to their traditional
and well-established market and relative
cost-savings as compared to electronic
toys. In the five years to 2020, the share
of revenue generated by sales of models
and craft kits will increase marginally as
economic conditions continue to improve

and consumer spending increases.
Dolls and action figures
Dolls and action figures will likely account
for 4.0% of industry revenue in 2015.
While the percentage of revenue generated
by these products is small, this product
segment has remained strong over the
past five years because of its low price
point and widely recognized brands, such
as Barbie, American Girl and G.I. Joe,
retaining their popularity. Additionally,
these products have experienced a boost
in sales through licensing and crosspromotions with motion pictures. For
example, major company Hasbro Inc. has
in place a licensing agreement with Marvel
Entertainment to manufacture dolls,
action figures and other toys based off of
popular Marvel superheroes, such as
Spiderman, Iron Man, X-Men, the Hulk,
Thor and Captain America. Hasbro also
owns the rights to produce Star Wars toys,
as a result of Disneys purchase of Marvel
Entertainment in 2009 and Lucasfilm Ltd.
in 2012. Similarly, Mattel Inc., another
major player within the industry, has a
licensing agreement with DC
Entertainment Inc. to manufacture
Superman, Batman and other toys based
off of DC Comic superheroes. Major
WWW.IBISWORLD.COM
Products & Markets
Products & Services

continued
industry players experience spikes in dolls

and action figures sales when comic book
character storylines are successfully
adapted to high-grossing motion pictures
and video games. Over the next five years,
the share of revenue generated by dolls
and action figures sales is forecast to
remain strong.
Baby carriages and childrens vehicles
Baby carriages and childrens vehicles are
expected to account for 4.0% of revenue in
2015. These items are characterized as

nonelectronic. There is significant import
penetration in both these products and there
is little roomleft for further offshoring.
However, international manufacturers have
caught up with the domestic ones in terms
of quality and durability with a much more
competitive price. Consequently, demand
for domestically manufactured baby
carriages and childrens vehicles has
declined over the past five years, reducing its
share of revenue.
Demand
Determinants
Demand for toys, dolls and games is

linked to trends in real household
disposable income, changes in product
design, advances in technology, consumer
preferences and seasonal fluctuations. Of
these, changes in disposable income have
the greatest impact on demand for toy,
doll and game products. As the level of
real household disposable income
increases, consumers enjoy greater
purchasing power and are able to demand
a broader range of industry products from
retailers. The increase in demand at the
retail level translates to demand growth
for manufacturers.
Consumer preference plays a vital role in
determining demand for toy, doll and game
products. As sophisticated toys have gained
popularity, electronic products have
become a favorite with customers. While
electronic toys continue to grow in
popularity, the amount of time children
spend playing with these devices has come

under scrutiny. Manufacturers have
responded to parental concerns by
incorporating educational elements into
games. However, technologically advanced
toys, such as flying helicopters and online
games, often require special attention or
supervision. Parents who spend less time
supervising their children may opt for more
traditional toys that their children can
safely play with by themselves.
Demand for industry merchandise is
largely seasonal. Over 40.0% of toy, doll
and game retail sales occur in the fourth
quarter, in the build up to the holiday
season. Concurrently, manufacturers
experience their highest product demand
leading up to the winter season.
Seasonality for toys is exemplified by
product types: outdoor games in spring,
travel games for summer vacations and
board games for long winter nights.
Major Markets
Exports
Exports make up the largest segment,
accounting for an estimated 85.0% of
industry revenue in 2015. This segments
proportion of revenue has increased over
the past five years, from 70.0% in 2010. In
the aftermath of the financial crisis, the
US dollar initially weakened, making US
products more competitive in the
international market. Furthermore, due to

extremely significant import penetration
in this industry, US manufacturers
turned to international markets, such as
Canada and Mexico. Given their
proximity to the United States, these
neighboring countries allow for cheaper
transportation costs and more favorable
trade conditions under the North American
WWW.IBISWORLD.COM
Products & Markets
Major Markets
continued
Major market segmentation (2015)
9.8%
Mass merchandizers
2.0%
Wholesalers
Total $1.9bn
Free Trade Agreement. However, as the
dollar began to strengthen from 2011
onward, exports began decreasing, with this
trend expected to continue.
Retailers
This segment makes up an estimated
13.0% of industry revenue in 2015.
Retailers include toy and hobby stores,
electronic retailers and mass
merchandiser stores, such as Walmart
and Target. Over the five years to 2015,
revenue in this segment has experienced
some growth due to the rising prevalence
of wholesale bypass. By purchasing
directly from manufacturers, retailers
have been able to better control costs,
operating margins and product
availability, thereby increasing their
inventory sourcing from manufacturers.
Manufacturers have also benefited from
this trend. By being in direct contact with
International Trade
Imports
The influx of imported toy, doll and game
products into the United States has
significantly altered the domestic market
during the past five years. Imported toys
and games from Asia have increased
competition within the industry. This has
3.2%
Hobby and
toy stores
85.0%
Exports
the end-user market, they have been able

to meet changes in order volumes more
efficiently, especially during peak selling
periods, such as the holiday season. Mass
merchandisers are expected to generate
9.8% of revenue within this segment,
while hobby and toy stores are expected to
generate 3.2% of revenue in 2015.
Wholesalers
Accounting for an estimated 2.0% of
industry revenue in 2015, wholesalers
purchase toys, games and dolls from
manufacturers for resale to various
retailers. Revenue has decreased over the
past five years due to the growing
practice of wholesale bypass and falling
consumer confidence in the economy.
However, with a major influx of lowercost, foreign-made toys being imported,
wholesalers role in the distribution
chain has moderately strengthened.
created a volatile domestic market for US

manufacturers, who have had to compete
with lower-cost producers overseas.
Chinese operators enjoy more relaxed
labor and environmental regulations,
allowing them to produce goods at a
fraction of the cost of US production.
WWW.IBISWORLD.COM
Products & Markets
Level & Trend

xports in the
E
industry are H
igh
and S
teady
Imports
in the
industry are H
igh
and D
ecreasing
Total imports in 2015 are expected to

reach $18.5 billion.
Most industry imports come from
China, accounting for 88.7% of total
imports in 2015. However, this number
has been static since 2010 and IBISWorld
expects that it will decline as
manufacturing costs in China rise and
industry operators look elsewhere to gain
a competitive advantage. Other important
trading partners include Mexico (3.8%),
Indonesia (1.5%) and Vietnam (1.3%).
Despite a high level of imports, this
market segment has not been immune to
the effects of the recession. In the five years
to 2015, the value of imports fell at an
average annual rate of 4.9%. This drop is
the result of a booming 2007, during which
imports rose 28.3%, alongside a slower but
continuously strong 2008, before the
market segment fell significantly in 2009.
In the five years to 2020, imports are
expected to grow an average of 1.6% per
year, as economic conditions improve and
domestic demand picks up.
Exports To...
Industry trade balance

