Original subtitles

(gentle music)

- Just be sure that things are squared away-

- [narrator] it's the biggest toy industry event

Of the year.

- Excuse me, may I have a moment?

- It's late, the toy fair is over.

- [narrator] and everyone wants to pitch their new idea

To ray wagner, the president of mattel.

- This was the company that gave the world barbie

And the entire barbie universe.

- I'm from 20th century fox.

I'm looking for a merchandising partner

For a new film. - Okay.

- But mattel is not the toy powerhouse that they once were

And they badly need a hit to get back on top.

- From the director who made "american graffiti."

We want mattel to make the toys, action figures.

- Into his lap falls the most valuable,

Most watched entertainment property

In the history of the world.

(reverent music)

- [narrator] in just three months,

"star wars" will become a pop culture phenomenon

That transforms hollywood overnight.

Its line of toys will make action figures

Into a $2 billion dollar a year behemoth

And single-handedly paved the way

For some of the most iconic toys in history.

(ray chuckling)

- Movies do not sell toys, my friend.

But good luck.

- And he passes!

What the-

(reverent music continuing)

- [narrator] ray wagner's decision

Leaves the deal of a lifetime up for grabs

And opens the door to an upstart-

- That big, measure it.

- [narrator] which ignites an action figures arms race-

- But we have to do something,

Otherwise we're gonna lose this franchise.

- [narrator] between the biggest toy titans-

- How do we take on "star wars" with this?

- [narrator] for mastery of the toy universe.

(reverent music continuing)

(arcade games chirping)

In 1977, a new trend is driving growth in the toy industry.

The introduction of the atari vcs game system

Sparks a toy revolution.

- Everyone wanted an electronic game,

Something that had an on-and-off switch,

Something that beeped.

Action figures are less popular at this time.

- [narrator] the american boy's hero,

The giant of the toy industry.

- The term "action figure" was actually coined by hasbro

In 1964 during their gi joe line of action figures.

- [child] boy oh boy, it's a hasbro toy!

- But in the aftermath of the vietnam war,

You didn't want your kid with soldiers all around the house.

- [protestors] hell no, we won't go!

Hell no, we won't go!

- As gi joe went on the wane,

The action figure market actually began to decline.

- [narrator] but the president of a small toy company

In the midwest thinks he may have the secret

To making action figures profitable.

(pensive music) (birds chirping)

- Kenner was a fledgling company founded in cincinnati.

We were really a middle-of-the-road company,

Not in the stratosphere like a mattel or hasbro.

- Bernie loomis is one of these characters

That threads through this entire history of action figures,

Going all the way back to mattel and barbie.

- Giant of the toy industry,

Large personality, large figure,

But his biggest contribution

Is introducing the concept of a television series.

- In 1969, bernie loomis becomes the first person

To create a tv show for the specific purpose

Of selling a toy: Hot wheels.

- It was hot wheels, hot wheels.

The branding was everywhere,

Especially at the top of the show.

And when you get into it, it's all about the cars.

- Bernie loomis understood that a toy wasn't enough.

Kids wanted a story, even if the toy was a hot wheels car.

- And within a very short period of time,

This catapults hot wheels past its chief rival, matchbox.

- [narrator] but after just two season on the air,

The fcc cancels "hot wheels,"

Calling it a 30-minute commercial,

And officially outlaws this marketing strategy.

In 1970, bernie loomis, now president of kenner,

Is desperate for a loophole.

- He decides, "well, I can't actually create a tv show

"around my toy, but I can take an existing television show

"and then create toys around it."

- [narrator] colonel steve austin,

The six million dollar man.

(light upbeat music)

- We had the opportunity to license a product line

From an incredibly popular television show

Called "the six million dollar man."

- [narrator] kenner's action figure

Might look like hasbro's 12-year-old gi joe.

But thanks to the hit tv show,

The six million dollar man

Comes with a built-in weekly fanbase.

- [child] bionic eye, a-okay.

Six million dollar man-

- Six million dollar man absolutely

Put kenner on the map.

- [narrator] but loomis knows it won't be long

Before they'll need a bigger hit,

And he tasks his design team to find new ideas.

- You're only as good as your last invention.

You're only as good as your last toy.

