Universal Pictures back in the game with 'Despicable Me 2' toys

Universal Pictures is getting back into the toy business — led by a swarm of small, yellow creatures with a penchant for mischief.

The Hollywood studio plans to unveil an array of new toys and games for its upcoming 3-D computer-animated sequel "Despicable Me 2" at this weekend's Toy Fair trade show in New York, signaling a willingness to reenter the competitive consumer products market with some of its bigger movie franchises.

Much of the product line, to be launched ahead of "Despicable Me 2's" theatrical release July 3, focuses on the signature pill-shaped, jabbering creatures called minions that were featured prominently in the original 2010 film.

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Universal will be playing in a fiercely competitive world, one in which some of its rivals — especially Walt Disney Co. — have strong footholds.

"There are lots of companies that are going after a relatively stagnant share of shelf space," said Marty Brochstein, senior vice president of industry relations and information for the Licensing Industry Merchandisers' Assn.

"It's a very logical move, but it's a battle," he said. "The real challenge here is to maintain share of consumers' minds for more than 10 minutes when there is a new big movie every week."

Universal, whose parent, NBCUniversal, is owned by cable giant Comcast Corp., rolled out only a very limited supply of merchandise for the original "Despicable Me" movie, largely because retailers are reluctant to take a gamble on untested brands.

That film, which cost $69 million to make, turned out to be a surprise hit, grossing $544 million worldwide and $230 million more in home entertainment sales. Its windfall validated the studio's partnership with Chris Meledandri's Illumination Entertainment, the Santa Monica producer of the "Despicable Me" films and main supplier of family films to Universal.

The last time Universal mounted a significant products campaign was in 2005, when it partnered with toy makers on the studio's "King Kong" remake.

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Universal Chairman Adam Fogelson said the studio has remained on the sidelines for a simple reason: "We haven't had the content to justify doing it since then."

He said that in addition to "Despicable Me 2," other forthcoming films — including its May 24 release "Fast and Furious 6" and a "Jurassic Park" sequel slated for June 13, 2014 — will get product pushes of varying size and scope. The car-centric "Fast and Furious" sequel will include a Hot Wheels set from Mattel Inc.

"We now have the properties that demand aggressive, serious attention to satisfy consumer interest and we are ready, willing and able to do that," Fogelson said.

Though Universal doesn't expect to go toe-to-toe with products juggernaut Disney, it could carve out a niche.

"Every studio has its own DNA," said Stephanie Sperber, president of Universal Partnerships and Licensing.

"Disney has in its DNA an approach to characters that just has made it this consumer product goods powerhouse," Sperber said. "Our approach is much more about letting the content evolve and answering the consumer demand based on what that content is."

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For "Despicable Me 2," Universal has partnered with a handful of companies, including Thinkway Toys, which is developing action figures, plush toys and vehicles that will be on display Sunday through Wednesday at Toy Fair in New York and on store shelves in May. Thinkway, known for its sound-activated toy technology, has manufactured products for such films as "Toy Story" and "Wreck-It Ralph."

Digital game developer Gameloft, the Paris company that worked on such pictures as "Ice Age" and "The Dark Knight Rises," is creating a "Despicable Me" game slated to be released in June that will be available on smartphones and tablets running Apple and Google software. The free game, which will offer add-on features available for purchase, will center on the minions and feature villains not seen in the movies, Sperber said.

Michael Pachter, a Wedbush Securities research analyst who covers digital entertainment, said that the mobile game, although important to Universal's plan, probably would not be a significant revenue generator.

"I think that because they have product behind it, they care less about doing $10 million in mobile game revenue, but more about whether it gets downloaded 5 million times — because that's maybe 5 million people that will see your movie," he said.

Universal also is working with Hasbro to make versions of classic board games — including Monopoly and Operation — that will feature the minions.

The studio declined to divulge its financial arrangements with Thinkway, Gameloft and Hasbro.

Universal anticipates retail sales of all "Despicable Me" products in the range of $200 million to $250 million worldwide over three years. Some experts believe that's too optimistic.

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Ira Mayer, publisher of the trade publication "Licensing Letter," said Universal's sales projection "is pretty strong for essentially a first time out," though he added that the product push would be aided by the brand's recognition overseas.

The first film, which centered on a villain named Gru and his efforts to steal the Earth's moon with the help of his minions, performed well overseas, grossing $292.5 million.

In the aftermath of the movie's success, Universal decided to extend the brand by opening a "Despicable Me" ride at its Orlando, Fla., theme park last summer and even replacing the statue of Woody Woodpecker at its front gate in Universal City with two minions.

Executives at Universal, which finances and distributes Illumination's family movies, see the opportunity to exploit new intellectual properties from Meledandri's team, among them a planned minions movie spinoff scheduled to hit theaters Dec. 19, 2014.

"Some of them will lend themselves to toys and consumer products and others may not," Meledandri said. "The ones that we believe really work we will go after with conviction."

daniel.miller@latimes.com | @DanielNMiller


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