R/C manufacturers respond to the category’s continuing sales decline.
R/C toys can perform incredible feats, from flying hundreds of feet in the air and exploring on water to executing tricks and flips on tough terrain. Yet, for the second year in a row, the R/C category has seen a decline in sales and performed below the industry average. According to The NPD Group, ground, sea, and other R/C saw a 12.3 percent decline over 12 months ending in January, while air-specific R/C sales decreased by 32.1 percent — nearly double its 17 percent decrease in the previous 12 month period.
Last year’s sales performance hasn’t stopped major players in the category from producing new R/C products, but it is clear that the category is changing. Companies are incorporating new technology, relying on popular licenses, and introducing new ways to drive. For example, Maisto Tech’s Cyklone Drift features 40 small wheels to increase range of motion, and its Rock Crawler Pro Series 4WS features true four-wheel steering.
When you look at this year’s new R/C offerings, however, one difference is hard to ignore: There are nearly no new drones.
The Drone Days Are Over
From 2015 to 2017, drones ruled the R/C category. The Toy Book covered R/C with headlines such as “Drone Domination,” “Game of Drones,” and “Flying High Tech,” while the category met or exceeded the industry average. Drones flew higher, longer, and with increasingly intricate features and designs inspired by popular licenses.
Last year, the number of new drones began to wane. This year, drones have all but disappeared from toy companies’ new product lineups.
Gerrick Johnson, director of BMO Capital Markets, says this drone bust comes from high investment, thin margins, and too much competition. Liolios Managing Director Sean McGowan agrees, noting that, as with many trends, the “faddish nature faded.” Also, he says, people don’t really collect drones.
“If you want one, you buy it, and you are unlikely to buy another one,” McGowan says. “If it keeps working properly, you don’t need another one, and if it isn’t working properly, you don’t want another one.”
The nature of drones, too, puts their play value at risk. McGowan notes that flying toys’ limited battery life impacts the length of time kids can play, and outdoor use means drones can break or end up on the roof — resulting in frustrated customers returning the product.
License to Sell
R/C vehicles continue to sport a variety of licenses, including Spin Master’s new Monster Jam vehicles and Mattel’s Imaginext DC Super Friends Transforming Batmobile.
One recent, significant R/C licensing deal was when Jada Toys acquired the vehicles license for Ryan’s World, based on the popular Ryan ToysReview YouTube channel.
According to Darryl Li, marketing director at Jada Toys, the company was a bit skeptical of the license at first because kid influencers are so new to the toy market. However, the company saw an opportunity to further expand its preschool portfolio and move away from its reputation as a die-cast company for collectors.
Li says the partnership was a fun challenge because, unlike many other licensing partnerships, there were very few guidelines. “Ryan is just a 7-year-old kid,” Li says. “He likes what typical kids like. He likes pizza, he likes slime, and all that good stuff. … If that’s all our creative team has to go off of, it’s a nice challenge to see what kind of collection of toy products we could put together that Ryan himself would enjoy.”
One product in Jada’s Ryan’s World line is the Skateboard Stunt R/C Combo Panda, which is based on a character from Ryan’s channel. Kids as young as 3 years old can control the panda — who rights himself when he falls over — using a colorful remote.
Carrera, a company known for its slot cars and other R/C products, introduces a new Battery Operated slot car system to appeal to a younger audience. These new sets bridge the gap between Carrera’s “First” system, which is designed for kids ages 3 to 5, and its “Go!!!” series, which is recommended for kids ages 8 and up due to the electric components. The Battery Operated system, like many of Carrera’s products, incorporates Nintendo characters.
Tony Donoso, e-commerce sales and marketing manager at Carrera, says the Mario license appeals to kids and adults alike. “The moms and dads who grew up with Nintendo, I mean, they still love Mario Kart,” he says. “And I think that’s a big hit for everybody.”
In a world ruled by content, Li says most retailers expect licensed products based on familiar characters and year-round content from shows, games, and movies. “It’s just really hard to make it onto shelf when there’s no content supporting your product,” he says. “That’s really what [retailers] look for.”
Lights, Sounds, Tech
In addition to introducing licenses, R/C manufacturers are continuing to add new tech components to their products to attract consumers. “Miniaturization and the addition of cameras, wifi, and other technology continues to expand,” McGowan says, “because the cost of these features keeps dropping, even as the quality increases.”
One example is Odyssey Toy’s new FPV ATV. FPV stands for “first person view,” because the vehicle features a camera on top that can live stream and record video on a smart device. Kids can choose to drive the vehicle using a standard remote or using a smart device.
Though the technology may not be cutting edge, Li says many R/C products have started incorporating lights and sounds this year, too. Alpha Group’s Grrrumbal, for example, is an R/C creature with light-up eyes and monstrous sound effects. Grrrumbal also features two modes, which is another popular R/C feature this year. NKOK’s new Earth Movers line similarly offers two modes — auto and manual — which kids can choose between using a switch on the remote.
Looking Forward
As a category, R/C is certainly in a time of transition. Like many in the toy industry, Li says the loss of Toys “R” Us had a major impact on Jada Toys and other R/C manufacturers. “The support system that was once there is no longer there,” he says. “So we have to be a little bit more strategic in how we operate.”
In the case of R/C, being strategic means adding product features and marketing them in new ways. McGowan’s advice for keeping the category vibrant is innovation and adding tech components. “Complex programmability will help,” he says. “Modularization could help. Battery innovation will help.”
However, Johnson cautions to remember ease of use. “Too many R/C toy companies think its novel and cool to have the vehicle controlled by your phone,” he says. “Don’t make things too complicated. Don’t try to do too much.”
Both Li and Donoso say they expect things to look up this year and beyond with their new offerings. “As we look forward into 2020 we’re looking to really make a big splash within the category,” Li says. “So we’re really excited.”
This article originally appeared in the March/April 2019 issue of the Toy Book.