And selling toys is not easy

Because what you're doing is you are trying to attract

The whims of a seven-year-old.

(person knocking) - huh?

- Mr. Loomis, you have to read this.

- Dave okada was a really high-energy leader,

Always getting his hands dirty,

Pushing for new things, new ideas.

He was given a pitch by 20th century fox and lucas

At toy fair in new york.

- It's a movie.

- In the toy industry,

People absolutely shunned doing anything with movies.

Why?

Because the movie was here today and gone tomorrow.

- The "james bond" franchise

Had a massive toy line associated with it:

Vehicles, action figures.

The james bond movie line of toys was a complete failure.

- The design team loves it.

It's got aliens, robots.

There's a toy on every page.

(bernie sighs)

(dramatic music)

(traffic whirring)

- "star wars" was turned down by mattel,

Hasbro, ideal, even mego.

- People already felt that movie toys

Were not going to sell.

And let's be honest, sci-fi was kinda niche.

- Nasa was in the past, the moonshots were in the past.

Science-fiction was related to the end days.

It was like a dystopian future of america.

You had "the omega man" and "soylent green," all that stuff.

- "star wars" was different.

It was not just optimistic,

It was good versus evil and good could win.

- And the "star wars" script was packed with toy ideas.

- Bernie loomis is known for coining the phrase toyetic.

- Toyetic means when you can see something

That maybe is not a toy

That you can envision becoming a toy.

It's toyetic.

(rising suspenseful music)

- He saw something in "star wars"

That excited him as a fan of toys.

- Bernie loomis is gonna do something

That has never been done before

And go all-in on toys for a movie, which is a huge risk

For the guy who's trying to grow this little company.

- [narrator] kenner enters an exclusive deal

With george lucas and 20th century fox

To create a "star wars" toy line

Only two months before the movie's premiere.

(reverent music)

- Guys...

Stop what you're doing.

I need you to take a look at this, okay?

- Initially, we got what we call the black book.

That was roughly 18-24 pages

Of black-and-white photographs from the live action

And we had a snapshot of an x-wing and a tie fighter,

And that's about all we had to go on

For the first month or so.

- They didn't know what these characters sounded like,

How they moved, but what they did notice was this:

That the vehicles were every bit as important

As the characters themselves.

- Dave okada and his creative team said,

"in order for us to make this work,

"all the figures have to fit in the vehicles."

- [narrator] but the standard size of action figures

At the time is 12 inches tall.

- The original gi joe that came out in 1964,

Carried through all the way to the late-'70s,

Was your classic 12-inch action figure.

12 inches was the height that barbie was.

That's where that 12 inches comes from.

- Let's bring that back and see what it looks like.

(subdued music)

- Kenner recognized that to build action figures

At the size of barbie would of made it incredibly hard

To produce vehicles and playsets for those action figures.

- It's impossible because the x-wing fighter

Would be the size of a coffee table.

- I...

Uh...

- It could barely fit in the door of the kid's room,

Let alone allow a child to play with it.

- Let me think about this...Um...

We have a problem.

- The team said, "we've gotta shrink the size of the figures

"so that they can fit inside the vehicles!"

So, dave okada says to loomis, "how big should it be?"

And loomis says-

- "that big, measure it."

- Dave pulls out a ruler.

- What have we got?

- Three and three-quarters of an inch.

- Three and three-quarters.

Okay.

- Well, then that's the size of luke skywalker.

The entire line was then based off of that size.

- The whole country's gonna want "star wars" for christmas.

We have nine months.

Let's go. (clapping)

- [narrator] with just weeks to go

Before the movie premieres,

Kenner begins work on their first action figure mock-ups

With a process called kit-bashing.

- We took fisher price adventure people.

But with some x-acto knife work and body putty,

These were carved into the original figures.

The fireman became darth vader

And our nurse became princess leia.

- [narrator] they show these crude prototypes to retailers,

But kenner can't land a buyer.

- There was no movie at the time, it was just ideas.

The names of the characters were so foreign.

Chewbacca, r2-d2, c-3po.

Who knows anything about this?!

- Kenner is pouring tons of money into this toy line

For this crazy sci-fi movie.

And for all they know,

This movie may get laughed out of the theaters.

- [narrator] on may 25th, 1977,

"star wars" is finally released

And takes the nation by storm.

