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Robotic toymaker Sphero has been selling its products at deep discounts recently. Holiday sales are nothing new, but there seems to be more to it than that.
Sphero is reportedly clearing its inventory and is marking the products as “legacy” meaning they will no longer be making or supporting them going forward. The products primarily affected are licensed Disney toys like BB-8, R2D2, Lightning McQueen, and Spider-Man.
Apparently, the company is looking to go back to its roots. Amid company layoffs last January, leadership said it was restructuring and shifting back to an educational focus. Sphero CEO Paul Berberian told The Verge that while the licensed merchandise was initially profitable, diminishing returns and continual support of the products was a losing long-term proposition.
“When you launch a toy, your first year’s your biggest,” said Berberian. “Your second year’s way smaller, and your third year gets really tiny.”
Its educational products were the exact opposite. SPRK+ toys become more popular over time. The dynamic is easily illustrated by looking at the end consumer. Star Wars fans are a limited market. Everyone who would possibly want a BB-8 already has one. The same for all the other licensed toys.
Contrarily, the educational toys see a new generation of interested buyers almost every year as kids get to the age where they are interested in such things. So the decision to focus on the educational market was apparent.
"In today’s world, we know STEAM education is more important than ever," said Berberian in a statement to TechCrunch. "There’s a huge opportunity to inject our technology into this field to teach kids crucial real-world skills, through fun, interactive learning."
If you happen to own one of Sphero’s Disney-related toys, all is not lost. You still have at least two years before the company pulls support for the apps used to operate them. After that point, the toys will be operational until changes in mobile operating systems are significant enough to disable them.