Galoob

Now part of Hasbro, for 40 years Galoob manufactured toys, most notably Micro Machines, Sky Dancer, and Game Genie. Lewis and Barbara (Frankel) Galoob founded Lewis Galoob Toys in 1957 as a distributor of stationery and toys. The company's first success was the Jolly Chimp, a battery-powered toy monkey that banged cymbals and nodded its head. During the 1960s and 1970s, Jolly Chimp photo albums, calendars, and stationery kept the company income stream steady if not spectacular. In 1970 Lewis Galoob became too sick to continue. His sons David and Robert took over and made the company into a $1 million business by 1976.

In 1976 the company bought a low-cost line of battery-operated radio-controlled cars and trucks that served as the basis for the company's growth for 20 years. By 1978 the vehicles produced sales of almost $5 million, but Galoob lacked a year-in-year-out surefire seller to absorb the boom and bust cycle of the fad-driven toy business.

In the 1970s product licensing became important to toy producers, and Galoob licensed Smurfs, which remained Galoob's major licensing venture until the licensing of television character Mr. T led to Galoob scoring sales of $28 million by 1983. Although Mr. T's popularity collapsed in 1984, other lines and intensive advertising almost doubled sales. In 1985 the company's earnings reached $100 million, thanks to the Animal, an off-road machine with claws to help it climb, and the first girl-oriented transformers, Sweet Secrets.

Galoob failures included Strobe-Dice, an electronic crap game. Baby Talk, Galoob's electronic talking doll, ran into the 1987 glutted market for electronic toys. Mr. Game Show, a $125 board game featuring a sarcastic voice, was another failure.

The slump in electronic toys and a shift of production to the People's Republic of China generated a net 1987 loss of almost $25 million with a 40 percent reduction in sales. That year Galoob found its surefire seller—Micro Machines—tiny toy cars. In 1988 Galoob's $140 million in sales included $60 million in Micro Machines. In 1989 the toys accounted for $135 million of Galoob's $228 million in revenues.

In 1990 the market went bust. Even Micro Machine sales slumped, as did sales of Bouncin' Babies, Galoob's 1989 hot-selling doll. The Federal Trade Commission then found Galoob guilty of deceptive advertising.

In the 1990s Galoob cut 17 percent of their workforce and ousted David Galoob, ending Galoob as a family company. Under Mark Goldman, the company committed to Micro Machines as its key brand. With five playsets and 155 machines in 40 collections, including Star Wars and Power Rangers, Micro Machine sales recovered from $43 million in 1991 to $113 million in 1994. In the 1990s [Page 250]Galoob added Starship Troopers and Johnny Quest to its Star Wars and Star Trek licenses. Later Galoob would license Babylon 5, Aliens, Predator, and others.

Galoob's 1992 Game Genie gave Nintendo game players extra lives, speed, weapons, and other features not in the games themselves. Nintendo sued, but the court ruled that users had the right to modify copyrighted intellectual properties for their own use. Game Genie earned $65 million in 1992, but the video game market moved past it, and 1994 earnings were only $4 million.

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