Accelerating Change: COVID-19 pushes Mattel, Funko, and Others to Pivot and Prevail

The Child arrives at the Mattel Showroom at TFNY 2020 | Source: The Toy Book

Everyone can agree that the past year was beyond what anyone could have predicted when the toy industry last gathered at Toy Fair New York (TFNY).

While some product samples were missing and the occasional fist or elbow bump came into play — in lieu of customary handshakes and hugs due to the looming overseas threat of a “novel coronavirus” that caused hiccups in production and knocked out travel from China — nearly 24,000 attendees made plans to deliver a big year in play with an exceptionally strong lineup of new toys and games for 2020. What no one saw coming was that some of 2020’s biggest hits weren’t on display in The Javits Center because they hadn’t even been designed yet.

“It’s been a whole different world since Toy Fair,” says Mattel President and Chief Operating Officer Richard Dickson. Mattel, which has been in the midst of a multiyear transformation effort, used its usual top-floor spot in the River Pavilion at TFNY to formally kick off the company’s 75th anniversary celebration. The company laid out plans for its iconic brands — including Hot Wheels and Barbie — while debuting new lines alongside licensed products inspired by some big summer movies, including Minions: The Rise of Gru and Top Gun: Maverick.

Funko showroom at TFNY 2020 | Source: The Toy Book

Downstairs, Funko was doing big business and had heavy foot traffic as it entered its third year as a publicly-traded company. The company was just on the cusp of revealing a 16% increase in net sales for the previous year and an 11% spike in gross profit. At TFNY, the company revealed plans to diversify into toys, games, and lifestyle offerings after years of leaning heavily on its ubiquitous signature line of Pop! Vinyl Figures.

Just three weeks later, the world was blindsided by COVID-19’s spread, which instantaneously derailed the best-laid plans.

“As soon as we hit the fact that this was truly a pandemic, we realized that we needed to react quickly on a variety of fronts,” Dickson says. “First and foremost, we focused on the health and wellbeing of our own people at Mattel, ensuring that we were accommodating for all safety issues, health issues, and the need to work from home. Running parallel to that, we are driven by the needs and wants of our consumers.”

Thank You Heroes
#ThankYouHeroes | Source: Mattel


By spring, Mattel joined other companies, including Funko, Basic Fun!, Disney, Hasbro, Jazwares, MGA Entertainment, Playmobil, Spin Master, ZURU, and more, in working to address global shortages in essential supplies. The industry united in creating and sourcing personal protective equipment (PPE), including masks, respirators, and visors for healthcare workers. Meanwhile, smaller companies, such as Crazy Aaron’s and ORB Factory, shifted production lines to hand sanitizer while Vermont Teddy Bear began sewing masks in-house.

“Throughout 2020, we raised the bar on our commitment to corporate citizenship, in support of our consumers, customers, business partners, and the communities in which we live, work, and play,” says Mattel Chairman and CEO Ynon Kreiz. “When the COVID-19 crisis began, we launched the Mattel Playroom, a free online destination featuring activities and content from our iconic portfolio of brands; Play it Forward, an initiative that leverages our brands to raise awareness of and give back to important causes; and #ThankYouHeroes — a line of toys that celebrates the first responders leading the fight against COVID-19.”

Similarly, Funko unveiled a Frontline Heroes Pop! Vinyl assortment in May. The masked-up versions of doctors and nurses were a hit at retail and following Funko’s donation to Global Giving’s Coronavirus Relief Fund, BoxLunch and Hot Topic committed to donating all of their net proceeds from sales of the figures to the same organization.

The gates of Funko Fair | Source: Funko/The Toy Book


Just days after TFNY, ReedPop kicked off the fan convention season by welcoming 95,000 attendees to Chicago’s annual C2E2 event. Amid the comics, collectibles, cosplay, and celebrity guests, a new piece of merch maintained a presence at booths: hand sanitizer pumps.

By the close of the show, plans for ReedPop’s next event, Emerald City Comic Con (ECCC), were in doubt. Soon after, plans for the two largest fan events in the U.S. — Comic-Con International: San Diego (SDCC) and New York Comic Con (NYCC) — vaporized alongside the revenue streams that come with them.

Eyeing a prospect of being clipped at the knees with the potential for a sales decline of 60% or more, according to CEO Brian Mariotti, Funko ramped up its efforts to go direct-to-consumer.

“The team looks forward to the day we can return to engaging with the fans at live events, but have proven that you can still lean in with your community with virtual con experiences and delightful content like our monthly FUN TV episodes hosted by [Funko founder] Mike Becker and myself,” says Funko CEO Brian Mariotti.