(reverent music)

- The american public was primed for something new.

They wanted to be optimistic.

So, when "star wars" comes along, they are ready.

- [narrator] "star wars" grosses $1.5 million

In its opening weekend alone and will remain in theaters

For a record-smashing seven-month run.

- "have you seen "star wars"?"

That wasn't the right question.

The right question was,

"how many times have you seen "star wars"?"

And when you hear that kind of reply,

You know that you've got a winner.

(audience applauding)

- [narrator] but now, kenner has a new problem.

- The retailers would say, "instead of our order of x,

"we want triple-x and quadruple-x."

We weren't prepared for that.

On December 25th, no matter what else happens,

Santa comes down the chimney.

- The toy industry is built to sell products

Around christmastime.

About a quarter of what the industry gains

In terms of profit comes from this period.

- We miss christmas, we miss "star wars."

(employee sighing)

(dramatic music)

- In the toy business,

You never wanna miss a christmas season.

You're gonna leave money on the table.

You're gonna lose money.

- What's the best we can do?

- February...

Maybe.

- Kenner has a license, they've paid for it,

They know they have buyers there.

- And there is no product for christmas 1977.

- They've lost this window of opportunity.

This could be a death knell for the company.

(birds chirping) (pensive music)

- There's intense interest in all things "star wars."

It's the number-one movie in the country

And will be for a really, really long time.

So, the kenner company is in a position

Of having the licensing rights

To all of these action figures,

But they can't produce them by christmas.

- He says we can do the paper stuff,

So I'm thinking maybe puzzles or board games.

- Well, they already have those materials on hand.

It's cheap, it's quick, it's easy,

But not the kinds of toys that they wanted to make:

Articulated action figures.

- We've gotta do something, mr. Loomis.

Mr. Loomis.

- Then sell the boxes.

We'll sell 'em the box for christmas

And then mail out the figures later.

- Like an iou?

- We'll have to spin it somehow.

(pensive music)

- They had this idea to essentially issue

A gift certificate, an iou, for christmas of 1977.

- "fill in your name and address

"on both areas of the certificate card.

"tear off your proof of purchase coupon

"from the early bird certificate and keep it.

"mail the certificate."

- If you're patient, within six or so months,

You'll be able to get this entire slate of action figures.

- Assuming that kids are gonna be happy on christmas

To get an empty box under the tree

Is a huge gamble that kenner takes.

- One referred to it as a lump of coal

In your christmas stock.

In fact, laws changed as a result of that

To make sure you couldn't do that ever again.

- Bernie commented that that was the loneliest decision

He ever made in his life.

(traffic whirring) (pensive music)

- So, mattel sees the success of "star wars"

And they may have a little egg on their face

For not seeing it when they could have gotten it.

- Ray wagner, president of mattel at the time,

Passed on a literal once-in-a-lifetime opportunity.

- Movies do not sell toys, my friend.

But good luck.

- I mean, these two figures, bernie loomis and ray wagner,

They used to be co-workers at mattel.

Now, bernie's over at kenner

And he's got this new hot property,

And ray wagner is watching him

'cause he knows what bernie loomis is capable of.

- Now, the people at mattel are saying, "we've got nothing.

"we've gotta do something as big as "star wars."

- So, what do they do?

What everybody in the toy industry does,

Try to grab a piece of that business.

- They felt that they had to get their hands

And exploit a property

That could at least superficially

Compete with "star wars."

- And mattel found their golden child

In "battlestar galactica."

- [narrator] like "star wars,"

Universal's latest production promises special effects,

A cast of costumed characters,

And something "star wars" doesn't have.

- It was another space epic

That would come into people's televisions every week,

So people will be constantly reminded

About the characters and the storylines

When they went and bought the toys.

- [narrator] mattel snatches up the merchandising rights

For a whopping $14 million.

Meanwhile, the future of kenner

Hangs on bernie loomis's latest marketing ploy.

- The early bird certificate

Was not a huge success for kenner sales-wise.

- And this would have certainly meant doom for kenner toys.

- Kenner is saved by the fact that "star wars"

Is so incredibly popular,

Way beyond the normal lifespan of a movie.

So, when the product finally drops, it is an explosion.