10
0
$ billion
International Trade
continued
-10
-20
-30
Year 07
Exports
09
11
13
Imports
3.2%
12.1%
Canada
17
19
21
Balance
Exports
Exports of industry products are
estimated to total $1.6 billion in 2015,
marking a 1.0% average annual decline
since 2010. In 2015, exports are expected
to account for 85.0% of industry revenue.
This seemingly steep decline reflects
drop-offs from the extreme growth of the
mid-2000s, when exports grew by double
Imports From...
3.8% 1.3%
Vietnam
4.7% Mexico
Paraguay
15
Other
1.5%
Indonesia
3.4%
United
Kingdom
18.4%
Other
62.9%
Mexico
88.7%
Year: 2015
Total $1.6bn
SIZE OF CHARTS DOES NOT REPRESENT ACTUAL DATA
China
Total $18.5bn
SOURCE: USITC
WWW.IBISWORLD.COM
Products & Markets
International Trade
continued
digits. This growth was primarily driven

by a triple-digit increase in trade levels
with Mexico during the period and was
unfortunately short-lived, as exports fell
drastically in 2008.
Canada, Paraguay, Mexico and United
Kingdom are expected to remain major
export destinations in 2015, accounting for
12.1%, 3.2%, 62.9% and 3.4% of total
industry exports, respectively. Exports to
Canada and Mexico, in particular, remain

strong, as these countries benefit from their
proximity to the United States, and from
favorable trade conditions under the North
American Free Trade Agreement. Over the
next five years, IBISWorld expects exports
will continue to decline at an average annual
rate of 0.6% through 2020, as the dollar
gains in strength and industry operators
become more domestically oriented.
WWW.IBISWORLD.COM
Products & Markets

Business Locations 2015
West
New
England
AK
0.0
Great
Lakes
WA
ND
MT
3.0
Rocky
Mountains
ID
OR
4.4
West NV
1.5
2.6
SD
0.2
WY
0.7
MN
0.4
1.1
Plains
CO
2.0
KY
0.7
OK
0.0
NC
1.5
TN
AZ
NM
1.7
0.4
Southwest
TX
3.1
HI
0.2
Additional States (as marked on map)

1 VT
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
1.3
1.6
0.7
2.6
3.5
0.4
SC
Southeast
0.6
MS
AL
0.4
0.4
GA
1.7
0.2
LA
0.0
FL
4.6
Establishments (%)
0.4
1.3
AR
0.3
0.9
15.8
WV VA
0.6
0.7
2.8
CA
West
4.2
MO
KS
4.2
OH
2.2
5.0
5.0
IN
IL
0.6
UT
PA
4.4
1.1
1.1
1 2
3
NY
5.9
5 4
MI
1.7
IA
NE
0.3
WI
ME
MidAtlantic
9 DC
0.0
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
WWW.IBISWORLD.COM
Products & Markets
Distribution of establishments vs. population

30
20
10
Southwest
Southeast
Plains
New England
Rocky Mountains
Establishments
Mid-Atlantic
Great Lakes
0
West
Proximity to downstream markets

enables manufacturers to increase
delivery speed while reducing
transportation costs. However, due to
the large number of downstream
markets and the relatively small
number of companies in this industry,
the dispersion of establishments does
not follow a clear trend. Analysis
suggests that the majority of industry
manufacturers in the United States are
located in the West and the MidAtlantic region, which, on a combined
basis, comprise an estimated 40.0% of
total establishments.
The West accounts for an estimated
25.0% of total establishments. This is in
line with downstream demand, as the
region accounts for the second-highest
number of toy stores at about 18.0%.
California, in particular, is the densest
state, accounting for about 15.8% of total
manufacturers. The Mid-Atlantic region
accounts for an estimated 15.0% of the
number of establishments nationally.
Business Locations
Population
The region has access to some of the

largest US seaports, making it an
attractive location for manufacturing
industries to import raw materials and
ship exports overseas.
WWW.IBISWORLD.COM
21
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks

Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration
in
this industry is L ow
Key Success Factors

IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks
Toy manufacturing is a lucrative business

in the United States. While industry
concentration remains low, it has
increased over the past five years and is
expected to continue its upward trajectory.
As a result of a 0.7% per year contraction
in enterprises, the exit of operators from
this industry has been fuelled by a rise in
imports. The influx of more-affordable
toys into the domestic market created an
intensely competitive environment for
existing players. Faced with eroding
margins and loss of buyers, some
operators were simply forced out of the
market. Other manufacturers resorted to
moving their production facilities to

overseas locations such as China, in
attempts to manufacture goods at a lower
cost than was possible domestically.
Over the next five years, industry
concentration will increase further as the
number of enterprises decrease at an
annualized rate of 0.7%. As more US
operators reshore manufacturing
operations, and existing unprofitable
players exit the market, large
manufacturers will benefit from
purchasing and technical economies of
scale and will account for a greater
proportion of industry revenue.
Establishment of brand names

Recognizable brand names and positive
images help operators remain competitive
and win supply contracts and shelf space.
Ability to quickly adopt new technology

Patented technology can be essential
to competing with imports. In
addition, the adoption of new
technology will play a key role in
making domestic manufacturers more
competitive as production reshores to
the United States.
Having a diverse range of clients

