The Evolution of Star Wars Merchandise

This article is presented by eBay

The Star Wars saga is more than just the film franchise that changed popular culture, it’s also an ongoing tale of merchandise. Apologies to Woody, Buzz, and the toys in that other Disney-owned property, Star Wars is the best, biggest toy story. 

Not only did George Lucas alter the way licensing deals are made, but Star Wars toys also changed the popular format of action figures, and even kickstarted a collecting craze that continues today. According to Sharon Scott, historian and author of Toys and American Culture: An Encyclopedia, consumers took note when well-preserved Star Wars toys started becoming collectible – and worth a bit of money. “From the 1980s onward, it became common for Americans to purchase toys and keep them for collectible purposes,” she writes. 

But that journey to the shelves began with the near Force-sensitive foresight of George Lucas. Below, we take a look at the biggest moments in Star Wars toy and collectible history that altered the galaxy.

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Lucas’ Gamble 

Decades before Star Wars had its own Force Friday merchandising event, 20th Century Fox assumed it had a stinker on its hands with George Lucas’ space opera. As such, the studio had little interest in maintaining merchandising rights to the film. But Lucas had confidence in his movie, and predicted a world where fans would wish to recreate his worlds via toys and collectibles. In a move that seemed reckless at the time – and probably had Fox execs chuckling at the young director’s poor negotiating skills – Lucas ceded $500,000 of his directorial paycheck in order to keep merchandising rights.

George Lucas is currently worth $6.4 billion, according to Forbes

Kenner Signs On 

Before his movie changed entertainment history, George Lucas didn’t have any takers to make Star Wars toys. Not even Mego Corporation, the company behind 8-inch action dolls of DC Comics and Marvel Comics, was interested in the license. That changed when the Cincinnati, Ohio-based Kenner Products signed on as a manufacturer of toys in the form of 3 ¾-inch action figures, which soon became the industry standard. 

The small, relatively affordable toys, along with vehicles and playsets, were so successful that it allowed Lucas to finance The Empire Strikes Back, and Return of the Jedi. Perhaps one of the most famous, and true, toy stories ever is that Kenner had to sell mail-away “early bird” packages for figures of Luke Skywalker, Princess Leia, Chewbacca, and R2-D2. This was necessary because they only closed the deal about a month before Star Wars hit theaters. And they had no product. Plus, no one anticipated the popularity of the film (and Lucas was highly protective of his character designs).

Regardless, the early-bird gimmick worked. Consumers who purchased the toys during the 1977 holiday season received a display stand and a Star Wars fan club card with the figures mailed in Spring 1978. The original toy line that hit shelves came to include Darth Vader, Obi-Wan Kenobi, Han Solo, C-3PO, Stormtrooper, Jawa, Sand People, and “Death Squad Commander” (who eventually became “Star Destroyer Commander”). 

Kenner’s sales during 1978 and 1979 hit $100 million dollars, and the original line reached 79 characters by 1984, the year after the Return of the Jedi.’s release.

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The Force Re-Awakens 

Kenner’s licensing deal with Lucas was so good it seemed like the toy company used a Jedi mind trick over George. As detailed in the excellent Netflix series The Toys That Made Us, Kenner snagged rights to the toys indefinitely and “intergalactically,” with Fox and Lucas splitting but a nickel for every dollar sold on the Kenner line. The deal was renegotiated two years in so that Kenner had to produce enough merch every year to pay Lucasfilm $10,000 in royalties–which is mere credits considering the sheer volume of product Kenner was moving.

However, after Return of the Jedi, vintage Star Wars figures came to an end in 1985 with the Power of the Force line. The last item released was the highly collectible Yak Face, which was sold outside the United States. Things quieted down for the brand, and Hasbro bought Kenner in 1991.

And then they forgot to pay the $10,000 fee to Lucas. With the contract voided, Lucas coincidentally announced in June 1994 he was returning to Star Wars with the prequels. 

Hasbro negotiated a new deal (with a much more profitable 18 percent base royalty rate for Lucas), and began work on the Power of the Force 2 action figure line, released from 1995-2000. The toys were carded with the classic Kenner logo, and initially featured buffed-up versions of characters (Luke in particular looked like he had been hitting the gym hard, but he reflected the style of the Schwarzenegger-inspired toy trend of the mid-90s). It also began listing characters such as “Walrus Man” with their movie names (Ponda Baba), and included Expanded Universe figures, while reusing many of the same vehicle molds from the earlier Kenner line.

The Power of the Force 2 line re-invigorated the Star Wars toy market, and even spawned collectibles (such as the Weequay Skiff Guard Freeze Frame figure) though the items were less rare than their ‘80s siblings. Following POTF2, Hasbro focused on The Phantom Menace toys, and kicked things off with a Mace Windu figure and STAP (Single Trooper Aerial Platform) with Battle Droid preview toys. And long before the Force Friday merchandising holiday, Toys ‘R’ Us hosted a Midnight Madness “The Source of the Force” collection premiere in 1999. The Darth Maul figures were a hot item, even though some early figures had errors and incorrect tattoos.

LEGO Builds A Galaxy

Though Star Wars toys were uniquely the domain of Kenner, then its parent company Hasbro, LEGO entered the galaxy far, far away in 1999 (in advance of The Phantom Menace) with mini-figure sets based on Episodes IV, V, VI, then the prequel films. This was the first intellectual property licensed by LEGO, and it has been a hit. The company has made toys for every subsequent Star Wars property, as well as building out their own with LEGO Star Wars video games, and even a television series. Moreover, the marriage of Star Wars, and LEGO – in addition to contributing to $1.83 billion for 2018 profits — have led to hot collectibles, such as the Ultimate Collector Millennium Falcon set, which has sold at auction for more than $5,000.

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The Empire Strikes A Deal

Despite the dark near-decade of 1986-1995, when no new movies or toys were produced, Star Wars had been re-building its presence throughout with the films’ re-release, novels, and, of course, merchandise. With the turn of the 21st Century and the advent of the prequels, and later, the Clone Wars TV series, the franchise had some fresh coaxium in the tank. 

Skip ahead to 2012, and a deal that had been in the works for a while solidified: The Mouse House of Disney purchased Star Wars–and the merchandising rights–from Lucas for $4 billion in cash and stock. The acquisition yielded returns in kind for the Disney Empire; they picked up an estimated $5 billion in the year following the 2015 release of The Force Awakens, and remains a multi-billion dollar industry. While Star Wars consumer products went beyond toys long before Disney’s purchase, the Magic Kingdom has created an expanding universe of items that can be acquired (which includes an entire Star Wars land at two theme parks).

In addition to “The Black Series” of collectible 6-inch toys (the first in Star Wars merchandising history), the Star Wars collectibles market has gone on to include cookware, prop replicas, highly detailed sculpts, sneakers, timepieces, and more. But a long time ago (well, 42 years ago) the merch saga of Star Wars was largely defined by the toys.