The coronavirus has created a new toy industry dynamic: Todd McFarlane

While oil’s severe drop will impact companies in different ways, it has the potential to be good news for the likes of Hasbro (HAS), Mattel (MAT) & Funko (FNKO). “Plastic is a byproduct of petroleum. So if petroleum goes down, then there should be a pass on the amount costing a toymaker,” toy creator and comic book artist Todd McFarlane told Yahoo Finance.  

Oil (CL=F) futures started the week by falling below zero for the first time in history, and McFarlane took notice. “I see what’s happening to the barrel of crude right now, and eventually it’s going to be refined into petroleum, so when are those savings going to be passed on to me so I can pass it on to my consumer, who’s going to be suffering as much as anybody else?”

Holiday outlook

Big box retailers like Walmart (WMT) and Target (TGT) may play it safe this upcoming holiday season, even in a post COVID-19 world. Roughy 70% of its aisles could consist of Marvel, Star Wars (DIS), DC (T) and Transformers, he said. While there’s uncertainty about the exact health of the toy sector, there’s one reason to think that it could see a bounce back in December.

“Most parents do not begrudge their child a toy,” McFarlane said. “You may not go to Disneyland, you may not go on that big trip, they may not even buy a new shirt for themselves … [But] they rarely will say, ‘We’re going to stiff the kids’ at the same time. So the toy industry usually weathers downturns a little bit better than a lot of other industries.”

Kickstarter = Retail alternative

With most Americans staying home to help flatten the curve of the virus, McFarlane is bypassing big-box retailers and rolling out a Spawn Action figure on Kickstarter. He told Yahoo Finance, “I was just basically looking for another outlet where I could collect data to see whether this is a possible delivery mechanism, especially coming into the world that we’re in right now with the virus.”

The move is paying off exponentially. After meeting its goal of $100,000 in under 20 minutes — it’s now closing in on $2 million. 

The options Kickstarter provides has the potential to change the playing field for entrepreneurs, McFarlane said. “This is a sort of a great equalizer for people who have an idea — whether it’s somebody like me who’s been in the business for a while or somebody sitting at home, they can do the one idea and not have to worry about the delivery method mechanism because the internet now allows you to go straight to the consumer.”

Nick Monte is a producer at Yahoo Finance. Follow him on Twitter @MontesMayhem

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