Diversifying of client rosters offsets the
risk and potential financial impacts of
losing important customers. Of particular
importance is the ability to target a large
consumer base segmented by age and
interests so as to diversify risk.
Having links with suppliers
Maintaining strong links with suppliers
helps in negotiating competitive prices
for inputs, payment, trade credit and
delivery terms.
Must comply with required

product standards
Operators should ensure that
manufactured products meet design
and legislative specifications in order
to avoid tarnishing their reputations
and incurring significant losses by
having to recall their products because
of safety concerns.
Profit
Profit is measured as income before
interest and taxes. Declining downstream
demand and falling revenue over the past
five years has impaired Toy, Doll and Game
Manufacturing industry profit margins
(earnings before interest and taxes). Falling
revenue has caused industry operators to
experience a higher cost per unit, since
expenses, such as rent and salaried wages,
remain fixed. In addition, imported

products continue to pose a threat to
profit margins. In order to compete with
lower-cost imports, US manufacturers
have been forced to discount prices and
absorb losses. Increases in raw material
costs have also eaten into profit: the price
of plastic materials and resin has
increased at an average annual rate of
1.2% over the past five years.
WWW.IBISWORLD.COM
22
However, the recent decline in the price

of crude oil has brought down costs for toy
manufacturers. Since plastic and other raw
materials used in manufacturing toys are
derivatives of hydrocarbons, many of which
are obtained from crude oil and since the
manufacturing process is energy intensive,
declining oil prices have improved profit
margins over the past couple of years.
Additionally, increasing demand for
electronic toys, which have higher margins
has also increased profitability. Overall,
IBISWorld expects profit to account for
5.5% of revenue in 2015.
Purchases
Purchases of raw materials are the largest
expense for this industry, accounting for
an estimated 42.0% of total revenue in
2015. This is typical of manufacturing
industries, as operators buy large
amounts of raw materials to produce
their final outputs. Input materials used
for toy, doll and game manufacturing

include plastic, wood, rubber, metal and
textiles. The prices of these materials can
be volatile, and many have gone up in
price over the past five years.
Wages
Wages are the second-largest expense
item, representing an estimated 18.3%
of industry revenue in 2015. Labor is
used to assist in the production, packing
and distribution of goods, and for
conducting sales, research and
development, management and other
activities. Over the past five years, many
manufacturers have reduced labor to cut
costs and improve margins.
Furthermore, many domestic companies
have relocated their production facilities
to lower-cost production countries, such
as China. This exodus of manufacturing
operations has further reduced the
number of US workers in the industry.
Sector vs. Industry Costs

Average Costs of
all Industries in
sector (2015)
100
Industry Costs
(2015)
5.5
7.0
10.7
18.3
56.7
42.0
80
Percentage of revenue
Cost Structure
Benchmarks
continued
60
n Profit
n Wages
n Purchases
n Depreciation
n Marketing
n Rent & Utilities
n Other
40
1.5
20
2.5
2.8
19.3
3.5
1.0
2.7
26.5
0
WWW.IBISWORLD.COM
23
Cost Structure
Benchmarks
continued
Wages as a share of revenue have

increased from 16.6% in 2010 to 18.3%
in 2015, because revenue has fallen
much more rapidly in comparison.
Depreciation
Depreciation is expected to account for
1.5% of revenue in 2015. Over the past
five years, the deprecation expense for
the industry has increased due to a
shifting reliance from labor to capital in
order to improve efficiency and reduce
costs for larger operators. As trends in
additive manufacturing start influencing
this industry more, deprecation expense
is expected to increase over the next five
years. However, overall depreciation
expense has fallen from 1.8% of revenue
in 2010 because of declining revenue and
a small return on investment.
Basis of Competition
Level & Trend
ompetition
C
in this
industry is H
ighand
the trend is S
teady
Until the introduction of electronic and

interactive toys, industry manufacturers
largely operated in a saturated product
market, differentiating themselves from
competitors through price, product range
and availability and play value. Operators
existed in a well-defined product market,
which catered to nearly every age
category and consumer preference. Price
was viewed as the primary point of
differentiation, subject to seasonal
fluctuations depending on product
capacity and industry demand.
Internal
In the traditional toy market, product
ranges offered by various manufacturers
were almost as important as price, as this
enabled enterprises to differentiate
themselves in a highly saturated market.
The importance of product availability
was also a key factor in remaining
competitive, as it was seen as crucial to
maintaining relationships with
wholesalers. The ability to produce
sufficient merchandise, especially for
Rent and utilities

Rent and utility costs are expected to
account for 2.7% of total revenue in 2015.
These costs, which largely cover
expenditures on the use of leased
machinery, buildings and storage
facilities, have decreased over the past
five years as operators have closed
underperforming plants to cut costs.
Other
Costs associated with marketing and
advertising are expected to account for
3.5% of industry revenue in 2015. Other
expenses incurred by this industry
include insurance, freight, employees
fringe benefits expenses and
administrative costs. Collectively, these
expenditures are estimated to account for
27.0% of total revenue in 2015.
peak buying times such as the winter

holiday season, was critical in an
extremely competitive environment. A
key strategy for manufacturers was their
ability to forsee demand trends for
certain products in order to avoid over or
undersupply issues. Manufactures also
tended to highlight a products play
value, an assessment of a products value
based on its contribution to a childs
development. The competitive
environment faced by manufacturers
essentially created a low level of product
differentiation between competitors
which commonly led to new designs
being hastily copied by existing players.
Many product segments such as dolls and
soft toys are characterized by widespread
imitation of popular designs.
While factors such as availability and
play value continue to be important in
todays toy manufacturing environment,
the development and introduction of
technology which facilitated the
introduction of electronic and interactive
toys to the market, created an entirely
WWW.IBISWORLD.COM
24
Basis of Competition
continued
new basis of competition for players. The

concept of merging technology and toys
was considered revolutionary, aided to a
large extent by ever-shrinking microchips
and their ability to create robotic toys
that follow instructions or interact with
children. However, the addition of
technology to the competitive landscape
has created setbacks. Manufacturers have
come to acknowledge that once
introduced, technological products
require constant upgrading via the
addition of new features, if they are to
remain relevant to todays consumer.
External
Toys have traditionally competed with
other leisure activities for childrens
attention. Before video games and
electronic toys, children spent the
majority of their time playing outside,
Barriers to Entry
Level & Trend
arriers to Entry
B
in this industry are

