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Action figures are toys made to resemble characters, usually drawn from media such as comic books, TV shows, or movies. Sometimes, action figures are original characters that become popular enough that their creators can reverse this order, and base movies or other types of fiction on their original figures.
Action figures are practically de rigeur as a marketing tool for today's movies, cartoons, TV shows, and comics, with appeal as collector's items as well as playthings.
Much like a few other industries, Star Wars was the change agent in elevating action figures from not even worthy of consideration to something intregal to the marketing, PR and advertising plan.
Until Star Wars, action figures were randomly created and distributed. In fact, a small company called Mego at one time held the rights to all the major comic book super heroes (DC & Marvel) along with Star Trek, Battlestar Galactica and most TV shows - something hard to believe these days. But until the last of the baby boomer generation, boys basically put away toys (of any kind) away at around 9 or 10 and moved onto sports cards or sports itself but George Lucas was smart enough to see the changes in the baby boomers - that growing older was no reason to stop being a kid ... and in some ways better since if you were employed, you really could afford all the toys you wanted.
The trivia with Star Wars is that with the film going over budget, he was willing to trade his salary for back end profits and anchillary rights such as action figures ... which 20th Century Fox was more than happy to trade on this small scifi "kid's" film ...
Of course, the actuality was that the enoromous popularity of the Star wars figures began late in the film's run as no one outside of George Lucas anticipated it would be not only a massive hit but a pop cultural touchstone. The famous story is that for the holidays of 1977, kids got an empty box and a certificate to mail in, this was an idea of famous toy and TV innovator Bernard Loomis.
But by 1978, the action figure market was starting a run that only now is slowing as we enter a new generational phase. Until Star Wars, most action figure were considered toys to be played with and quickly forgotten but Star Wars' immense influence was longer lastly than most films and so it was with its action figures - not merely seen as disposable but as a collection - coinciding with a time of baby boomer's attitude towards what was 'acceptable," and nostalgia for their youth - along with inflation, it was a time that older baseball cards grew enormously in value - so it was with all the toys of their youth including original GI Joe's and Barbies. And so, arriving at the exact right time was a film with hundreds of characters that was instantly nostalgic (boys rescues girl) and yet, instantly futuristic - the best of all worlds to begin a collection ... and of course, George Lucas and the small company that won the licensing rights, Kenner - were more than happy to oblige.
The Star Wars figures also popularized the smaller less than 4" size action figures.
From that point and to around 2005, it was almost un-heard of for an action movie and always a sci-fi movie to have merchandiscing and action figures in place as part of the marketing & PR plan. Since action figures tend to need months to sculpt and make molds, and months to manufacture and ship (almost always from Asia) - this was almost a year long process and contributed to Hollywood's obsession with tentpole mega-blockbusters.
One of the vast improvements along the way from 1978 to 2005 was the improvement in design (from crude molds to laser facial & body scans) so figures looked more and more real. Along with the improvements in plastic molds were the ability to create elaborate accessories for the figure to interact with or use (swords, lightsabers, etc ) and of course, as the cost of technology dropped, figures could have talking features or interact with other figures unimaginable years earlier.
One of the pioneers in moving the industry forward to more elaborate and lifelike sculpting was Todd McFarlane's McFarlane's Studio.
And action figures have moved way beyond kid's toys. There are elaborate figures costing hundreds to thousands of dollars but most still sell in the $7 to $15 USD range.
However, by the industry has been slowing down since the early 2000's - mostly affected by a changing generation that valued more interactive fun such as video games but also of course, the internet, IM, SMS, etc have also contributed to kids moving onto other interests. Until the 2000's, if a film was successful, the action figure was almost certainly to be successful (genre films like scifi or animation particularly) but that is no longer true. So, companies are scaling back at several fronts - in addition, the consolidation of the retail industry and of course, the higher profits and easier sell of video games has also contributed ... if Wal Mart decides not to carry the line or the full line, that is often enough to kill a potential line.
So, while the action figure will continue to appeal to adult collectors, in the year 2006, the kids market has shrunk considerable as they are moving onto other entertainment choices. So many companies have moved upscale and to more adult themes - it remains to be seen if this is a viable market or if the mass market of kids 7-13 will return ...
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