Licensing deals are launching a new era of growth at Mattel

Mattel’s intellectual property-focused strategy is blasting off this summer.

On Thursday, the 77-year-old toy company announced a multiyear licensing deal with SpaceX that will result in a new line of space-inspired toys. Specifically, Matchbox plans to create miniatures modeled on SpaceX’s launch vehicles, while “astro-inspired collectibles” will be released on Mattel Creations, the company’s direct-to-consumer platform.

With the effort, Mattel is seeking to inspire the “space explorer in every kid."

“We take pride in our ability to create products and experiences that honor cultural moments and inspire humankind,” said Nick Karamanos, SVP Entertainment Partnerships at Mattel, in a statement.

It’s one of a number of partnerships Mattel has launched recently.

Timed for Earth Day, Matchbox announced another collaboration with a Musk company, as Tesla served as the model for the first carbon-neutral toys. Previously, Mattel also released a cybertruck that had to be assembled in 3,283 pieces, complete with the cracked windows from 2019's infamous shattered reveal.

Barbie, another toy from the Mattel collection, has meanwhile been transformed by collaborations with icons like the late David Bowie (another Mars explorer) and Dr. Jane Goodall that resulted in dolls in their likeness. Fittingly, the latter is made of eco-friendly plastic, and includes a replica chimpanzee.

After 63 years, Barbie continues to have cultural relevance. That's why she's at the center of one of the highest-profile projects currently in Mattel’s portfolio, and one that points at the company's wider strategy related to partnerships and intellectual property more broadly. Directed by Greta Gerwig and starring Margot Robbie and Ryan Gosling, a coming live-action film is set to add dimension to the doll.

Showing that Barbie hasn’t she hasn’t lost her touch as a fashion icon, teaser images from the film touched off the fashion trend of the summer, even as the film isn’t set to be released until 2023. Barbiecore is making that certain shade of pink the must-have color for red carpet designers and home goods (Think dream house.). At this point, it has transcended the movie, and even the doll itself. From Hunker:

"A much-welcomed mood-booster after the last few years, 'Barbiecore' is all about embracing vibrant hues — particularly the doll's signature hot pink — in everyday life," Etsy trend expert Dayna Isom Johnson said. "And with many nostalgic for simpler, sunnier, and more carefree times, it only makes sense that this '80s-inspired, unapologetically pink aesthetic is taking center stage as the 'it' style of the summer."

Added Mattel SVP and global head of design Barbie & fashion dolls to the New York Post, "We are here for it."

The snowball effect that produced this craze started with a 2019 licensing deal between Mattel and Warner Brothers that allowed the IP behind Barbie to be used in a movie. It was the first agreement of its kind to be signed under a then-new division called Mattel Films.

Now, Mattel CEO Ynon Kreiz says that intellectual property is key to Mattel’s identity, and its growth. When he took the top position four years ago, the company was in crisis. As part of a turnaround strategy, the former CEO of Fox Kids Europe and production company Endemol mapped out a strategy to activate fandom and cultural appeal around the company’s portfolio of toys. Boosted by increased demand in toys during the pandemic, the company reported that sales were up by the end of 2021. It has only continued in 2022, with second quarter sales rising 20% at the company even amid 40-year high inflation and more of a return to pre-pandemic habits.

In the first quarter of 2021, Kreiz declared that, “The turnaround is now complete.” On the same earnings call, he laid out a vision for future growth by adding that Mattel will be rebranded as an "IP-driven high performing toy company."

(Image via Mattel)

Centering intellectual property as an asset rather than the physical toys themselves, the company is focused on the content first, and its goods second. From CNBC:

The other piece of the process is making quality content, not just films and TV shows tied to toy lines.

“Don’t try to sell toys,” he said. “We know that in success, if people watch the movie, and there’s high engagement, good things will happen. We know how to sell toys, where the opportunity is really about quality entertainment, based on our IP.”

Barbie is just one of many content activations. It is also planning movies for Hot Wheels and even the Magic Eight Ball. And earlier this week, it announced that it is reintroducing the decades-old toys Major Matt Mason, Big Jim and Pulsar. The goal, VP of Global Marketing PJ Lewis told the New York Times: “maintain the validity of our IP and decide what’s next.”

In an established media model of past merchandising strategies, characters seen in culture and entertainment content became toys.

Mattel's strategy flipped that on its head in a convergence of the kind of cultural moments that Musk and Barbie can inspire, along with content and commerce. In the process, it's bringing the company's toys into a new era.

Talk about opening new frontiers.