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It’s Isaac Larian’s 43rd Christmas In The Toy Business. Here’s What He’s Betting On This Year

Toy executive Isaac Larian has made a fortune in the toy business over the past four decades by knowing what kids want to play with. Now, his job also requires him to know what grownup kids want to play with.

The founder and CEO of MGA Entertainment says “kidulting” – the trend of adults driving demand for certain toys – is one of the key reasons he expects his 43rd Christmas in toys to be a good one for his company.

Larian, who started his first toy company in 1979, has seen the industry change from the days when holiday toy sales depended on TV commercials that had to be planned a year in advance of Christmas, to today, when toy launches get announced on TikTok and the right viral video can turn a toy into a bestseller within hours.

MGA, the fourth largest toy company in the world, and the second largest private toy company after Lego, is known for its hits including the ground-breaking Bratz doll line, the L.O.L Surprise dolls and accessories, and its newest doll line, Rainbow High. The company also owns the Little Tikes brand of outdoor play sets and vehicles.

This holiday season the TIkTok trend of adults creating and playing with miniature replicas of foods, and preparing entire miniature meals, inspired MGA to produce a line of toys that lets buyers create tiny milkshakes, waffles, donuts, cakes and other foods out of resin compounds that harden after the creation is complete.

The mini-food kits contain items like a mini can of whipped cream that actually can squirt out a replica dollop of whipped topping, and glasses, plates and tiny utensils to display with the creations. One of the kits launched at Walmart
this month.

MGA also leaned into the mini-toy trend, popularized previously by the Moose Toys Shopkins brand, and toy manufacturer Zuru, by launching miniature versions of its Bratz and Little Tikes toys earlier this year.

MGA is differentiating itself in the mini-space, Larian said, by creating functional, working mini versions of toys.

While he expects that the tiny toys will be popular with youngsters, Larian is betting that the majority of sales will be to kid adults as fun collectibles.

“Kid adults is what is growing the toy business today,” he said.

Kid adults, he said, have more disposable income than kids. And millennials are proving to be nostalgic for toys they played with, or longed for, as a child, such as a Bratz dollhouse, or a Little Tikes basketball hoop. The mini versions of those toys give them something small they can collect and display, or play with on TikTok.

Nostalgia for Bratz, the toy line that made Larian famous in the toy industry, is peaking this year, and boosting sales for MGA.

The brand turned 21 this year – a milestone celebrated with an anniversary edition of the dolls – and Bratz sales are up 100% this year, Larian said.

TikTok has also helped boost the Bratz brand, as various challenges to dress like a Bratz doll, apply makeup like a Bratz doll, or see how you look with a Bratz filter applied to your photo, have gone viral.

The Bratz TikToks were the kind of advertising toy companies dream of – content created organically by TikTok-ers, not corporate marketers.

Larian started his first toy company, called Surprise Gift Wagon, in 1979, He then got the rights to sell mini electronic versions of Nintendo games and renamed the company Micro Games of America. When he later came up with an idea for a doll called Singing Bouncy Baby, and was told by a Walmart buyer that no one would buy a doll from a company called Micro Games of America, he changed the name again, in 1996, to MGA Entertainment.

Adding Entertainment to the name turned out to be farsighted. The big toy companies, Hasbro
, Mattel
, and Lego, in recent years have sought to create movies, and other entertainment content related to their toy brands. MGA capitalized on the entertainment connection early on, creating Bratz animated cartoons and Bratz movies. Last month it announced it was taking its entertainment plans to the next level, with the launch of its own content studio, MGA Studios. As part of the launch, MGA acquired Pixel Zoo0 Animation, an Australia-based animation studio.

“We had entertainment in the name from the very beginning – before it became fashionable” for toy companies to describe themselves as entertainment companies, Larian said.

In addition to tapping into current trends, Larian believes MGA’s assortment of toys at a wide range of price points also gives it an edge this Christmas, as inflation may be hitting holiday budgets. The company’s Miniverse mini Bratz dolls and Little Tikes figures sell for under $10, and brands like L.O.L Surprise have toys that start at $5 and range all the way up to $200 for a large playset.

Being a private company also gives MGA more flexibility in keeping costs down, Larian said.

“Our costs have gone up 23% on products, but I want to make sure every kid who wants to get an MGA toy, or every family who wants to get an MGA toy for the holidays they can afford to buy it,” he said. “So we have not passed a lot of our cost increases to the consumers. We have absorbed a lot of that. And that’s the luxury of being private because you don’t need to report every quarter what your profits were,” he said.

Larian is expecting that unlike the past two pandemic Christmases, parents will be doing a lot of late shopping this month.

Consumers last year were buying toys in October or November because they thought the stores were going to run out,” he said. “Now, they are waiting as they used to do for two weeks before Christmas.”

The toy industry, as the pendulum swings from supply chain shortages over the last two years, to excess inventory for some brands, is “going through a really major adjustment” this year, Larian said.

But he looks at that adjustment with the optimism that comes from surviving 43 years in the toy business.

“Christmas is always on December 25, and I tell my retail buyers it always comes,” he said. “Some years it comes a couple of months before – like last year. This year I think it’s going to come the last two weeks before Christmas.”

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