"The Barbie Effect" Shifting from a Toy Manufacturer to an IP Toy Company

The "Barbie effect" has truly become a global phenomenon, and it's fascinating to see how brands like Mattel are pushing new business models to maintain their relevance and market position across generations. This leaves the question: Is Mattel striving to take a piece of the IP success Marvel has been enjoying over the past 15 years? And if so, are fan-based and perfectly crafted partnerships the future of entertainment?

Back in 2014, both Mattel and Barbie hit an all-time low, losing traction as consumers became attracted to more modern and trendy characters seen in movies and TV shows. During this challenging period, the product and brand no longer reflected the values and aspirations of younger generations, causing huge losses.

However, in 2018, CEO Ynon Kreiz took a bold step in transforming Mattel from a traditional toy manufacturer into an IP-driven, high-performing toy company. This shift is about to make waves worldwide, with Barbie leading the way as the first success among many to come. I am talking about Major Matt Mason with Tom Hanks, Polly Pocket, Masters of the Universe, and many more.

To put things into context, Mattel's financials show a remarkable turnaround. In 2020, they reported a net income of $126.6 million, a significant improvement from the previous year's loss of $213.5 million. This has been strongly influenced by the IP shift but also by a consumer shift caused by the pandemic when families sought alternatives to reduce screen time and create meaningful experiences and lasting memories away from screens. Mattel seized this opportunity, resulting in a 47% increase in sales in 2021.

So, with toy sales on the rise thanks to the pandemic and the IP business model booming with the recent launch of the Barbie movie with Margot Robbie, Mattel aims to create a lasting impact with its brand portfolio, inspired by the success of franchises like Marvel. The strategy involves extending the brand's presence into media, movies, TV shows, and other digital content. By doing so, Mattel not only keeps its iconic Barbie and future toys relevant but also expands its reach to captivate new audiences and maintain a strong market position. Quite smart, right?

This vision to become an IP-driven company aligns perfectly with their successful financial metrics and keeps their toys' popularity going. But the reality is that this journey from a traditional toy manufacturer to an entertainment franchise is not something new. LEGO, Marvel, Star Wars, and even Nintendo with its latest release “Mario” are just a few companies that have strengthened their brand portfolio through content development and strategic partnerships to keep market relevance in a shifting landscape. So, what is the success factor then? And is there any way to adapt this business model to other markets?

Food for thought…

Mattel, as well as other brands, are heavily targeting nostalgia through well-crafted stories. They want to trigger not only feelings for the character but also build a sense of sentimental attachment that reconnects you with the brand itself, especially with brands that have been life companions and have a special place in our childhood. With brands finding new ways to maintain their relevance, this means that we will be seeing entertainment become a new marketing tool rather than just another revenue stream.

For this to work, storytelling and the product, in the case of Mattel toys, are pretty fundamental. It's all about building strong sentimental value using low-risk strategies and compelling stories with the potential for high rewards.

Consumer brands or even tech companies could also benefit from this IP boom. Building strong collaborations with entertainment industries, focusing on stronger and more compelling storytelling, and increasing their market presence in fantasy worlds. Just imagine if Baby's phone was an iPhone or Ken's watch a Swatch. I guess nothing that we haven't seen before with Coca-Cola or Pepsi, but definitely, something we will be seeing more in the future.

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Food for thought is a small space to share opinions and ideas on topics I find relevant in my day-to-day seeking to bring design into the mix. Comments, ideas, and debates are always welcome.