Gamesmakers leap nimbly into electronics era
In the glue-and-cardboard days of making games -- not so long ago -- two purebred Massachusetts firms, Milton Bradley in Springfield and Parker Brothers in Salem, were the grand old masters of the industry.
Now, as the dust settles behind the stampede into electronic games, the two gamemakers emerge, not unscathed, but still at the front of what is now a full-blown herd.
"To my delight," says Randy Barton, president of Parker Brothers, "our principal competitors . . . are people that have always been our principal competitors: Milton Bradley, Mattel, Coleco."
The lesson seems to be that the toy business is still the toy business, and not the electronics industry. A silicon memory does not necessarily make a successful game.
The gamemaking world badly overshot the electronics market this Christmas season, leaving unsold games blinking and beeping on store shelves and sitting in distributors' warehouses. There were too many of them -- twice as many kinds as in 1979 -- and they were overpriced for the demand.
So the theme of the American Toy Fair in New York in February -- the event that launches the business year for toymakers -- was back to basics. This means the shoppers are more likely to see toys on the shelves and on TV that they've seen before over the years.
But electronics has left its mark on toymakers. And despite this year's slump, their tone is optimistic.
The electronics wave in games was felt on Wall Street. Milton Bradley, founded in 1860, found its sales growing over 30 percent from 1977 to 1978 and nearly 40 percent from 1979 to 1980. Parker Brothers, founded in 1883 and now a subsidiary of General Mills, followed a similar growth curve.
"I never thought I'd be visiting a place called Texas Instruments," says Randy Barton, Parker Brothers president and maternal grandson of the company's founder, George S. Parker. Parker Brothers is now a major customer of Texas Instruments for semiconductor circuits.
It was in the early 1970s, Mr. Barton says, that investors began filing into his office with ideas for electronic games.
When he first saw the "TVs and wires and tubes" of a "pong-like" game set up on his desk, he says, "It scared the wits out of me."
In 1972 Parker Brothers was a management team whose technical capabilities, as Mr. Barton puts it, were limited to paper, cardboard, and glue -- with some printing capacity.
Now some 40 percent of Parker Brothers' business -- including such staples as Monopoly, Boggle, and Nerf balls -- is in electronics.
"Merlin," the country's second best-selling electronic game behind Milton Bradley's "Simon," may become a staple itself after its third year, Mr. Barton thinks. It was one of the few electronic games that cleared the retail shelves this year without leaving a residue of unsold units.
More is changed, however, than the games on the toy store shelves. Manufacturing them is a different business.
Electronic games cost more to make than traditional paper-and-glue games. Hence the risk is greater in not selling them. Milton Bradley, for example, logged in record sales for 1980, a 17 percent incrase over 1979. Yet net income dropped slightly because the company produced too many games.
But growth potential is also greater. While more workers than usual were laid off this year during Milton Bradley's post-Christmas shutdown, union officials waved off any concern.
More workers have been hired in the past couple of years because of electronics-spurred growth, says Ralph LeMay, business agent for the Retail, Wholesale, and Department Store Union, so more were laid off during the customary shutdown.
The work force manufacturing electronic games is made up of the same union workers that have always made games. But research and development now involves hiring more technically oriented designers -- six or seven times more, Mr. Barton estimates -- than are needed for board games.
So far, it appears easier for the mainstays of the toy industry like Parker Brothers and Milton Bradley to adapt to electronics than for electronics manufacturers, many from the Far East, to break into the toy business.
"They don't know what makes a good game," Mr. Barton sums up.