There's some market talk of privately held Spin Master making a run at Mega, but the latter's $388-million debt load is a big deterrent. Still, Mega's original block business remains strong, with 30% Canadian market share. It's what Bertrand Sr. used to build an international toy giant, before his sons' poor performance on due diligence and crisis management pushed it to the edge of the abyss. In the toy business, says Zicha, "you have to have consumer confidence. If you break the relationship between the consumer and the retailer, you're pretty much done." Mega broke that rule, and it may pay with its life.
Going guerrilla Mega Brands hopes for home run with viral campaign for spinning tops
Whether Mega Brands Inc. survives 2009 will depend a lot on how well it masters guerrilla marketing, a completely new tactic for the company. With Battle Strikers, a line of magnetized spinning tops that is Mega's biggest bet for the holiday season, it hopes to create a viral sensation on the scale of Pokémon and Bakugan collectibles.
The new toy, which features magnetized tops that kids collect and send into battle by launching them with motorized controllers, came out of Mega's attempt to find new magnet-based products to replace the recall-tainted Magnetix line. "The heritage of Mega is to take a good play pattern and merge it with construction," says Vic Bertrand, the company's chief innovation officer. "And spinning tops have been around for thousands of year." Putting new twists on established games-be they building blocks, dolls or tops-has long been the toy industry's main path of innovation. "The [spinning-top]play pattern is in people's DNA," says Harold Chizick, Mega's vice-president of marketing. "But there's been no innovation. Fifty years ago, rip cords were introduced-nothing since."
As with any new product at Mega, Battle Strikers had to pass a year-long, four-"gate" process before the company would commit to releasing the toy. After market trend and technology research and preliminary sketches in the spring of 2008, the company moved to "works-like-looks-like" prototypes which Mega set loose among kid testers. With Battle Strikers, Mega tapped kids' ideas for the Striker "characters"-an essential factor in fostering collectibility. By the summer, Mega was ready to show Battle Strikers to store buyers to get their feedback on price points and merchandising concepts.
The final gate involves fine-tuning the engineering and manufacturing logistics. A lot can still change at this point. For many months, the Battle Striker launcher was a strap-on, palm-held device. At the second-to-last prototype, a light bulb went on: It should be more like a joystick! "It's so much more iconic for a kid," says Bertrand. "Everyone recognizes that joysticks make things happen." There was also a safety concern: During testing, Bertrand noticed that kids were looking down under the launcher to check if the tops were spinning underneath. At 7,500 RPM, Bertrand observed, "If that thing comes off, it's going to hurt someone."
For Mega, however, the real breakthrough is on the marketing front. Chizick, who spent a decade at Spin Master Ltd. and was involved in that company's launch of the hugely popular Bakugan collectibles, is in charge of turning Battle Strikers into a similar playground must-have. Since January of this year, Mega has been seeding news about Battle Strikers on Facebook, YouTube and various websites and blogs maintained by battling-top enthusiasts, who play with tops made by various manufacturers and the players themselves. Early this year, Mega held the first Battle Strikers tournaments in Hong Kong and U.K., which will tour across North America this summer. Five Battle Striker teams will stop at more than 200 events, from theme parks and state fairs and shopping centres and sporting venues, engaging kids in battles. "We want to be shaking their hands wherever they are," says Chizick.
The summer is key to the toy's success, because collectibles follow the school calendar. "By the time September is over, it must be the currency of the schoolyard," says Chizick. "You want the cool kids to bring it to school after Labour Day and for other kids to say, 'Can I try it?' and then go, "Mom, I've got to have it! Everyone's got it!' "
"You know when you've achieved cool, and when you do get cool, you're there," says Bertrand, who, as one of the two brothers running the family company, knows how badly it needs a hit. He adds confidently, "We've built our portfolio on doubles and triples and the occasional single, but I think this one has the potential to round third and make it to home plate."