Mediumand S
teady
Prospective operators planning to enter

the Toy, Doll and Game Manufacturing
industry will face a number of challenges.
The most significant barrier to entry is the
amount of time, research and capital
required to establish a brand, along with
the complexities involved in developing
unique product designs, and protecting
intellectual property rights and
trademarks. The high-cost and long-term
nature of brand reputation is, hence, the
largest barrier to entry. Already
established brands such as Hasbro and
Mattel have respective product offerings
and new entrants will be compelled to
invest money and time to persuade
consumers to shift away from recognizable
brands. Once a new product has been
developed, manufacturers must invest in
trademarks to protect themselves from
copyright issues. The development and
protection of intellectual property rights
ranks high with manufacturers, as this
enables them to exclusively produce a
brand or use a patented product design.
partaking in activities such as hiking,

climbing trees, riding bikes and watching
birds. It was widely perceived that
outdoor play boosted the creativity and
social well-being of children. The gradual
migration of children to indoor activities
over the past three decades has often
been labeled a cause of obesity epidemic
in the United States during this period.
However, a strong rise in highly
structured activity organized sports or
cultural classes (art and music) can also
be attributed to this decline. As a result,
increasing consumer awareness of the
importance of exercise and healthy
lifestyle choices has heightened the level
of competition among sporting good
manufacturers. Sporting manufacturers
have marketed the health benefits
associated with sports participation in a
bid to boost sales.
Barriers to Entry checklist

Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
High
Low
Decline
Low
Medium
Heavy
Low
The market share controlled by

existing industry players can act as a
natural deterrent to new operators.
Today, the retail landscape for toys is
dominated by a few large stores including
Walmart, Target and Toys R Us, and a
large portion of these retailers shelf
space is occupied by products
manufactured by incumbent players. As a
result, new entrants will find it difficult to
compete against the industrys largest
players in gaining new supply contracts,
thereby ensuring sales.
WWW.IBISWORLD.COM
25
Barriers to Entry
continued
New players also face the issue of

finding skilled labor. It can be particularly
difficult to secure skilled production
workers such as CAD-trained designers
and tertiary qualified management. Also,
the development of new products can
demand alternative labor during the

production process. Manufacturers must
assess their labor requirements on a
regular basis. Experienced workers are
approaching retirement and can be
costlier for a company over the long term.
Industry
Globalization
The Toy, Doll and Game Manufacturing

industry has experienced increasing levels
of globalization over the past five years. The
key driver has been the rapid increase in
imported goods into the US market. The
influx of imports has largely come from
developing Asian countries such as China.
Imported goods are often considerably less
costly to produce than domestically
manufactured items, but are also
synonymous with lower quality. However,
due to the price competitive nature of this

industry, imports have been well received,
often viewed as offering better value for
money. Their impact on the domestic
market has been extensive, with US
manufacturers forced to compete on price
as opposed to product range and quality.
The overall effect of imports on the local
economy is possibly best surmised by its
share of the domestic demand, which is
expected to be 98.5% in 2015.
International trade is a
major determinant of
an industrys level of
globalization.Exports offer
growth opportunities
for firms. However there
are legal, economic and
political risks associated
with dealing in foreign
countries.Import
competition can bring a
greater risk for companies
as foreign producers satisfy
domestic demand that
local firms would otherwise
supply.
Trade Globalization
200
Going Global: Toy, Doll & Game Manufacturing

2004-2015
Global
Export
150
Toy, Doll & Game

Manufacturing
100
50
0 Local
0
Import
40
80
120
Imports/Domestic Demand
160
200 Export
Exports/Revenue
in
this industry is
Highand the trend
is I ncreasing
Exports/Revenue
Level & Trend

lobalization
G
Global
150
100
2015
50
0 Local
0
2004
40
80
Import
120
160
Imports/Domestic Demand
WWW.IBISWORLD.COM
Major Companies
Hasbro Inc. | Other Companies
Major players
(Market share)
90.3%
Other
Hasbro Inc. 9.7%
Player Performance
Hasbro Inc.
Market share: 9.7%
Industry Brand Names
Playskool
Transformers
My Little Pony
Hasbro Inc. is the second-largest US toy

manufacturer by revenue, with a large
portfolio of brands including traditional
trading cards and board games, puzzles,
action figures, plush toys and dolls,
childrens electronics and learning aides.
It is the largest toy manufacturer that still
manufactures in the United States.
Hasbros products are broken down into
four categories: games and puzzles
(including Monopoly and Scrabble), boys
toys (G.I. Joe and Transformers), girls
toys (My Little Pony and Baby Alive) and
preschool toys (Playskool). The company
employs about 2,700 people in the
United States and is headquartered in
Pawtucket, RI.
Hasbro manufactures its products
through company-owned plants in the
United States and via third-party
facilities. However, the major player has
substantially increased the level of
outsourcing to Asian countries over the
years, predominantly to China. This

practice has allowed the company to take
advantage of low labor and overhead
costs, resulting in significant cost savings.
These products are then distributed to
domestic operators, such as wholesalers,
specialty toy stores, discount retailers,
mail-order and catalog houses,
department stores and mass
merchandisers across the United States.
The company records its manufacturing
revenue in the Global Operations
segment, which comprises revenue
generated from manufacturing activities,
worldwide, including the companys
manufacturing plant in Massachusetts.
Since most of the sales from this segment
as intersegmental, the Global Operations
segment has a very small profit margin,
which is not reflective of the average
profitability of this industry.
As with other operators in the
industry, Hasbro has suffered from the
Hasbro Inc. (US industry-specific operations) - financial performance*

