Quick, what's your favorite toy or game?
Whatever the answer, the odds are good,
it's from Hasbro.
Green light.
Red light.
Well, not this game.
Since its founding in 1923,
Hasbro has grown from a textile and school supply business
into the biggest toy company in the world.
- G.I. Joe catapulted Hasbro into the stratosphere
as a toy maker.
But their road to glory is full of surprises.
Like did you know that one of Hasbro's
most successful toys from the 1980s
wouldn't exist without tin cans from World War II?
- It's really weird.
Or that the secret to Hasbro's success
was an up-and-coming comic book company.
- This was off the charts, a phenomenon.
And you'll never guess how
an entire segment of the toy industry was invented
because of one person's aversion to dolls.
- It's not a doll, it's not a doll.
Okay,
You may think you know
all about the toys that built America,
but when it comes to this American hero,
there is more than meets the eye.
I'm Adam Richmond gear up for
the transformative history of Hasbro.
In the late 1970s, Hasbro is struggling,
and even G.I. Joe can't save them.
While their signature toy soldier help
put them on the map in 1964,
since then his popularity has taken a direct hit.
The backlash to the Vietnam War
triggered sales to crash and burn.
Until finally in 1978,
Hasbro is forced to sideline Joe
taking him completely off the market.
Then, in 1983,
and in a desperate bid to change their fortunes,
they bring back the MIA soldier after
sitting him out the last five years.
Not only that, but in the era of big hair and big muscles,
the one foot high Joe gets cut down
to 1/3 his original size.
So, why did Hasbro relaunch the tough guy toy
that no one wanted,
and think the best way to turn the company around
was to make him tiny?
To understand that we need to go back
to the beginning before Hasbro even made toys.
And we're best known for making
pencils?
Founded in Providence, Rhode Island in 1923,
Hassenfeld Brothers, as it was known back then,
quickly transitions from manufacturing textiles
to school supplies.
- Hassenfeld Brothers was founded by three brothers,
and they were Polish immigrants that came to the US
and formed a stationery company.
They made pencils, pencil boxes.
During World War II,
they expand their product line to make
doctor and nurse kits for children.
It's a temporary move,
but one person inside the company thinks
toys could be more profitable than pencils.
He also happens to be one of the founder's sons.
- Merrill, young guy out of college,
comes there and says, "Hey, I see a bigger opportunity
for us to invest in new machinery, new technology.
Let's get into the toy business."
Merrill names the new toy division
by combining the first three letters
of Hassenfeld and brothers
Hasbro.
Now, they just need a hit toy.
That's when Merrill gets a well-timed visit
from a struggling toy inventor with a funny face
on the toy.
- George Lerner was an artist from Long Island,
and he came up with the idea of taking
different shapes and piercing vegetables with them,
and making a funny face kit.
- It's like a little potato face man.
- I call it Make a Face.
Within months,
the new toy is in production,
along with a new name,
plus a revolutionary advertising idea,
marketing directly to children
for the first time on an untested medium, television.
- What's new Hasbro?
- Mr. and Mrs. Potato Head,
that's what's new.
- It was an absolute game changer.
It made a seismic shift in the fact
that toy companies could now reach their target market,
which was kids.
And they want what Hasbro's selling.
More than a million Mr. Potato Head kits
sell in the first year,
grossing $4 million for Hasbro,
$39 million today.
- Mr. Potato Head was unlike anything else on the market.
This is an entirely new thing to turn
your food into something funny and fun.
However, some parents complain
about finding rotten vegetables,
scattered around their homes.
As Potato Head sales decline,
Hasbro finds inspiration for their
next big idea on the big screen.
When the major motion picture
the "Son of Flubber" is announced,
Merrill secures the rights to make a toy
based on the fictional substance from the movie.
- Flubber was a new space age material
that stretches, it pulls, roll it into a ball and bounce it.
But the real Flubber is a real disaster.
- There were reports of kids getting rashes
and having sore throats.
- They had no choice, but to get rid of it.
Hasbro loses nearly $5 million on the Flubber flop.
They need another hit fast.
When Merrill learns about archrival
Mattel's new doll for girls,
he begins to have an idea.
What if Hasbro made a doll for a boy?
In 1963, after losing nearly $5 million on the Flubber flop,
Hasbro needs to find a way to bounce back.
- It's a big process.
Especialloy if it's a big toy company
and you need to steer the ship in a different direction.
- This is the world's first movable fighting man.
Everything from guns to boots to dog tags
will be perfect scale replicas of the real thing.
Merrill likes the concept,
but one detail has him worried.
- The hurdle was getting over the fact that quote unquote,
"A boy will never play with a doll."
That's when Merrill has an epiphany.
- So, this doll.
- Let's not call it a doll.
- It's an action figure.
And just like that,
an entire new category of toy is born.