- [narrator] finally, in the spring of 1978,

Kenner releases all 12 action figures,

Along with the x-wing fighter, the tie fighter,

And the landspeeder.

(reverent music)

- The "star wars" toys almost never made it to the shelves

Because the people wanted the toys

The minute they came out from the storerooms.

- [narrator] bringing in $200 million in sales

In the first year,

The "star wars" toy line doubles kenner's net worth.

- "star wars" doesn't just put kenner on the map,

It makes it the biggest point on the map.

(pensive music)

- So, mattel was playing catch-up with kenner.

They had to have the "battlestar"

License be successful.

It absolutely was imperative.

(pensive music continuing)

The cool thing about the mattel toys

Is that they were able to actually fire projectiles.

That was a first.

- This...

This may blow "star wars" out of the sky.

- Kenner is making too much money

And everything shifts to compete with "star wars."

- [narrator] in September of 1978,

"battlestar galactica" hits the airwaves

And is a runaway success.

- Battlestar galactica" actually had

A lot of carryover fans from "star wars".

That really helped propel mattel

Into the same category as kenner.

- [narrator] meanwhile, kenner's about to launch

Their biggest and most expensive toy

Well after "star wars" finishes its theatrical run.

- Then you make a massive toy

That requires incredible amounts of resources,

Incredible time to make, and putting it out

Two years after the movie has been released?

It's just kind of mind-boggling

That they even went through with it.

- The risk here is, of course,

That interest in this line, this product,

This storyline, has dissipated.

- Will people really still care about these characters?

- [narrator] but bernie loomis knows

That the millennium falcon is more than just a new toy.

It's a test for the future of "star wars."

Kenner is finally ready to launch what they hope will be

The flagship of their "star wars" toy line:

The millennium falcon.

- "star wars" toys had already defied expectations

In every way, shape, and form,

But the millennium falcon came out

Two years after the movie, in 1979.

- [narrator] and this toy is more than just a vehicle.

It's an entire playset.

- You can be luke in the gunner seat.

You can have han and chewy side-by-side.

Everything you saw in the movie you can do with this toy.

- And the millennium falcon flies off the shelves.

- [narrator] for kenner, it's a relief.

The company is already preparing toys

For a soon-to-be-announced "star wars" sequel.

Now, loomis just hopes that the next movie

Will be as popular as the first.

(pensive music) (traffic whirring)

As kenner continues riding the "star wars" wave,

Mattel's "battlestar galactica" line comes under fire.

- Right.

God.

- Here's the thing with "battlestar galactica"

And this rocket-firing missiles:

A rocket gets shot into the mouth of another child.

He chokes.

The backlash against "battlestar galactica"

And mattel was unprecedented.

- All right, get development up here right now.

(phone slamming)

- [narrator] soon after, due to high production costs

And declining ratings, abc cancels "battlestar galactica."

Overnight, mattel's merchandising license

And multimillion-dollar investment becomes worthless

And ray wagner is powerless to do anything about it.

- So, let's look at ray wagner's track record.

He's the guy who passed on "star wars,"

Only to throw a ton of money at "battlestar galactica,"

Which then gets canceled.

- [narrator] wagner pushes the entire company

For new toy ideas.

- And so, people were trying to come up with different lines

To pitch to the management, and roger was one of them.

- [narrator] up-and-coming designer roger sweet

Wants something out-of-the-box

And he finds it from a colleague.

- Mark taylor was sketching all the time

And he had the idea of a mythical figure.

- He was something of another world,

This giant mammoth of a man, fully proportioned,

With these great bulging muscles

And great big sword to slay a dragon.

- Roger saw the material in his cubicle

And asked mark, "can I use this artwork for my pitch?"

And mark said yes.

- [narrator] based on mark taylor's barbarian sketches,

Sweet works on the prototype.

He also adds two alternate versions

Of safe, well-proven options to help win over wagner.

- And they presented a barbarian figure, a space figure,

And an army figure as part of this initial presentation.

- Wagner already knows that kenner's got space locked up

With "star wars."

Hasbro's got the soldier with gi joe.

So, he green-lights the barbarian.

- He says, "we need to do this.

"we need to do this because there's nothing else like this."

And I think he's bold in that he sticks to his intuition

When it comes to this thing.