Year
Revenue
($ million)
Operating Income
($ million)
(% change)
2010
199.6
2011
228.2
N/C
2.4
N/C
14.3
2.5
4.2
2012
171.9
2013
194.0
-24.7
-1.8
N/C
12.9
0.8
N/C
2014
175.0
-9.8
1.7
112.5
2015
180.7
3.3
2.7
58.8
(% change)
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
age compression phenomenon, a trend

whereby children began trading in
traditional toys for more sophisticated
gadgets, such as video games and
electronics, at younger ages. In response
to this trend, in 2005, Hasbro launched
several new brands (e.g. Tiger
Electronics) to target the 8- to 12-yearold demographic, in hopes of maintaining
its market share through selling
electronic-based games. However, the
company experienced little success, as it
faced high competition from video game
manufacturers. Furthermore, poor
spending conditions due to a weak
economy deterred consumers from
paying premium prices for electronic
toys. Consequently, Hasbro announced in
early 2009 that it would abandon its
electronic division. Instead, the company
refocused its strategy to emphasize its
core products, which have ties to motion
pictures and television shows. To achieve
this, the company entered a joint venture
with Discovery Communications to create
a new childrens channel during the same
year. This channel, called The Hub, was
launched in October 2010.
Financial performance
Hasbros industry-specific revenue is
expected to decline at an average annual
Other Companies
Although a considerable portion of the

Toy, Doll and Game Manufacturing
industry is dominated by global players
Hasbro and Mattel, the remainder of the
industry is characterized by a large
number of small- and medium-sized
companies. Larger players have been
increasingly offshoring or outsourcing
production overseas to take advantage of
inexpensive labor and overhead costs.
As a result, smaller manufacturing
facilities dominate the domestic
production of toys and dolls.
rate of 2.0% to $180.7 million in the five

years to 2015. Improvements in
disposable income and consumer
confidence helped boost sales by 14.3% in
2011, despite a 6.1% decline in revenue
during 2010 due to a decline in boys toys
sales. During the recession, Hasbro
demonstrated solid growth as toys with
movie and television tie-ins exhibited
strong sales. For instance, theatrical
releases of both Transformers and G.I.
Joe in 2009 increased demand for
related action figures and other similar
products, leading to a 1.7% revenue
growth in the same year. Hasbros
income also remained strong in 2009;
industry specific operating income
increased by 47.3% as a result of a rise
in total sales, positive product mix and
decreased marketing and sales
expenses. In 2015, Hasbros US
industry-specific revenue is expected to
slightly rise. This will most likely occur
because of strong first quarter sales, as
compares to the previous year.
Additionally, Hasbros long-standing
investment in technology and
productivity will continue to pay off
and will boost its operating income by
54.9% for 2015. A fall in the price of
crude oil is also expected to improve
profit margins for the company.
Alivans
Estimated market share: 0.1%

Founded in 2003 and headquartered in
Panama City, FL, Alivans is one of the
largest producers of handcrafted magic
wands in the world. The company, which
employs about 8 people, offers a
multitude of different wands, wizard
staffs and other magic-themed toys,
including merchandise based on the
popular Harry Potter movie series. As a
private company, Alivans does not
disclose financial information to the
WWW.IBISWORLD.COM
Major Companies
Other Companies
continued
public. However, in 2015, according to

Hoovers, the company is expected to
generate $0.8 million in revenue, giving
it an industry market share of 0.1%.
The company closed its last major US

production facility in 2002, and has since
focused only on design, marketing and
distribution for its US-based operations.
Mattel Inc.
KNex Brands LP
Estimated market share: N/A

Mattel Inc. is the worlds largest
manufacturer and marketer of toy
products. The company offers a diverse
range of products for children of all ages,
including toys for infants and
preschoolers, girls toys, boys toys, youth
electronics, hand-held games and
educational toys. Mattels domestic
segment is divided into three categories:
Mattel girls and boys brands, which
include toys such as Barbie dolls and Hot
Wheels; Fisher-Price brands, which
include Little People, BabyGear, Power
Wheels and Dora the Explorer; and
American Girl brands, which include the
My American Girl and Bitty Baby
collections. Mattel has also entered into
licensing agreements to produce and
market toys based on Disney characters,
Disney films, Nickelodeon characters,
Warner Bros. characters such as Batman
and Superman, and Sesame Street
characters. However, in 2010, the Sesame
Street license was granted to Hasbro.
This license includes a deal with Sesame
Workshop for rights to produce Sesame
Street toys through 2020.
Mattel manufactures toy products via
company-owned facilities and third-party
manufacturers. Over the past five years,
the company has focused most of its
core-product production in companyowned plants in order to achieve greater
flexibility in the production and delivery
of its products. Mattel has moved most of
its manufacturing facilities from the
United States to China, Indonesia,
Thailand, Malaysia and Mexico as part of
its continuing effort to reduce overall
manufacturing costs. This move has
enabled the company to take advantage
of cheap labor and low overhead costs.
Estimated market share: 1.6%

KNex was founded in 1992 and sent its
first shipment for sale to Toys R Us.
The company is headquartered in
Hatfield, PA, and employs about 400
people. KNex and its affiliated
manufacturer, The Rodon Group, have an
estimated combined revenue of $100
million, according to The Wall Street
Journal. In 2012, the company took over
the production of Tinkertoys under
license from Hasbro. Like other
industry players, KNex had moved
most of its manufacturing operations
to China and the Far East. However,
over the past few years, KNex has
brought a significant amount of its
production operations back to its
headquarters in Hatfield. The company
believes that it can gain long-term
advantages such as lower compliance
costs, shorter response times and a
greater ability to monitor production
quality and design. According to estimates
from Hoovers the company generated
$28.9 million in 2014 and IBISWorld
expects KNex will generate $30.0 million
in revenue from its US industry-specific
operations in 2015, putting its estimated
market share at 1.6%.
Little Tikes
Estimated market share: N/A