One that will dominate the landscape for years to come.
Just think of the play potential
thousands of accessories,
each sold separately, of course.
- It's like a Barbie doll.
- It's not a doll.
It's not a doll.
- So, what's his name?
- His name is G.I. Joe.
Merrill's team quickly gets to work
on the new action figure.
Actually, four new action figures,
one for each branch of the U.S. military,
soldier, sailor, pilot, Marine.
Now, for the finishing touch.
- To make them look rugged so that
you've never mistake them for Ken,
they put a scar on the cheek.
He was going to be a tough guy.
The scar is also a clever way
for Hasbro to copyright Joe.
Since otherwise the human figure
itself can't be copyrighted.
That means no G.I. Jeff,
no G.I. Jim,
no G.I...
You get the idea.
Thanks to Hassenfeld's strategy,
and an aggressive marketing campaign,
including commercials and jingles like this.
G.I. Joe, G.I. Joe
Fighting man from head to toe
On the land, on the sea, in the air
- When G.I. - Joe storms toy stores
in the summer of 1964,
he's a surprise smash.
G.I. Joe's first year sales net Hasbro
a staggering $23 million, $189 million today.
Suddenly, Hasbro is the number two toy company in America,
right behind Mattel.
But G.I. Joe's victory won't last long.
- As the war in Vietnam becomes more of a quagmire
over the course of the 1960s,
people begin to associate G.I. Joe
with the unpopularity of that war.
Sales of G.I. Joe plummet,
just when things couldn't get worse for Hasbro,
a new rival hits the scene with this ad.
It's Darth Vader, watch out!
It's Kenner's "Star Wars" action figures.
Now, I know the Force is with us.
- There was a major seismic shift in the toy world
when the smaller "Star Wars" action figures came out.
It was all in space,
and G.I. Joe just didn't fit that narrative.
To compete with "Star Wars",
Hasbro places a call to some heavenly icons.
Hello, Angels.
- "Charlie's Angels" was a huge, massive success
in the 1970s.
You've got these three kick-ass, bad-ass female leads.
It was a no-brainer to create
an action figure line based on them.
The dolls are pretty like Barbie,
yet action-packed like Joe.
And with three characters,
Hasbro believes each child will want to buy all three.
Unfortunately, sales are dismal,
and with G.I. Joe's numbers,
continuing to decline each year,
Hasbro loses over $5 million in 1978,
forcing them to shelve the Angels and their iconic soldier.
A year later, the company suffers an even more
devastating blow when Merrill Hassenfeld dies.
His son, Stephen Hassenfeld, takes the reins,
and there's even talk of splitting up the company
since the only breadwinner right now is the pencil division.
No wonder they're only number two.
Hasbro needs a miracle,
and they might just get that miracle on ice?
Five seconds left in the game.
Do you believe in miracles?
Yes!
It's 1980,
and after nearly a decade of declining sales,
Hasbro has been forced to shelve their star-studded soldier.
And while the company is struggling,
their new CEO, Stephen Hassenfeld,
isn't ready to surrender just yet.
- In the 1980s, you have the miracle on ice,
where the US Olympic team beats the Russians.
So, American patriotism is swelling up,
and you see this in big feature films and TV shows.
What a perfect time for Hasbro
to reboot G.I. Joe with a brand new name,
G.I. Joe A Real American Hero.
And to help with the reboot,
they approach a rising comic book company.
One that will go on to create some
of the highest-grossing movies of all time.
- Hasbro needed to redo the narrative of G.I. Joe
as a real American hero,
and take it away from the direct combat
that it had represented in the 60s.
Especially, as a result of the Vietnam War.
So, they turned to Marvel, who are master storytellers,
and masters at coming up with origin stories
to create this new mythology, really,
and this narrative structure for G.I. Joe.
And while they hope the new backstory will be huge,
the new action figures will be tiny?
- In the 1960s, G.I. Joe is a 12-inch doll.
Hasbro took a cue from "Star Wars" action figures.
When Kenner made the toys smaller,
they were able to save production costs,
and that's exactly what Hasbro did.
- Let's do this.
Joe 2.0 is ready for action.
And he more than answers the call of duty.
1983 sees an all-time high $50 million in sales.
- G.I. Joe catapulted
Hasbro to levels it had never achieved before.
With Mattel firmly within reach,
Hasbro wants to transform their reputation even further
from major player to number one.
That's exactly what they do
thanks in part to old tin cans?
- After World War II,
Japan is actually trying to rebuild their economy,
and Takara Toys, based in Japan,
actually starts using something that
World War II soldiers left behind, empty tin cans.
They take these tin cans and they start fashioning
robotic windup toys out of them.
By the early 1980s,
these windup toys called Diaclone and Microchange
evolve into even more sophisticated robots
that can transform into vehicles.