- [narrator] now, they must figure out

How to get their action figure to stand out.

- They wanted something that really stuck it to kenner

In terms of size and who was dominant.

- [narrator] designers break away

From the new industry standard

Of three-and-three-quarters inches

And make he-man nearly two inches taller.

- The "star wars" figures are cute and small,

But they don't have the heft and the feel

Of a five-and-a-half-inch toy.

(tense music)

- One of the reason the figures ended up being the size,

Marketing wanted some sort of mechanism or action feature.

(tense music)

- This new action was called the thunder punch.

(pensive music)

- It's good.

It's good, but it's just a figure.

- Just being big and buff with a sword isn't enough.

Kids are now demanding a backstory

With their action figures.

- How do we take on "star wars" with this?

(pensive music)

- [narrator] in the late-'70s,

Mattel's roger sweet is determined

To launch a new kind of action figure.

- Growing up, he felt sorta scrawny,

So he thought it was really important

To build himself as strong as possible

And he wanted to create an action figure

That spoke to a little boy's need of power.

- [narrator] but sweet needs more than just a character

To get his idea off the ground.

- What kenner does with "star wars"

Changes the playing field completely and forever

For toy manufacturers.

It's no longer just make toys for kids

And hope for the best.

Now there's a new strategy.

You gotta have narrative, you gotta have story,

You gotta have a deep, deep cast of characters.

- So, mattel has this buff barbarian dude

And they wanna connect it to some kinda property.

(pensive music)

- [narrator] "conan the barbarian,"

A long-running comic,

Is being made into a multimillion-dollar movie.

- It's all about a licensing deal.

Boom.

- New story, developed character, everything's there.

A marketing platform exists.

It's the perfect opportunity.

- So, clearly, ray wagner says, "aha, this is the ticket."

- So, they're gonna make "conan the barbarian"

The platform upon which they will sell this thing big-time.

- [narrator] while wagner makes a deal

For his first major movie tie-in,

Bernie loomis is hoping to strike box office gold again.

(phone ringing)

- Sequels often fail, but kenner's all-in on this.

It's gotta succeed.

And, man, does it ever.

(reverent music)

- [narrator] on may 21st, 1980,

"the empire strikes back" is released to an eager audience.

- It's the thing to do to go and see "star wars,"

So we're all here doing the thing to do.

- [narrator] it pulls in $5 million

At the box office in its first weekend alone,

Three times more than the original

Movie's opening weekend.

- The first "star wars," they were late to the game.

Now they are ready.

When "empire strikes back" hits big, so does kenner.

(reverent music)

- [narrator] the sequel introduces new

Characters like yoda

And new vehicles like the fearsome at-at walker.

- If you've seen the movie,

You know the at-at walkers were gigantic, like wow.

If you were a kid on christmas morning

And you tore that open,

You were probably in "star wars" heaven.

- You pressed the button

And the at-at had pulsating laser cannons.

It was just awesome as a toy.

(reverent music continuing)

- [narrator] while kenner enjoys record profits,

Mattel is finally ready to fire back

With their own big tent-pole movie.

(film reel spinning)

- So, mattel enters into this licensing agreement

With the makers of "conan the barbarian."

It's gonna be a huge feature and they see dollar signs.

They're not only gonna have the story of the character

But the whole franchise is gonna sell it to america.

It's the perfect combination.

- [narrator] wagner has promised stakeholders

$13 million in sales.

He's banking on the movie to bring mattel

Worldwide commercial success.

- [narrator] slave.

Barbarian.

Thief.

Conan.

- Now, I say this as someone who was an adolescent

When "conan the barbarian" came out.

There were swords, there were wizards, but there were boobs.

(uneasy music)

- We've got a serious problem.

- "conan the barbarian" is not a children's movie.

- There is loads of nudity.

There's incredibly graphic violence.

Doesn't work too well when it comes to christmas season.

- It's the last thing you wanna attach a children's toy to.

It was a total mess, a total disaster.

And they realized they recreated a monster.

(pensive music) (traffic whirring)

- [narrator] in 1981, mattel president ray wagner

Has just been burned on yet another bad licensing deal.

- So, let's review what poor ray wagner's gone through

At this point.

He's the guy who passed on "star wars" action figures.

- [ray] good luck.