Little Tikes was established in Aurora,
OH, in 1969 and is currently
headquartered in Hudson, OH. The
company employs about 800 people at its
only manufacturing facility in the US, in
Hudson. Little Tikes is another industry
player that exemplifies the recent
preference for reshoring toys, dolls and
games manufacturing back to the US.
Over the past few years, the company has
WWW.IBISWORLD.COM
Major Companies
Other Companies
continued
brought back many of its manufacturing

operations back to the US, citing significant
logistical problems and high freight costs as
two of their primary concerns. Company
officials contend that labor cost is not the
only concern when making a decision
regarding where to produce. Equally
important are logistical, quality and
response time concerns alongside energy
costs. The United States has an advantage
in those areas, claimed the company in a
Cleveland Business article in July 2013.
Little Tikes has seen growth in recent years
after moving more of its manufacturing
back to the US and is making considerable
capital investments to ensure that it

remains competitive, despite increasing
labor costs in the United States. The
company recently invested $3.0 million in
new injection modeling technology, which
became operational in 2014. Since Little
Tikes is a privately held company and is a
subsidiary of MGA Entertainment, it does
not publicly report its revenue. However,
IBISWorld expects revenue to be
significant, given that, according to some
sources, Little Tykes contributed $250.0
million in revenue to Newell Rubbermaid
before being acquired by MGA
Entertainment in 2006.
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility

Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is L ow
The level of capital intensity in this

industry is low to moderate. On average,
this industry spends $0.08 on capital for
every dollar spent on labor, which reflects
the importance of manual labor to the
product assembly process and the need
for qualified personnel for the design
components of production.
The level of capital requirements for
manufacturers can be extensive, covering
items such as plant and equipment used
in the production process. The level of
research and development activity
undertaken by a company also affects
investment in plants and machinery.
The development of new products has
generally been associated with
substantial changes to existing
machinery and production processes,
Capital intensity
Capital units per labor unit

0.5
0.4
0.3
0.2
0.1
0.0
Economy
Manufacturing
Toy, Doll &

Game
Manufacturing
Dotted line shows a high level of capital intensity

and an overall rise in capital

investments. Manufacturers also tend
to spend more on capital investments
Tools of the Trade: Growth Strategies for Success

Investment Economy
Recreation, Personal Services,

Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Traditional Service Economy

Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Capital Intensive
Labor Intensive
New Age Economy
Hobby & Toy Stores

Cardboard Box & Container Manufacturing
Motorcycle, Bike & Parts Manufacturing Old Economy
Toy & Craft Supplies Wholesaling
Agriculture and Manufacturing.
Recordable Media Manufacturing
Change in Share of the Economy
Traded goods can be produced

using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
WWW.IBISWORLD.COM
Capital Intensity
continued
to remain competitive within the

market by investing in new technology.
This trend was exemplified by the
launch of electronic and interactive
toys into the market.
Growth in the level of capital
investment for this industry has had a
resulting negative impact on the demand
for semi-skilled labor. While skilled
production staff has always been required
for the assembly of products, a rise in
automation technology has effectively
made such staff redundant. The demise
of labor across this industry has also been
Technology & Systems In terms of manufacturing technology,

Level
The level
of
Technology Change
is M
edium
Revenue Volatility
Level
The level
of
Volatility is H
igh
driven by the trend of keeping the

number of employees to a minimum and
using temporary employees during peak
times (the third and fourth quarters of
each fiscal year). While the level of capital
intensity has decreased over the past five
years due to a dramatic decline in
revenue, IBISWorld expects that the
industry will continue to become more
capital intensive over the next few years
as industry operators reshore
manufacturing to the United States and
attempt to substitute capital for labor to
compete with low-priced imports.
the types and extent of technology vary

across product segments. However, there
are some common technologies
employed by larger manufacturers to
streamline production and reduce costs.
For instance, most large manufacturing
operations utilize computer-controlled
machinery and other automated
handling and assembly technology to
perform repetitive tasks. Although these
forms of machinery are relatively
expensive to set up and install, the
associated productivity gains are
substantial. An increase in output
volume reduces the cost per unit, as
fixed costs are spread across more units.
Types of materials used as inputs to
the manufacturing process are also
changing, with lighter and more durable
materials being utilized for product
modifications. In addition, per childrens

product safety laws, Consumer Product
Safety Improvement Act of 2008 (see
Regulation and Policy), manufacturers
have transitioned to using lead-free paint
and non-toxic raw materials.
Over the five years to 2015, changes in
technology have been accelerated by the
age compression phenomenon in the
industry. In response to this trend,
manufacturers have launched more
sophisticated toys with advanced
electronic components. For example,
microchips that provide lifelike features
to toys and complex operating systems
have been installed for learning
platforms. With youth electronic toys
sales projected to increase, such
advancements in technology are
expected to continue in the industry
over the next five years.
Revenue for the Toy, Doll and Game

Manufacturing industry is influenced by
variations in the level of personal
disposable income and consumer
confidence. Spending on industry
products increases when consumers are
more confident about their financial
position. The decline of these drivers,
triggered by the economic recession,

significantly hindered demand over the
five years to 2015.
Demand has also been adversely
affected by growing competition from low
priced imports. Imports from Asia,
especially China, have placed increasing
pressure on the industry by offering
WWW.IBISWORLD.COM
retailers a broad range of toy products at

highly competitive prices. As a result,
domestic operators have been forced to
reduce their price points in order to
remain competitive, causing overall revenue
to decrease in the process. Conversely,
advances in product technology and design
have fueled rise in demand for interactive
toys. Age compression in society prompted
a shift in consumer preferences, which
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
initially caused concern within the industry

due to a gap in product availability;
however, the introduction of new goods
soon filled the void.
Over the five years to 2015, the industry
experienced high revenue volatility.
Volatile exchange rate conditions coupled
with economic uncertainty led to large
fluctuations in revenue over the past
five-year period.
Volatility vs Growth
1000
Revenue volatility* (%)
Revenue Volatility
continued
Hazardous
100
Rollercoaster
10
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
Five year annualized revenue growth (%)

* Axis is in logarithmic scale
Regulation & Policy

Level & Trend
he level of
T
Regulation is
Heavyand the
trend is S
teady
Consumer Product Safety

