I think the creative toy is the future and the Mega purchase wasn't just blocks. Besides at least they tried something different for once. It was actually making an effort to venture into a new category. Most of the backward thinking processes that has lead to the coming 4 horsemen (declining revenue, backward thinking, tightening spending, declining R&D) is the reason that this purchase has shown some glimmer of hope in the future of Mattel. Just because the Mega brand was 3rd in the US doesn't mean it can't be the one major bright spot at Mattel in the coming years. The creative toys are the future as the entertainment toys will eventually go fully digital, and the Mega brand has a lot to offer in the creative area. The question is will Mattel have the patience and the vision to embrace the creative toy and expand on it. I mean take hot wheels, why hasn't anyone at Mattel thought about allowing kids to somehow customize their cars, this is what kids want. Kids are no longer about being the same they want to show their uniqueness and creativity. This is why Barbie (a static figure for far too long) is being outsold by the latest craze (e.g. Elsa/Frozen) and eventually the next Disney or Pixar princess. Barbie needs to change dramatically and it needs to be customizable in more than just the clothing.
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That's what I said - Mattel will literally need to spend BILLIONS in marketing,distribution and design to create VIABLE competition, ANd they have to compete with Hasbro (KNEX), playmobil (#2 entrenched in Europe), and the 3-5 other competitors PLUS in store brands - is Mattel able to compete on price? No. For the same price or same price ballpark, unless you're buying a Hello Kitty or COD set, who is going to choose megabloks over LEGO right nowfor a generic set (never mind the licenses that LEGO has - DC, Marvel, Star Wars, TNMT and Disney, Pixar?). They are releasing 331 sets in 2015 ranging from $9.99 to literally $1,499 dollars - megabloks coming up with 300 sets? 200? 100? Megbloks seem to have about 25-35 sets out. They are nice but they will not dent LEGO unless Mattel finds a few hundred millions in marketing and commit to releasing a few hundred sets. That will only get worse - there will be about 5 Marvel/Dc/SW films out every year until 2020. Good luck competing there.
Oh, and Barbie was not outsold by Frozen, and Mattel made a lot of money off of that license before it moves to Hasbro next year. And how exactly is Elsa/Frozen customizable? Barbie has tried everything. But the doll has been commoditized. This means they've cost reduced the brushes, the tchatch items, the package, everything to squeeze every penny from the toy. It's no longer the doll of the past with internal knee joints, and soft vinyl legs. It's been made to be cheap.
Actually Mattel has made several attempts at toys that allow customization. It's a fact that it's the unofficial customization that had sparked the monster high line as every body part from every sculpt could be mixed and matched. People love it, but it's not marketed. Where Mattel has done Hot Wheels customization toys over the years, they didn't sell well. However, part of the problem is that they never let anything build. They see low sales, and kill the toy before it can build a following. The real disaster at Mattel is the requirement for 60% margin. Make good toys, and let marketing sell them, don't make cheap crap to fill a slot and a margin number.
Great in theory but we all know that customization costs money and that is what they are constantly trying to save (wasn't the hot wheels customized car something that was pushed during toy fair 2013 or 14?). Let's face it with the price of oil and the current increases in labor costs in China Mattel (as well as every other manufacturer) is going to need to find another impoverished country to take advantage of before any significant changes are made.
Excellent post Anonymous84540 - you nailed it here.