- He's the guy who thought

That betting on "battlestar galactica" was a good idea.

And then he creates a line of barbarian action figures

That he attaches to an r-rated movie

With violence and nudity.

Damn, ray.

(pensive music continuing)

- So, mattel actually learn an incredibly lesson.

They can't be a slave to the networks.

Mattel says, "you know what?

"we're gonna be in control this time."

- Wagner knows the stakes are high.

The odds are against him.

Without the movie,

He's gotta try to market this single figure

And teach the public who this creature is.

- [narrator] starting with a name that commands attention.

- Roger sweet was looking for something

That was representative of the masculinity

And the physicality of his character.

- And then, (snapping) the name goes off in his head.

He-man. (laughing)

And it sounds silly to us now,

But it's super-easy to remember if you're five years old.

- [narrator] next, designers focus on he-man's archenemy.

- Well, that was mark taylor's concept

That to have a hero, you have to have a real bad guy,

A bad guy that was really a badass guy,

And that was skeletor.

- [narrator] they go on to develop

A supporting cast of characters

And name the entire line "masters of the universe."

And at the center of this universe

Is the crown jewel of the toy line.

- They wanted to have a playset

And the playset had to play a big role in the stories.

Castle grayskull was a vital part of the entire concept

Since the beginning.

- Before that, you had barbie and you had gi joe,

Really clean, all-american kinda toys,

And this was a little weird.

(pensive music)

- If we're building one playset,

Why would it be the bad guy's base?

- So, here's the thing with castle grayskull, okay?

You don't just make a toy.

You've gotta go through a design phase.

You have to go through sculpting.

There is millions of dollars that goes into tooling one toy.

So, if it doesn't work, you're losing a lot of money.

- [narrator] desperate to salvage their work,

Designers come up with a revolutionary concept.

- [employee] it's castle grayskull,

A mysterious ancient fortress for the both of them.

- It's actually not the bad guy's place.

Castle grayskull is the object of desire.

- The castle door was created with a little lock.

And to enter the castle, you need that key.

- This was he-man, and what was crazy was...

So, his sword was gray, skeletor's was purple,

And they were meant to snap together

To become this power sword

That could unlock all the mysteries of castle grayskull.

- It was a simple but very effective gimmick

That invited kids to a very specific play pattern.

(door thudding)

- I like it.

We're going with it.

Let's call that...

Let's call that the jawbridge.

- They call it finger food in the toy industry

That kids can do to activate different mechanisms

To add to the story.

So, it really was something that enhanced the play

In a very physical way.

(inspiring music)

- When "masters of the universe" came on the scene,

It really broke the mold

Of what action figures could look like.

The guys looked amazing.

He-man was just jacked.

Skeletor was just jacked.

- The first year, he-man made as much as barbie

And barbie was the cash cow.

Suddenly, mattel had this whole toy line

Which was uniquely theirs

And it stood apart from the "star wars" line.

- [narrator] wagner has proven that a toy line

Can be a success without a licensing deal.

- What are you guys trying to say, mattel?

Your action figure could beat up kenner's action figure?

Sure, clearly, yes, you win.

- [narrator] as he-man's on the rise,

A change in legislation leads to an unexpected opportunity.

- All right.

No, hey, look, he's a good congressman.

- [narrator] since 1971, federal regulations

Prevented toy companies from creating their own cartoon.

- [reporter] the massachusetts-based

Action for children's television has been instrumental

In pressing for more federal involvement in tv for kids.

- [narrator] but in 1983,

President reagan's fcc chairman removes the ban.

- It's a brand new ballgame,

But it's the old ballgame they used to play.

- [narrator] unlike a licensed toy,

Mattel owns he-man outright,

Giving wagner the perfect opening to steal a page

From former colleague bernie loomis's "hot wheels" playbook.

(birds chirping) (pensive music)

- As the marketplace was getting saturated

With new products and new boys toys,

Kenner felt a bit desperate

In their attempt to keep "star wars" alive.

They knew that the last film was coming out.

And once that had folded,

They didn't really know where they were gonna go from there.

- [narrator] the decision hinges solely on lucasfilm.

Until then, kenner is banking on the final installment

Of "star wars" to promote their latest collection

And keep the company afloat.

