On paper, the Rubik’s Cube doesn’t sound like a whole lot of fun: It was first patented as a “spatial logic toy," and the puzzle was so frustrating that its own inventor was unable to solve it for more than a month. But nearly 40 years after the Cube’s global launch, Toronto-based Spin Master Corp. is paying roughly US$50-million to acquire Britain-based Rubik’s Brand Ltd., which owns the rights to the toy phenomenon.
Spin Master, which already owns toy and entertainment brands including Paw Patrol, Gund, Bakugan and Etch A Sketch, announced its acquisition of Rubik’s Brand on Tuesday.
“It’s kind of a pinch-me moment, to be able to buy Rubik’s Cube,” Anton Rabie, Spin Master’s chairman, co-founder and co-chief executive officer, said in an interview. “We love the global nature of it. We’re really expanding our games business globally, and this gives us a lot of leverage.”
While interest in the cube has gone up and down over the decades, it has been growing in recent years. Rubik’s Brand now sells between five million and 10 million units per year across its range of toys – which includes the original cube as well as variations (such as a pyramid, Rubik’s-theme board games, a simplified two-by-two-square version, and more diabolical five-by-fives). Since its inception, Rubik’s has sold more than 450 million units around the world.
The original cube was invented behind the Iron Curtain in 1974, when Hungarian architecture professor Erno Rubik was looking for a way to teach his students about three-dimensional movement. He called it the “Buvos Kocka” or Magic Cube. The toy did not launch globally until 1980, after toy marketer Tom Kremer saw it at the Nuremberg International Toy Fair, signed a worldwide distribution licence and convinced the American toy distributor Ideal Toy Co. to release it more widely.
Ideal’s marketing strategy was to play up how difficult the puzzle was to solve. (“I had trouble with it,” the Spin Master chairman admits.) Millions of customers took the bait, and the cube became a full-blown fad. It also spawned plenty of fakes.
“We have no concern about the knockoffs,” Mr. Rabie said. “The brand name is so strong, people want the brand even if you put it next to a counterfeit on the shelf.”
Privately held Rubik’s Brand contacted Spin Master in January as it began looking for a buyer. Since then, puzzle sales have surged as lockdowns during the novel coronavirus pandemic kept people at home and looking for entertainment.
Games, puzzles, activities and plush toys accounted for 27 per cent of Spin Master’s gross product sales last year, and have risen to 30 per cent because of increased demand during the pandemic.
Puzzle sales rose 109 per cent in Canada from March to September compared to the same period last year, according to research firm the NPD Group Inc. However, NPD says sales in the “brain teaser” category, which includes games such as Rubik’s Cube, have declined so far this year by 17 per cent. According to Rubik’s Brand, however, the worldwide demand for its products has surged during the pandemic.
“We were already on a growth trajectory. But we have seen quite a significant impact over the past few months," said Rubik’s Brand CEO Christoph Bettin. While some see the brand as a throwback – “I remember that” and “Is that still around?” are common reactions Mr. Bettin hears when people find out where he works – it continues to have appeal, he said. This summer, Netflix launched a short documentary, The Speed Cubers, about the world of competitive Rubik’s Cube solvers.
Mr. Bettin was brought in to lead the company in early 2019, after European private-equity firm Bancroft Investment bought a minority stake. The Kremer family and Mr. Rubik are shareholders as well, and will continue to consult with Spin Master on the business.
The Canadian company has continued to work with other founders of brands it has acquired, including Gund and Hedbanz, Mr. Rabie said. The goal for Rubik’s Brand is to continue to grow the business, including developing more digital game options. The company has only “dipped its toe” into digital gaming thus far, Mr. Bettin said.
After the deal closes, the Rubik’s Brand operations will move from their current headquarters in London to the Long Island City, N.Y., office where Spin Master’s games team is based. The transaction is expected to close in early January.
“We believe 50 years from now, it will be as popular as it is today,” Mr. Rabie said.
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