Hasbro, Galoob Sign Deal To Produce Star Wars Toys Two Companies Split Biggest Toy Licensing Agreement Ever

Hasbro Inc. and Galoob Toys Inc. on Tuesday won the rights to produce toys for the three new Star Wars movies in a deal that analysts call the biggest toy licensing agreement ever.

While both companies declined to disclose terms of the agreements, Star Wars is already the best-selling toy license to date, with millions of dollars in revenues each year. Galoob, meantime, offered almost one-fifth of its stock to the films’ producers at an attractive price.

“Star Wars is the biggest success story in the toy industry,” said Frank Reysen, editor of Playthings magazine, a New York-based trade publication. “Since the original movie came out 20 years ago, there’s hardly been any let up in demand for Star Wars’ toys.”

Hasbro, the No. 2 U.S. toy maker, and No. 3 Galoob already hold the licenses for the original Star Wars trilogy. Both companies gained rights to the much-awaited “prequels” from Lucasfilm Ltd.

Mattel Inc., the largest U.S. toy maker, reportedly was interested in the contract, but was left out by Lucasfilm.

Hasbro will produce core action figures, vehicles and games, and will also venture into some new Star Wars’ categories, including electronic hand-held games and creative play products.

Galoob was awarded the rights to small-scale figures, vehicles, playsets and accessories.