The world’s top 25 most valuable toy brands could lose up to US$3 billion worth of brand value as a result of the COVID-19 pandemic. Brand Finance’s analysis shows that the toys sector is a heavily impacted industry globally and could face a potential 20% loss in brand value.
Looking beyond the toys sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.
Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. The likely impact on brand value was estimated for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss.
While the toys industry is predicted to suffer a heavy impact to its brand value, Lego’s strong marketing strategy and customer loyalty may allow COVID-19 to be an opportunity for the brand to reach new customers who are looking for ways to stay busy at home. However, marketing and brand awareness campaigns will only take the brand so far, as it is most likely to be faced by manufacturing and distribution issues heavily impacting both the toys and retail sectors.
Richard Haigh, Managing Director, Brand Finance
Lego remains the world’s most valuable toy brand by a long way, despite its brand value dropping marginally by 3% to US$6.6 billion. Loved by generations of children around the world, the iconic toy brand has managed to remain relevant in a sector that has been under never-ending threat by the increased digitalisation of children’s games and accessibility of animated television online since the turn of the century. For decades, Lego has defended its brand value by positioning itself at the forefront of current events, from tailoring its advertising strategy after being criticised for reinforcing gender stereotypes, to – most recently – releasing an animated COVID-19 PSA featuring a Lego Batman figure.
Nerf is the fastest growing toy brand this year, following an impressive 43% brand value growth to US$587 million. Despite the Hasbro-owned blasters brand citing significantly increased competition within the space from major retailers, which are undercutting their price, Nerf has made strong progress with its new product lines including Nerf Fortnite and Nerf Ultra. New product launches, paired with greater innovation across the brand, are supporting Nerf in rising to the challenge of this increased competition.
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, My Little Pony is the world’s strongest toy brand with a Brand Strength Index (BSI) score of 89.8 out of 100 and a corresponding elite AAA+ brand strength rating.
As well as overtaking long standing leader Lego to become the sector’s strongest brand, My Little Pony has celebrated an impressive 20% brand value increase to US$302 million. The brand’s cartoon series hit the headlines last year as it featured the show’s first same-sex couple, with the episode airing on US television in time for Pride Week.
Following delays in the production of the 2021 My Little Pony feature film, due to Coronavirus, animation work has restarted on the movie, which is being created under Hasbro’s global entertainment studio, eOne. The 2017 My Little Pony: The Movie grossed over US$61 billion in the box office globally.