Toy giant MGA Entertainment is the latest player outside of Hollywood to target the content business.
The privately held Chatsworth-based company, which owns popular retail brands such as LOL Surprise!, Rainbow High, Bratz and Little Tikes, has launched MGA Studios, a content division backed by $500 million in capital and assets, to drive acquisitions and new production. . The unit will be led by Jason Larian, son of MGA Entertainment founder and CEO Isaac Larian.
MGA has produced animated series related to its toy brands over the years, but the launch of MGA Studios is an effort to significantly raise the quality of production. The first step in building a studio operation is to purchase the animation shop Pixel Zoo Animation located in Brisbane, Australia. The deal is valued in the low eight-figure range. Paul Gillett, founder and CEO of Pixel Zoo, will join MGA Studios as a partner.
Pixel Zoo will remain in Australia and will continue to handle some work for external clients. Now, however, it will also focus significant resources on developing content to help bring to life what Isaac Larian calls “safe mini universes” online and through apps for kids to interact with the company’s brands.
The old Larian started the company in 1979. It went through several iterations before changing its name to MGA Entertainment (from Micro Games of America) in 1996. Today, MGA’s leader is proud of his company’s track record of growing innovative toy brands from scratch, such as LOL Surprise! and Rainbow High doll franchises. MGA’s launch of the more stunning Barbie line of Bratz dolls sparked controversy in the early 2000s and helped put the company on the map.
LOL Surprise! phenomenon, which took off in 2016, followed the YouTube generation’s love of low-tech “unboxing” videos by building that sensation into the toy itself. The basic baseball-sized LOL packs are covered in an onion-shaped layer ball to be removed piece by piece, and each one features an accessory to use with the tiny doll found in the middle.
Today, MGA Entertainment, controlled by Larian and his family, does about $4 billion to $4.5 billion in annual retail sales and employs nearly 1,700 full-time employees in multiple cities.
“As a company we have created 100 brands from scratch. 25 of them have done $100 million in retail sales,” said Isaac Larian The variety. “Then my idea (to change the name) was that we should really entertain the children. Not just selling them toys.”
MGA has carefully watched the rise of content in recent years and its convergence with streaming platforms’ original content, games, in-app purchases, e-commerce and immersive experiences. It was the first toy maker to strike a deal with the popular kids’ gaming site Roblox to establish an online universe full of toy brands. MGA’s larger rival, Mattel, has stepped up its efforts to deliver high-caliber movies and TV shows, making content a new profit center for the company.
MGA is investing heavily in content production as it hopes to streamline movies and TV shows, e-commerce and gaming opportunities, social media campaigns and other branding strategies into its core toy development business.
“In the beginning the content was a vehicle to sell more toys. It was almost an afterthought,” said Jason Larian, president of MGA Studios The variety. “With this structure, we are introducing storytelling from scratch with toy design. It will be complete and continuous.”
MGA Studios’ development focus will expand beyond television and film to include games and other formats.
“We’re not just looking at content, but looking for innovative companies to partner with on games and digital experiences,” says Jason Larian. “We’re looking for unique ways for people to interact with IP.”
The pair confirm they are in the market for more production, IP and library assets. Isaac Larian also points out that they can be open to good ideas that will connect with children and adult audiences, even if they are not directly related to consumer products.
“We are not just looking for toys. We want to make great films, great content,” he says. “We focus on him. We know children well. We know what they like. It’s all about the story. We don’t do entertainment for the sake of selling products.’
Pixel Zoo was a natural acquisition for MGA, after the companies worked together 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 related to the Rainbow High, Mermaze Mermaidz and Let’s Go Cozy Coupe MGA toy lines. The company’s other brands include Baby Born and Na! Well! Well! surprise
Pixel Zoo, founded in 2013, has also produced content and branding work for clients such as Lego, Entertainment One, Sesame Workshop and Saban. The company has approximately 200 full-time employees.
“There’s only so much we can do with all the established (MGA) brands,” says Gillett The variety. “The potential of our stories is endless. But we want to start with the story first: the story is king. It’s about making sure we’re telling a story and not selling a product. We are very excited to participate in the development of these brands from the beginning.”
(Pictured above: MGA Entertainment’s “LOL Surprise! Winter Fashion Show,” a special that premiered on Netflix in October).