Improvement Act
Consumer Product Safety Improvement Act
of 2008 (CPSIA) is the most recent industryrelevant regulation to be introduced. This
act aims to protect children from unsafe
levels of lead and phthalates by banning the
sale of all childrens products that do not
meet the new federal regulations. CPSIA
also requires manufacturers to test all
products and parts intended for children
under 12 years of age, including all toys,
dolls and games that are sold. If stores
are found selling items do that meet the
new federal regulations, violators are
subject to criminal and civil charges
under the act, with fines up to $100,000
for each violation and prison sentences
up to five years.
Because most industry products are

geared toward children under 12 years of
age, operators in this industry
experienced considerable testing costs. In
addition, many stores have also incurred
large disposal costs for goods that do not
meet the new regulation and
governmental standards, which have hurt
profit margins in the past five years.
Other regulations
Along with many other manufacturing
industries, the Toy, Doll and Game
Manufacturing industry is subject to
federal, state and local environmental
laws, and health and safety laws and
regulations that impose workplace
standards and limitations on the
discharge of pollutants into the
WWW.IBISWORLD.COM
Regulation & Policy

continued
environment. These laws also establish

standards for the handling, generation,
emission, release, discharge, treatment,
storage and disposal of certain materials,
substances and wastes. Such laws include
US Clean Air Act and the Clean Water
Act. The US Clean Air Act requires
compliance with air quality standards
and empowers the Environmental
Protection Agency (EPA) to establish and
enforce the limits on the emission of
pollutants. The EPA also establishes
allowances for sulfur and nitrogen oxides,

along with strict requirements applicable
to ozone emissions and other toxic
materials. The Clean Water Act regulates
the discharge of pollutants into the
surface water. This act establishes a
system of minimum national efficiency
standards for water quality, on an
industry-to-industry basis. Industry
operators are also subject to occupational
health and safety, wage, overtime and
other employment laws.
Industry Assistance
The Toy Industry Association, Inc.

(TIA) was founded in 1916, and is the
national trade association for US
producers and importers of toys, games
and childrens entertainment products.
Together with the US government, TIA
has developed toy safety standards. TIA
also works with consumer
organizations, such as the International
Consumer Product Health and Safety
Organization (ICPHSO) and, most
recently, the National SAFE KIDS
Campaign, to communicate the
importance of safe play throughout the

United States.
The National Association of
Manufacturers mission is to enhance the
competitiveness of manufacturers and to
increase understanding among
policymakers, the media and the general
public about the importance of
manufacturing to US economic strength.
With the implementation of the Uruguay
Round agreement effective January 1,
1995, all US duties on dolls and traditional
toys were completely eliminated.
Level & Trend

he level of
T
Industry Assistance
is L owand the
trend is S
teady
WWW.IBISWORLD.COM
34
Key Statistics
Industry Data
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sector Rank
Economy Rank
Industry
Revenue Value Added
($m)
($m)
4,621.5
996.6
3,320.3
639.2
3,413.6
517.8
2,373.3
580.7
2,377.0
527.0
2,417.0
595.2
1,740.1
443.5
1,716.3
393.9
1,726.8
434.5
1,863.5
470.7
1,828.3
469.2
1,786.9
451.2
1,751.7
448.4
1,728.6
436.8
1,711.7
435.0
288/405
285/405
1075/1364 1116/1364
Annual Change
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sector Rank
Economy Rank
Revenue
(%)
-28.2
2.8
-30.5
0.2
1.7
-28.0
-1.4
0.6
7.9
-1.9
-2.3
-2.0
-1.3
-1.0
30/405
129/1364
Industry
Value Added
(%)
-35.9
-19.0
12.1
-9.2
12.9
-25.5
-11.2
10.3
8.3
-0.3
-3.8
-0.6
-2.6
-0.4
39/405
155/1364
Key Ratios
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sector Rank
Economy Rank
IVA/Revenue
(%)
21.56
19.25
15.17
24.47
22.17
24.63
25.49
22.95
25.16
25.26
25.66
25.25
25.60
25.27
25.41
187/405
883/1364
Establishments
787
777
712
667
598
594
563
545
563
577
574
563
562
560
560
134/405
941/1364
Enterprises Employment
776
16,075
770
12,349
705
11,044
660
9,814
593
8,800
589
7,828
560
7,481
543
6,538
559
7,292
573
7,621
566
7,724
559
7,246
558
7,277
555
7,184
554
7,213
123/405
244/405
879/1364
1054/1364
Exports
($m)
1,568.4
2,286.7
1,757.8
1,775.8
1,663.6
1,561.4
1,410.9
1,255.3
1,256.4
1,584.0
1,553.8
1,561.8
1,536.0
1,516.0
1,538.3
121/373
139/428
Imports
($m)
20,087.1
25,102.5
25,810.8
22,915.7
23,759.5
20,627.8
19,060.3
18,241.0
18,552.6
18,529.3
18,892.0
19,332.3
19,800.6
20,028.0
20,061.9
36/373
38/428
Wages
($m)
712.8
517.6
463.0
419.6
394.9
408.2
349.5
287.5
322.3
340.3
341.2
326.1
327.6
319.3
320.3
267/405
1067/1364
Price of plastic
Domestic materials and resin
Demand
(Index)
23,140.2
198.4
26,136.1
195.9
27,466.6
215.0
23,513.2
190.8
24,472.9
210.1
21,483.4
229.9
19,389.5
235.2
18,702.0
245.3
19,023.0
257.8
18,808.8
223.0
19,166.5
211.7
19,557.4
221.5
20,016.3
228.9
20,240.6
233.3
20,235.3
236.1
108/373
N/A
126/428
N/A
Establishments
(%)
-1.3
-8.4
-6.3
-10.3
-0.7
-5.2
-3.2
3.3
2.5
-0.5
-1.9
-0.2
-0.4
0.0
87/405
411/1364
Enterprises Employment
(%)
(%)
-0.8
-23.2
-8.4
-10.6
-6.4
-11.1
-10.2
-10.3
-0.7
-11.0
-4.9
-4.4
-3.0
-12.6
2.9
11.5
2.5
4.5
-1.2
1.4
-1.2
-6.2
-0.2
0.4
-0.5
-1.3
-0.2
0.4
82/405
48/405
371/1364
218/1364
Exports
(%)
45.8
-23.1
1.0
-6.3
-6.1
-9.6
-11.0
0.1
26.1
-1.9
0.5
-1.7
-1.3
1.5
8/373
9/428
Imports
(%)
25.0
2.8
-11.2
3.7
-13.2
-7.6
-4.3
1.7
-0.1
2.0
2.3
2.4
1.1
0.2
294/373
336/428
Wages
(%)
-27.4
-10.5
-9.4
-5.9
3.4
-14.4
-17.7
12.1
5.6
0.3
-4.4
0.5
-2.5
0.3
42/405
200/1364
Domestic Price of plastic maDemand terials and resin