Related: SDCC: 9 Must-Watch Toy Industry Panels from Comic-Con@Home

Similarly, Mattel found itself in a conundrum with live events. While not as attached to the traditional convention circuit as Funko — with the exception of a large annual presence at SDCC — the company’s plans for the third annual Hot Wheels Legends Tour; the international expansion of Hot Wheels Monster Trucks Live; and some unannounced events tied to Mattel’s 75th anniversary, Fisher-Price’s 90th anniversary, and the 75th anniversary of Thomas & Friends were out.

“There’s no doubt that some of the celebration plans we had were a bit dampened by living in a pandemic,” Dickson says. “We couldn’t do live experiences, and we had some great pop-up shops planned and some other experiences that would’ve been exciting.”

In an effort to continue connecting with both families and the collector market, Mattel took the Hot Wheels Legends Tour virtual — and international — to continue its traveling car show to find the next independently built vehicle to be immortalized as a 1:64-scale, die-cast Hot Wheels toy. The event culminated in a livestream from Jay Leno’s Garage in Los Angeles, featuring well-known names like Snoop Dogg. Mattel followed that with a virtual Fisher-Price Museum hosted on Instagram that quickly went viral last fall.

Source: Mattel/The Toy Book

The company also launched an unexpected new platform to present toys as art under the name that was displayed on the California garage that housed the original version of the company in 1945: Mattel Creations.

The platform offers limited-edition “drops” in collaboration with artists and brands, including Stussy, Madsaki, Frank Kozik, and others paired with Mattel brands such as UNO, Masters of the Universe, and the Magic 8 Ball. The platform is fueling a new revenue stream that Dickson believes will continue for years to come.

“We recognize that when we do these drops, there is significant demand,” Dickson says. “We are selling out in minutes, and sometimes seconds. It’s exciting and fun and indicates that this could become a much bigger business. But we’re balancing that these are limited runs and learning the balance between creating the collectible scarcity that some fans want while still pleasing as many people as possible. It’s quickly become a new place for existing fans and new ones to experience the joy of collecting toys.”

Digital experiences, including virtual platforms and conventions, look to become a permanent fixture that’s here to stay. Even after the world opens back up, in-person events will be accompanied by digital components to reach consumers at home, and until then, virtual conventions will continue to grow.

By fall, Hasbro went virtual with Hasbro PulseCon; Super7 jumped in with its Stay At-home-ic-con; and companies such as NECA, Mezco, and Sideshow, had all thrown virtual events or expanded the availability of their products online. By year’s end, Funko’s reimagined web store offered more than 2,000 products, compared with just 200 during TFNY.

“After we successfully hosted several virtual cons last year, the team came together and decided to host our very first Funko Fair, which took place in mid-January,” Mariotti says. “Fans look to us to create experiences that continue to foster a feeling of community, and that’s exactly what we did.”

This is Fine Dog | Source: Funko/Entertainment Earth


The pandemic forced changes that were inevitably coming down the line anyway as the year shortened the distance to the goal post. The long-touted usual 18-month, concept-to-shelf cycle of the toy industry was already shrinking, and last year, it shrunk even further.

For Mattel, getting its #ThankYouHeroes collection to market by year’s end was unexpectedly aided by Grogu, the breakout star of The Mandalorian.

“We’ve been working on speed-to-market for some time in our basic day-to-day business and had some success there,” Dickson says. “Look at The Child, or Baby Yoda. That was a blockbuster success, and the moment we knew that we could do that product, we were the first out with it and it’s been an enormous hit for us. In many ways, The Child prepared us for the COVID-19 pivot and the world is moving at a record pace. Be nimble. Be quick.”

Mattel’s 11-inch plush version of The Child hit the market in under six months and topped the NPD charts as the No. 1 bestselling plush of the year and won a Toy of the Year Award in the plush category.

One of Funko’s biggest hits was inspired by a widely-shared meme that millions have used to describe 2020 as a whole: “This is fine.” The frame from KC Green’s 2016 Gunshow comic strip features a coffee-drinking dog who calmly sits as the world burns around him. Funko immortalized the meme as a 3.75-inch Pop! Vinyl figure that would’ve debuted at NYCC had it not been canceled. Instead, the figure became a hit offered for sale through Entertainment Earth.

Etch A Sketch Pool Float | Source: Mighty Mojo Toys


At New York-based B&B Systems, the spread of COVID-19 created both challenges and opportunities. On one end, B&B serves as an omnichannel, e-commerce partner that works with toy industry clients to sell toys through online marketplaces on Amazon, eBay, and Walmart. That could mean simply managing warehousing and fulfillment, or the company might step in and buy overstock product from toymakers, in which case the company becomes a reseller. On the other end, B&B was supposed to expand in 2020 with in-house toys and licensed products as Mighty Mojo Toys.

