The Toys That Built America

On the shores of Lake Minnetonka,

a struggling toy company is in desperate need of a new hit.

All right, uh, micro bots?

No.

Change bots?

Anything? No, okay.

Tonka in the '80s, was already well known for their trucks.

Ultra bots.

One did not say Tonka without the word truck after it.

I'll put a maybe down.

But it wasn't exciting, it wasn't fresh.

To turn the company around,

Tonka is betting on a revolutionary new toy.

Machine men?

They just need a name.

Okay, transform men, no.

Transformers, transformers.

But they need to move quickly.

I love it, how soon can we have it on the shelves?

Industry giant Hasbro is hot on their heels

and about to launch their own shape changing toy.

- Great. - It's perfect.

The race to rule this new toy frontier

will generate nearly half a billion dollars

in just one year.

We wanted to wipe them out

and make sure that our brand was the one.

In the end,

only one company's creation will become

a nine billion dollar multi-media legend.

We knew they were coming

and we knew they had more money than us.

The other...

Transformers.

No, it won't work, it's too complicated.

They could have named their toy transformers!

The toy transforms.

May the best bot win.

Calling Steve Austin on Mars, your radio signal's weak.

The new six million dollar man

with bionic grip.

By the early '80s,

action figures with their own TV show or movie

ruled the toy world for half a decade,

led by Kenner's "Star Wars" line.

You can't underestimate the power of "Star Wars".

That runaway success certainly fueled

the power of what action figures could be.

Your search is over, Luke.

Ben Kenobi and Yoda.

Having entertainment connected to your toy line

was very important.

Everyone started looking for the next "Star Wars".

Including Tonka's CEO Steve Shank,

who's eager to dig his company

out of a 10 million dollar hole.

Tonka is lost in the '70s.

It was an institution.

Everyone had that sort of

landmark classic yellow Tonka truck,

but we started to see that be not as hot

when "Star Wars" came in,

there was more of an element of space, and fantasy.

Video games had become incredibly dynamic.

These had a lot of animation, a lot of action,

things change, things exploded.

The market shifted and they didn't shift with it.

Now deep in the red, they need fresh ideas.

But they were off by themselves,

Minnesota, you know it's not this mecca of toy creation,

you don't have people going there to pitch ideas.

Tonka was literally out of the loop,

they were almost like a flyover toy company.

He needed to bring some people in

who could help him turn Tonka around.

- I know. - (knocking)

Yeah, come in.

Shank hires Mattel veteran, Pat Feely,

who was part of the team that made He-Man a massive hit.

Pat Feely didn't feel like he was getting promoted

fast enough at Mattel,

so he comes to Minnesota to remake Tonka.

It was a huge risk

going from the big time to the small time.

We're losing our shirts trying to come up with new toys.

They brought Pat in to say,

"Hey, we wanna become a toy company,

not just a vehicle company."

Exactly, so this time, we license one.

Let's take a short cut, let's license an existing toy.

Now, that saves them an unbelievable amount of time,

because all of the manufacturing

and all of the fabrication apparatus is in place.

Determined to find the perfect toy,

Feely looks everywhere, he even scours the inventory

of a company going out of business, Knickerbocker.

They did some licensed dolls, I think they were most famous

for the Raggedy Ann and Andy line of product.

And he comes across a very interesting toy

that seems right at the crossroads

of the high tech appeal of the video game

and their wheelhouse, metal vehicles.

It was two toys in one,

like oh, this is a car and it's a robot.

Unfortunately, this is a cheap knock off.

The real toys are 6,000 miles away.

The toys of Japan were something

that we've never seen before,

it was like something brand new.

So over in Japan, a company called Bandai

was making a line called machine robo,

and they were transforming vehicles for the most part

that would turn into robots.

Luckily for Feely, his new sales director

has the inside scoop on machine robo.

I had worked for Bandai America,

said to him, "Pat, the focus groups were off the charts."

So then I wanted to launch it in America

but Bandai disagreed,

they wanted us to do solar powered, hand held games.

Solar powered games,

which, I mean, games were big at the time,

I get it, but the idea didn't hit.

Desperate to make a deal,

Feely and Shank head east

hoping to snap up Bandai's machine robo

before someone else does.

To our partnership.

Kanpai.

But there's one thing.

We need a bigger buy.

So Bandai, they don't think it's gonna work,

so they say, "If we are going to partner with you,

we want the security of a sweet deal."

800,000 units.

Which is bonkers.

I don't think Tonka had ever sold

800,000 pieces of anything.

But Tonka was really really desperate.

That is a massive buy for an unproven toy

in an unproven market.

This is really Tonka going all in.

A gamble that's about to get even riskier.

When Japan's robots hit the radar of a U.S. powerhouse.

Hey, it's Hasbro, Hasbro makes toys.

What's new, Hasbro?

Hasbro, at that time,

would've been the number two toy company

in the world right behind Mattel.

They were a juggernaut.

From Mr. Potato Head to My Little Pony,

Hasbro has launched some of the most iconic toys

of all time, but one stands above the rest.

We wouldn't have had action figures

if we didn't have G.I. Joe.

So G.I. Joe had first been piloted

in early 1960's and was really, really popular.

But there was a big problem, obviously,

trying to sell G.I. Joe during the Vietnam War.

After discontinuing him in 1978...

Hasbro reboots the line four years later.

That was such a major success.

The stock sky rocketed, our sales sky rocketed.

But I think they knew this would be great for a while

but at some point it will reach its saturation point

and you have to have the next thing.

Toy pitch man, Henry Orenstein,

believes he's found the next big thing.

Henry was a total independent,

I mean, he said, "I'd rather live in one room

with a card table and a chair than work for somebody,"

and he meant it.

It's just a truck.

Are you sure?

There was a company called Takara in Japan

that had two lines that had some transforming figures,

they had the Diaclone and then Micro Change.

After discovering them in Japan,

Orenstein rushes back to pitch a shape changing truck

to Hasbro's Stephen Hassenfeld.

Stephen Hassenfeld was the CEO of Hasbro at the time.

The Hassenfeld brothers were the "Has" in Hasbro,

so Stephen was third generation.

It's a vehicle,

it's a puzzle, and it's an action figure.

It's three toys in one.

I love it.

Intuition, I mean, he could feel a toy,

you know, he could feel an idea.

How soon can we have it on the shelves?

The toys were exciting toys.

So I'm holding this toy,

but if I do this, I have a completely different toy.

Boom, off to the races.

As Hasbro goes all in

to make transforming toys its next big hit,

little do they know, scrappy Tonka is already a step ahead.