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Hello everybody. I just had an interesting e-mail exchange with Louis Corrigan about his comments on Hasbro in the Phantom Menace special and the Dueling Fools section. I'm interested in hearing what thoughts anyone else might have on the subject, so with Louis' permission, I'm reposting the pertinent sections of our exchange.

I wrote in response to the toy section of the Phantom Menace special:

"Hasbro has been making Star Wars toys since 1995 through its Kenner brand, a brand name which has since been discontinued. In fact, the action figures and vehicles that have formed the bulk of Star Wars toys merchandising over the last four years have always been Kenner/Hasbro products. Galoob concurrently held a license to make smaller toys as part of its Micro Machines line. Both companies renewed their licenses for toys based on the old Star Wars trilogy with Lucasfilm in 1997 and also acquired the rights to produce toys based on the prequels at that time. It was only later, as Galoob ran into difficulties, that it sold to Hasbro. In short, Hasbro has been making money from Star Wars for a long time, including the 1997 re-release of the first three films, and I have to wonder how much the spike in interest for toys related to Episode I will really help the company long-term. Given your support of Hasbro in the Dueling Fool section, I expect you to disagree, but I can't be sure how much of your reasoning is based on inaccurate information. For example, you cite the high bids on various Star Wars toys on eBay as an indicator of the demand. What's important to realize is that those high bids are usually on figures that are out of print or were produced in small quantities -- in other words, Hasbro either does not have the capacity to meet the demand for its products, or it deliberately undercuts the supply to fuel demand in the after-market and thus enhance the perceived "collectability" of the toys among those who think that an unopened, mint-on-mint-card Darth Maul figure is a better investment than IBM. Look in any Toys R Us, KB Toys, or Wal-Mart and you'll find plenty of Star Wars figures, not in demand by collectors, languishing on the shelves."

Louis replied:

"As for Kenner, I didn't mean to imply that Hasbro had only recently acquired the rights to Star Wars merchandise with the Galoob deal, only that that was one of the main attractions about Galoob, which offered the licensing arrangements to allow Hasbro to nearly monopolize the Star Wars toy trade at this point. Clearly, the old stuff was mostly Kenner and Hasbro already had the rights for that (though they needed to be renewed).
As for the collectables market, I use the demand on eBay as simply a sign of the overall demand. Hasbro is churning out the product for Menace; production capacity won't be an issue. So there won't be much of a collectables market for the new stuff, at least not for long. That may in turn reveal the spike in values for the older merchandise to be classic market peak. But clearly the hype about Star Wars stuff being worth collecting has driven some of the initial sales, at least from the numerous published reports I've read."

I have my own thoughts on Louis' reply, but since it in many ways just reaffirms some of the things I said in my first message, I'd be more interested in hearing what others have to say. Take care,

Dave

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