- And the movie was titled, "the revenge of the jedi."

A month or two before the release of that movie,

Lucas came back to kenner and said,

"we don't like that title."

What do you mean you don't like it?!

We had produced a million figures

To be launched on a certain date.

It's on the packaging, it's on the commercials,

It's on everything!

No choice whatsoever.

(dramatic music)

A million packages had to be destroyed.

(pensive music)

- [narrator] in March of 1983,

Two months before the release of the third installment

In the "star wars" trilogy,

George lucas changes the name of the film.

- "revenge of the jedi" was seen as a title

That really wasn't fitting with the philosophy

Of being a jedi knight.

Lucas decided, "no, no,

"it should be "return of the jedi" instead."

And the created the packaging nice and early

So they wouldn't be in a rush to get to retail with it,

But kenner kinda threw their hands up in the air.

They all suddenly had to sprint to the line again.

- [narrator] and just in time.

(reverent music)

On may 25th, 1983, "star wars" fans come in droves

To see "return of the jedi,"

Making it one of the year's highest-grossing films.

- "star wars" absolutely rocketed kenner to the top.

And from our estimates,

They were going from a $40-million company

And after "return of the jedi,"

They're operating at $400 million.

- [narrator] but mattel's he-man franchise

Is about to hit back.

In September 1983,

"masters of the universe" makes its debut on tv.

- All of a sudden, kids across america

Were holding up the swords and saying, "I have the power,"

And they were pretending as though they were he-man.

- [narrator] it's the first toy line

To have its own cartoon series

Since bernie loomis's "hot wheels"

Aired 14 years earlier in 1969.

- It showed not only this amazing world

With these different amazing characters

But also too at the end,

It all had a message for you to learn from.

The he-man is a role model.

- The cartoon was just on tv every day.

All you had to do was turn on your television

And now you were in this world of mattel's toys. (laughing)

- [narrator] toy sales double in 1983,

Initially pulling in $80 million, increasing by the day.

- The animated series itself

Helped drive the sales for mattel

Of "masters of the universe" into the billions.

- After taking loss after loss, "masters of the universe"

Brings mattel to the number-one spot once again,

Giving ray wagner the satisfaction

And the success that he so richly deserves.

(pensive music)

- [narrator] while mattel is back on top,

Kenner is facing a hard reality.

Lucasfilm has no plans for another movie

After "return of the jedi."

- You either have to reinvent this flagship brand,

Take it into the future, or you let it fade away

And perhaps let your lead in the industry fade away as well.

- [narrator] in 1986,

"star wars" as an entertainment property

Goes dark for the next 15 years, forcing kenner to retire

The most lucrative toy line in its history.

(pensive music)

While toy companies will always be searching

For the next hot toy,

The action figure category is here to stay.

Kenner's "star wars" and

Mattel's "masters of the universe"

Not only reinvigorated the industry,

They also revolutionized

How action figures are created today,

Paving the way for mega-hits like "ghostbusters,"

"transformers," and "teenage mutant ninja turtles."

- "star wars" has created this huge, huge ripple effect,

And what came outta that was just some amazing stuff,

And "masters of the universe"

Is like the direct descendant of that.

They really broke the mold

Of what action figures could look like.

It was like holding a action movie in your hand.

- [narrator] kenner and mattel's success convinces hasbro

To relaunch the original action figure, gi joe,

At the "star wars"

Three-and-three-quarter-inch scale.

- And you see this explosion

Of 30-minute commercials, cartoons.

(reverent music)

That's where that stuff

Really starts to change and take off.

- The action figures that are designed

Through the '80s and '90s

Are some of my favorite things ever.

- And they begin to get more and more developed.

As you increased your collection and bought other figures,

It became its own world.

These action figures have much bigger stories behind them.

They have pasts and presents.

- They allowed kids to create their own universe

Where they were the masters.

This is the world that they control,

To embody the heroes that they see

Either on the big or small screen.

- I think that's kind of why we love toys.

They become a time capsule of who we are,

The things we loved, the things we aspired to be.

- Mattel's "masters of the universe"

And kenner's "star wars"

Are the foundations of the action figure

And made this entire industry what it was then

And what it is today.

- To this day, I have seen friends

Hold tennis rackets above their head

And say, "I have the power!"