According to Ariel Moghaddam, vice president of both B&B Systems and Mighty Mojo, the company experienced an unexpected duality in its business — the first hints of which emerged when Mighty Mojo’s product samples didn’t arrive in time for TFNY following factory shutdowns in China.

“When the pandemic hit, we were in a great place on the distribution side because we suddenly had overstock to shop from,” Moghaddam says. “The supply chain issues created excess product that no one expected, and major companies were eager to have a partner to help take some of that product, and, in turn, take some of the pressure off.”

B&B shifted focus to the spike in the overstock business while nearly all of Mighty Mojo’s initial product offerings were pushed into 2021, including licensed party-in-a-box, pool inflatables, watches, and puzzles branded under Etch A Sketch, Tetris, and more.


Perhaps the most welcome side effect of the pandemic is that families had the chance to spend more time together than ever before.

“There was a moment in time when people would debate if toys were relevant anymore because of the dialogue that kids were having with their digital games and screens,” Dickson says. “I think the COVID-19 experience has returned the value that people place on traditional toy play and the importance of unlocking imaginations through what we do as an industry.”

According to The NPD Group, traditional play categories spiked last year as the toy industry bucked the odds and experienced a record 16% sales growth. Even with a lack of theatrical movie releases and a shift to streaming entertainment that tossed licensing agreements and timelines to the wayside, the ability to rebound was remarkable.

“Our evergreen properties continue to be a huge part of our business,” Mariotti says. “We’re fortunate that we’ve been able to maximize on the popularity of all of the new streaming content between Netflix, Disney+, Amazon, etc.”

Related: Licensing’s COVID Conundrum: Movie-based Toys and Their Films Are Completely Out of Sync


There will be no looking back on 2020 with rose-colored glasses, as even companies who were labeled as successful faced tough times. Both Funko and Mattel joined many in the industry in making painful decisions that led to furloughs and layoffs along the way. But now, approaching the end of the first quarter of a new year, the hiring process has begun again as the business evolves.

In Everett, Washington, Funko is continuing to diversify its product mix through news lines, such as Snapsies and Marvel Battleworld, and the continued growth of Funko Games as it develops new ways to keep fans engaged and entertained across its categories.

“We could not be more impressed with how our company has responded to the remote working environment,” Mariotti says. “The high performance of our teams — who strive daily to create products and programs to delight our fans — puts us in a terrific spot for 2021.”

Down in El Segundo, California, the Mattel team is tapping into its legacy to craft toys, entertainment, and live events that will unite generations of families while setting the stage for new adventures yet to come.

Dickson notes that outside of the walls of Mattel, the industry at large made great strides in adapting to a new normal that isn’t here yet and may not be for some time.

“Other companies that have a strong foundation of why they exist pivoted very quickly,” Dickson says. “I believe that the toy industry as a whole did a great job for our consumers and retailers in driving toys to be recognized as a very important category for families.”

A version of this article was originally published in the February 2021 edition of the Toy BookClick here to read the full issue!

About the author

James Zahn

James Zahn

James Zahn, AKA The Rock Father, is Editor-in-Chief of The Toy Book, a Senior Editor at The Toy Insider and The Pop Insider, and Editor of The Toy Report, The Toy Book‘s weekly industry newsletter. As a pop culture and toy industry expert, Zahn has appeared as a panelist and guest at events including Comic-Con International: San Diego (SDCC) Wizard World Chicago, and the ASTRA Marketplace & Academy. Zahn has more than 30 years of experience in the entertainment, retail, and publishing industries, and is frequently called upon to offer expert commentary for publications such as Forbes, Marketwatch, the Wall Street Journal, the New York Times, USA Today, Reuters, the Washington Post, and more. James has appeared on History Channel’s Modern Marvels, was interviewed by Larry King and Anderson Cooper, and has been seen on Yahoo! Finance, CNN, CNBC, FOX Business, NBC, ABC, CBS, WGN, The CW, and more. Zahn joined the Adventure Media & Events family in 2016, initially serving as a member of the Parent Advisory Board after penning articles for the Netflix Stream Team, Fandango Family, PBS KIDS, Sprout Parents (now Universal Kids), PopSugar, and Chicago Parent. He eventually joined the company full time as a Senior Editor and moved up the ranks to Deputy Editor and Editor-in-Chief.