When Takara shows them off at the Tokyo Toy Fair,
Hasbro executives there to scout product ideas,
love the concept.
Especially, the fact that kids
can get two toys for the price of one.
So, they quickly buy the rights,
and change the name of these transforming robots
to what else, Transformers.
But just a few months before Hasbro
is set to release them in stores,
another company announces their own
transforming robots with this commercial.
Gobots, invasion has begun.
Gobots from Tonka.
- In business, we typically say,
get to the market first, grab market share.
Hasbro now has a choice to make,
they have to go head-to-head against Tonka,
or they risk losing millions of dollars.
Taking a page from
their successful G.I. Joe reboot,
Hasbro, once again, turns to Marvel for help.
- It's a lot less expensive to produce a comic book,
and as it becomes more popular kids buy more toys.
Then, you have the revenue to create
the greater stories, the animated series.
And of course, the rest was history.
In short order,
the new cartoon and comic book
helped rocket Transformers into the stratosphere,
raking in $115 million in action figure sales,
crushing the Gobots who eventually go-
- Bye.
The massive revenue surge
also allows Hasbro to expand,
and buyout one of the most iconic game makers in America,
Milton Bradley.
Now, owning the rights to hits like Battleship,
Life, and Candyland,
Hasbro finally surpasses Mattel for the number one spot.
but it's a move that will come back to haunt them,
and turn this robust rivalry into an all-out war.
In the mid-1980s,
Hasbro finally passes Mattel to become
America's number one toy maker.
- Mattel and Hasbro jostled for the position
of the number one toy company in the world for many years.
Not content with their new status,
and to stand out Hasbro's new doll
will have a rockstar edge to reflect the new MTV generation,
but just as they're about to launch Jem and the Holograms,
Mattel beats them to the stage.
I'm gonna get you
- Somehow Mattel got wind of Hasbro's plans
to create a Jem doll,
so Mattel came up with the idea
They already had the infrastructure in place,
so they managed to beat Hasbro to market.
Despite clever ads
with catchy lyrics like this one,
Jem sales are not
Truly, truly, truly outrageous
Hasbro stops production
just over 18 months after launching,
and fall out of their briefly held number one spot.
It's not over now
But what's worse,
a few years later,
their attempt to take on Barbie causes
- So, in 1996, Mattel launched a hostile bid for Hasbro.
With an offer of $5.2 billion,
nearly double Hasbro's current valuation,
the now number two toy company would be foolish to say no.
But when Hasbro refuses the offer,
their valuation plummets,
threatening the future of their entire company.
Looks like they need a hero to save the day.
Buzz Lightyear to the rescue.
Sort of.
- Hasbro executives we're strategizing,
what should we make next?
And someone brought up the concept of "Toy Story".
If a movie can be so successful
based on these fictional toys,
why not create entertainment based on their real toys?
The obvious choice to make the leap
from action figure to action star, G.I. Joe.
But then, the war in Iraq has execs second guessing a movie
about a renegade American soldier
fighting enemies overseas.
Since Joe's success lives and dies
based on the country's feelings of patriotism.
If only they had another toy,
they could give the Hollywood treatment.
Oh wait, they do.
And in 2007, the revolutionary CGI extravaganza
that is the "Transformers" movie
hits screens across the country,
grossing over $700 million worldwide.
Eventually, spawning four sequels
that will gross $4.8 billion.
- The "Transformer" movie for Hasbro
was a watershed moment for the company.
It basically told them we can do this.
We can take our toys and start making big feature films
based on our own intellectual properties.
And when you do a film based
on your own intellectual property,
you get to keep all the money.
The taste of Hollywood glory
has Hasbro hungry for more,
and still searching to serve Mattel
some much needed payback.
So, using their Tinseltown success as leverage,
they convinced Disney to drop Mattel
and give Hasbro the rights to make
their entire line of princess toys.
The move isn't just shrewd,
it's as cold as ice,
since it means Hasbro is the first company
allowed to make these snowy sisters.
- "Frozen" was a highest-grossing
animated movie of all time, at that time.
They didn't know that it was going to become
this huge phenomenon, but you know,
never bet against Idina Menzel.
The billions in sales, once again,
help push Hasbro pass Mattel
as the number one toy maker in America.
And guess what?
It's a title they still hold today.
Now, worth over $5 billion.
In addition to the iconic toys they created,
Hasbro also owns the rights to hit brands
like Tonka, Nerf, Play-Doh, Monopoly, Scrabble,
and the entire line of "Star Wars" action figures.
Guess the Force is now with Hasbro.
- Hasbro was such an integral part of all of our childhood
that I think everyone really holds
a real piece of Hasbro close to their heart.
Proving that,
just like their classic commercials say,
when it comes to Hasbro there's...
More than meets the eye