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Startup toyco triumphs in U.S. market

These days starting up a new toyco almost flies in the face of reason. The U.S. market isn't growing and consolidation continues apace. Witness Mattel's August buyout of Radica for US$230 million. But industry veteran Roger Shiffman - co-founder of Tiger Electronics who sold the venture to Hasbro with his partner in 1998 - took a gamble. His Bannockburn, Illinois-based Zizzle launched with just one toy in 2005 and has since managed to bring 40 products to market. An additional 60 toys across six categories are planned for 2007, indicating his wager might just pay off.
September 1, 2006

These days starting up a new toyco almost flies in the face of reason. The U.S. market isn’t growing and consolidation continues apace. Witness Mattel’s August buyout of Radica for US$230 million. But industry veteran Roger Shiffman – co-founder of Tiger Electronics who sold the venture to Hasbro with his partner in 1998 – took a gamble. His Bannockburn, Illinois-based Zizzle launched with just one toy in 2005 and has since managed to bring 40 products to market. An additional 60 toys across six categories are planned for 2007, indicating his wager might just pay off.

Zizzle broke into the toy biz with the iZ, iPod-compatible musical toy, which sold hundreds of thousands of units worldwide, and then moved on to nabbing the master toy license for this year’s top grossing movie, Disney blockbuster Pirates of the Caribbean: Dead Man’s Chest. (At press time it had raked in more than US$400 million at the U.S. box office.)

‘While we were negotiating the license for Pirates, the paperwork for Zizzle hadn’t been formalized,’ Marc Rosenberg, Zizzle’s chief marketing officer, says. The first Pirates movie brought in over US$300 million at the U.S. box office, but Disney missed the boat on merch opps. After meeting with Disney execs at Toy Fair 2005, the company landed the license for the franchise. And the toys seem to be on track to mirror the film’s stellar performance. Rosenberg says Zizzle’s Pirates product, including a Black Pearl playset, is sitting in the top five for boys action category sales with 20 products on shelves right now – that number is expected to double by the time the third movie opens next Memorial Day in May ’07.

Eager to prove that it’s more than a one-trick pony, Zizzle is now looking to make a splash in the US$1.4-billion educational toy market. The company has picked up the Hooked on Phonics license and will produce a series of ELAs. The new developmental toys are expected to hit shelves at major retailers in fall 2007.

Hi-tech toys also remain on the menu. A full line of original gizmos will be unveiled at Toy Fair and in the meantime the company’s offering up an updated electronic version of an arcade classic in Q4, the pinball machine. At US$300 a pop the machines sporting Disney and Marvel characters will launch at specialty channels to test consumer demand. To keep up the momentum Rosenberg says Zizzle’s on the lookout for more pinball-appropriate licenses and is opening its doors to inventors of all stripes.

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