EG is Hasbro's most profitable MLP product?
I keep hearing this line being thrown out there like a harbinger of doom. "EG is making Hasbro more money! FiM is dead! Abandon ship!" What's my reaction upon first hearing this news? AAAAAAAAAAAHHHHHHHHHHHHH!!!!!!11!1!1!1!!!2. DO NOT WANT!!!! SAVE A LIFEBOAT FOR ME!!!!
But a funny thing happened, I thought about what they were saying. The claim is that the EG toy line is a more profitable product than their ponies. It sounds alarming at first, I know I shat a few bricks, but let's take a deep breath, change our pants, and take a look at this a little closer.
By "more profitable product" they mean that they are making more money per unit than any other product they make. However, "most profitable product" is NOT the same as "most profitable product line".
Let's take a look at the EG dolls. They usually retail for around $20. Between manufacturing costs, packaging, shipping, marketing, etc they probably cost around $12 to produce. That's a profit of $8 a unit. Not bad, not bad at all.
Let's take a look at your standard brushable pony. They usually retail around $7. Let's look at costs: they've had 20 years of experience in how to lower the manufacturing costs, packaging is smaller than the dolls and therefore cheaper, shipping is less because they can pack more ponies in a box than dolls, and the brand has been around for 20+ years so it's well established and needs little marketing. With all that taken into consideration, the ponies probably cost about $3 to make. A profit of $4
Only $4 per pony? The EG dolls make double that! Abandon ship! Well hold on. While the dolls make more money per unit, they're also more expensive to buy. Let's say a kid is given $25 for her birthday and she needs her pony fix. She goes to the store and sees a Rainbow Dash EG doll for $20. Perfect! But she also sees a Rainbow Dash pony for $7. And an Applejack pony for $7. And a Twilight pony for $7. That's $21, I have enough for 3 ponies! Yay!
If she buys the EG doll, Hasbro will make $8. If she buys the ponies, Hasbro makes $12. See where I'm going with this? Toys are a volume game. They need to sell as many toys as they can to make money. Therefore cheaper toys make them more money. Plus, the pony line has been established for years. Mothers who grew up with the ponies are going to get their kids what they grew up with: Ponies! Not the dolls.
It's like Chevy and Cadillac for GM. Cadillacs make more money per unit for GM, but the volume of sales Chevy has makes way more money. Does that mean Chevy is going to get rid of either one? Hell no!
Whether you like EG or not, EG is the one that has to prove its worth here. It's a new IP in an over saturated market. The ponies are a long established guaranteed seller that makes bank when there's a show to support it. So let's all breathe easy knowing that FiM and it's ponies aren't going anywhere.
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