(%)
(%)
12.9
-1.3
5.1
9.8
-14.4
-11.3
4.1
10.1
-12.2
9.4
-9.7
2.3
-3.5
4.3
1.7
5.1
-1.1
-13.5
1.9
-5.1
2.0
4.6
2.3
3.3
1.1
1.9
0.0
1.2
328/373
N/A
370/428
N/A
Imports/
Demand
(%)
86.81
96.05
93.97
97.46
97.08
96.02
98.30
97.54
97.53
98.51
98.57
98.85
98.92
98.95
99.14
5/373
6/428
Exports/
Revenue
(%)
33.94
68.87
51.49
74.82
69.99
64.60
81.08
73.14
72.76
85.00
84.99
87.40
87.69
87.70
89.87
5/373
6/428
Figures are in inflation-adjusted 2015 dollars. Rank refers to 2015 data.
Revenue per
Employee
($000)
287.50
268.87
309.09
241.83
270.11
308.76
232.60
262.51
236.81
244.52
236.70
246.61
240.72
240.62
237.31
331/405
702/1364
Wages/Revenue
(%)
15.42
15.59
13.56
17.68
16.61
16.89
20.09
16.75
18.66
18.26
18.66
18.25
18.70
18.47
18.71
109/405
699/1364
Employees
per Est.
20.43
15.89
15.51
14.71
14.72
13.18
13.29
12.00
12.95
13.21
13.46
12.87
12.95
12.83
12.88
355/405
684/1364
Average Wage
($)
44,342.15
41,914.33
41,923.22
42,755.25
44,875.00
52,146.14
46,718.35
43,973.69
44,199.12
44,652.93
44,174.00
45,004.14
45,018.55
44,445.99
44,405.93
305/405
799/1364
Share of the
Economy
(%)
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
285/405
1116/1364
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon
AGE COMPRESSIONA phenomenon whereby children

are outgrowing toys at a younger age and demanding
more adult-like products.
TWEENThe stage between middle childhood and

adolescence in human development, generally ranging
from 8 to 12 years of age.
OFFSHOREThe relocation of a companys business

process, such as manufacturing or accounting, from one
country to another, whether the work is outsourced or
stays within the company.
WEBISODEAn episode, such as a TV show, which may

or may not have been telecast but can be viewed at a
website.
OUTSOURCEThe act of procuring goods or services

under contract with an outside supplier.
WHOLESALE BYPASSA popular trend within retail and

manufacturing industries where producers supply goods
directly to stores, eliminating the middleman.
PHTHALATEA substance is added to many plastics (to

increase flexibility, transparency, durability and
longevity) that is being phased out of many products in
the United States over health concerns..
IBISWorld Glossary
BARRIERS TO ENTRYHigh barriers to entry mean that

new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITY Compares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labor; medium is $0.125 to $0.333 of capital to $1
of labor; low is less than $0.125 of capital for every $1 of
labor.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
real growth or decline in industry metrics. The inflation
adjustments in IBISWorlds reports are made using the
US Bureau of Economic Analysis implicit GDP price
deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISE A division that is separately managed
and keeps management accounts. Each enterprise
consists of one or more establishments that are under
common ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTS Total value of industry goods and services

brought in from foreign countries to be sold in the
United States.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industrys contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industrys life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industrys products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
WWW.IBISWORLD.COM
Jargon & Glossary
IBISWorld Glossary
continued
NONEMPLOYING ESTABLISHMENT Businesses with no

paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a companys profitability. It is
calculated as revenue minus expenses, excluding interest
and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
20%; high volatility is 10% to 20%; moderate
volatility is 3% to 10%; and low volatility is less than
3%.
WAGESThe gross total wages and salaries of all

employees in the industry. The cost of benefits is also
included in this figure.
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Toy Doll Game Manufacturing in The US Industry Report

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Toy, Doll & Game Manufacturing in the USMay 2015 1

Game time: Despite recovering demand,

IBISWorld Industry Report 33993

Toy, Doll & Game

2 About this Industry

21 Market Share Concentration

21 Key Success Factors

35 Jargon & Glossary

21 Cost Structure Benchmarks

Key External Drivers

11 Industry Life Cycle

31 Technology & Systems

13 Products & Services

32 Regulation & Policy

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

Toy, Doll & Game Manufacturing in the USMay 2015 2

About this Industry

This industry comprises companies

The primary activities of this industry are

(including electronic), hobby kits and

Manufacturing action figures

The major products and services in this industry are

33461 Recordable Media Manufacturing in the US

For additional information on this industry

Toy, Doll & Game Manufacturing in the US May 2015

Annual Growth 10-15

Annual Growth 15-20

Import penetration into the manufacturing

Revenue vs. employment growth

Products and services segmentation (2015)

Key External Drivers

Dolls, action figures, toy animals and

Import penetration into

Baby carriages and children's

Models and crafts

Nonelectronic games and

Electronic toys and

Other nonelectronic, nonriding toys,

Life Cycle Stage

Toy, Doll & Game Manufacturing in the USMay 2015 4

Executive Summary | Key External Drivers | Current Performance

Operators in the Toy, Doll and Game

higher demand, toy manufacturers will

Key External Drivers

Import penetration into the

profit margins to compete with low-cost

their lower prices. Import penetration

Toy, Doll & Game Manufacturing in the USMay 2015 5

the value of the US dollar leads to lower

Per capita disposable income

Import penetration into the manufacturing

Key External Drivers

Toy, Doll & Game Manufacturing in the USMay 2015 6

The Toy, Doll and Game Manufacturing

Demand in the Toy, Doll and Game

order to remain competitive. Many

Toy, Doll & Game Manufacturing in the USMay 2015 7

Toy recalls and new

In addition to falling demand, competition

and energy and transportation related over

An increase in outsourcing and

lead found in paint, while others were

Toy, Doll & Game Manufacturing in the USMay 2015 8