Toy giant MGA Entertainment is the latest non-Hollywood big player to target the content business.
Based in Chatsworth and home to popular retail brands such as LOL Surprise!, Rainbow High, Bratz and Little Tikes, the privately held company has created MGA Studios, a content division backed with $500 million in capital and assets to to advance acquisitions and new productions . The unit will be led by Jason Larian, son of MGA Entertainment founder and CEO Isaac Larian.
MGA has produced animated series tied to its toy brands over the years, but the launch of MGA Studios is an attempt to dramatically improve production quality. The first step in establishing a studio operation is the acquisition of the Brisbane, Australia based animation business Pixel Zoo Animation. The value of the deal is in the low eight-digit range. Pixel Zoo founder and CEO Paul Gillett will join MGA Studios as a partner.
Pixel Zoo will remain in Australia and continue to do some work for outside clients. Now, however, it will also focus significant resources on content development to liven up what Isaac Larian calls “safe mini-universes,” online and through apps for kids to interact with the company’s brands.
The elder Larian founded the company in 1979. It went through several iterations before changing its name to MGA Entertainment (from Micro Games of America) in 1996. Today, the leader of MGA is proud of his company’s track record of building innovative toy brands from the ground up, such as: B.LOL Surprise! and Rainbow High doll franchises. MGA’s introduction of the Bratz line of dolls, which are edgier than Barbie, sparked controversy in the early 2000s that helped popularize the company.
The LOL surprise! The phenomenon, which began in 2016, took cues from the YouTube generation’s love of low-tech “unboxing” videos by incorporating that sentiment into the toy itself. The basic baseball-sized LOL packs are covered with a sphere of onion-like layers that have to be removed piece by piece, each containing an accessory to use with the little doll in the middle.
Currently, MGA Entertainment, controlled by Larian and his family, has approximately $4 billion to $4.5 billion in retail sales per year and employs nearly 1,700 full-time employees in multiple cities.
“We as a company have created 100 brands from scratch. 25 of them have retail sales of $100 million,” says Isaac Larian diversity. “Back then, my idea (for the name change) was that we really need to entertain kids. Don’t just sell them toys.”
MGA has closely observed the content boom and merging of streaming platforms with original content, games, in-app purchases, e-commerce and immersive experiences in recent years. It was the first toy company to strike a deal with popular kid-centric gaming site Roblox to build an online universe populated by toy brands. MGA’s larger rival, Mattel, has also ramped up its efforts to deliver high-quality films and TV shows to make content a new profit center for the company.
MGA is making large investments in content production because it hopes to more seamlessly integrate movies and TV shows, e-commerce and gaming opportunities, social media campaigns, and other brand-building strategies into its core toy development business.
“In the beginning, content was a vehicle to sell more toys. It was almost an afterthought,” said Jason Larian, president of MGA Studios diversity. “With this structure, we bring storytelling from the ground up with the design of the toys. It will be seamless and continuous.”
MGA Studios’ development focus will extend beyond television and film to include games and other formats.
“We’re not just looking at pure content, we’re looking at innovative companies to work with on games and digital experiences,” says Jason Larian. “We’re looking for unique ways for people to interact with intellectual property.”
The pair confirm they are in the market for more production, IP and library resources. Isaac Larian also emphasizes that they could be open to good ideas that resonate with target audiences of children and adults, even if they are not directly related to consumer products.
“We’re not just looking for toys. We want to make great films and great content,” he says. “We focus on children. We know children well. We know what they like. It’s all about the storytelling. We don’t make entertainment to sell products.”
Pixel Zoo was a natural takeover for MGA after the companies collaborated on a number of recent projects, including MGA’s LOL Surprise! The Movie” for Netflix; “LOL Surprise! House of Surprises series for YouTube and Netflix, as well as series and specials associated with the MGA toy lines Rainbow High, Mermaze Mermaidz and Let’s Go Cozy Coupe. The Company’s other brands include Baby Born and Na! N / A! N / A! Surprise.
Founded in 2013, Pixel Zoo has also done content and branding work for clients such as Lego, Entertainment One, Sesame Workshop and Saban. The company employs around 200 full-time employees.
“There’s so much we can do with all the established (MGA) brands,” says Gillett diversity. “The potential of our stories is endless. But let’s start with the story first – story is king. It’s about making sure we’re telling a story, not selling a product. We are pleased to be involved in the development of these brands from the very beginning.”
(Pictured above: MGA Entertainment’s “LOL Surprise! Winter Fashion Show,” a movie special that premiered on Netflix in October.)