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How a toy becomes a holiday season must-have

[The elusive Hatchimal/Money]

Hatchimals have become the Donald Trump of the holiday season, igniting a flurry of stories surrounding the sleeper hit including the supposed ruin of a famous author-turned-Hatchimal hawker and tales of parents trading twenty hours of their lives in exchange for the disappointment of nearly clinching the toy.

While there are a few who predicted the success of the toy, the overall majority including Hatchimal’s Canadian creator Spin Master had no idea the speckled eggs, which hatch furry mutant bird-esque creatures like Owlicorns, Bearakeets and Pengualas, would become the “it” toy of the year and sell out.

Some analysts suspect the oversight will cost Spin Master $3- to $9-million in potential sales.


Michelle Liem, a toy analyst with two decades of experience in the industry and director of client development at NPD Group, points out that while there really is no way of knowing what will make a toy succeed there are some common traits amongst past hits.

“I think there are some commonalities… look at Tickle Me Elmo and Furby,” she says. “Certainly Hatchimals falls into that whole electronic, interactive piece which seems to really be one of the more common themes.”

While interaction is seemingly in everything we do in today’s society, these toys – Elmo was released in 1996 and Furby in 1998 – captured the imagination of what would one day be the hyper-connected millennial generation. In addition to riding that innovative interactivity, these Tickle Me Elmo, Furby and Hatchimal all entered the market at a comparable price point with the 1990s iterations in the $50 range while Hatchimal falls closer to $80.

“They’re the right price point – perfectly positioned as that bigger gift,” says Liem. “Parents feel good about that as a purchase for their kids (but) it also has legs in terms of playability because there are so many different interactive features – so it’s not like it loses its lustre quickly, it seems to hold the child’s attention longer.”

[In 1998, Furby was the talk of the town.]

One way Hatchimals differ from their furry peers is the air of mystery that comes with buying something that won’t hatch until 10 to 40 minutes after you get home from the store. Spin Master co-founder and co-CEO Ronnen Harary told the CBC the concept was drawn from that element of surprise, capitalizing on the peculiar success of unboxing videos – a weirdly aggressive video where disembodied hands open up toys and broadcast their scores on YouTube.

“We have an advance concept team, and they had the idea that wouldn’t it be amazing if you could actually do an unboxing like you see on YouTube, but in real life?” says Harary. “And what would be more magical than a character that actually comes out of an egg and comes to life?”

Some of these so-called unboxing videos receive tens of millions of views.

“That’s really fuelling a lot of these collectibles too – (kids can) see what the new series or lines are, what the little characters actually look like,” explains Liem. And then, of course, convince their parents to take another stab at getting the next in the series.

But success can go as quickly as it came.

“It’s a lost opportunity for Spin Master and for the retailers, it’s a tough position to be in – again, you don’t want to overcommit on your inventory,” says Liem. She points out that the company is making (costly) moves to get the product on shelves and the first two weeks of January will certainly help on the sales-front with kids cashing in on gift cards.

“But it’s not going to have the same lustre… Christmas will have come and gone, the ‘hot commodity seal’ (with it) – I would imagine they’ve learned from this,” she says. And like Tickle Me Elmo, which released lost of different versions after that initial success twenty years ago, Spin Master will have plenty of room to build off the first Hatchimal. “Every year there’s a new Elmo but it’s never (successful) to the extent of the first one… that’s the one everyone still talks about.”