There’s no shortage of historical figures, periods, and events in the world, so there should be endless niches to tap with reality-based action figures. Companies like McFarlane Toy and Dragon Models USA are reaping big sales in sports and military genres, but their very success 
might be keeping other companies from these lucrative niches. Last year, Gearbox Toys (ToyDirectory) released six World War II action figures, only to find the market too saturated to support them, so the company changed gears. “I think Dragon knows they’re saturating the market,” said Tharren Keith, action figures product manager for Gearbox Toys. “Now prices are dropping.”
To find room to grow, companies need to move into relatively untapped niches, which offer new markets and retail options. NSM Resources/Huckdoll’s extreme sports figures (ToyShow) have been selling 
well at X-Games and similar events. Dog Soldier’s (ToyShow) current top seller, the 9th Century Norse Raider, has been selling well at Renaissance Faires as well as toy stores, and Gearbox’s authentic historic firemen have been selling well through museums and specialty shops.
Crucial to the success of many reality-based action figures are alternative outlets. Museums, specialty shops, and educational toy stores are an under-tapped element of the action figure market, despite being lucrative venues for other types of toys. Reality based figures with historical or educational value, such as Action Products International’s Space Voyagers line of astronauts and space 
vehicles, are the perfect match for stores that shun violent themes and movie, television, or comic book licenses. Another manufacturer, Papo, has recently introduced a line of highly realistic plastic animal action figures, designed to be proportionate to one another (For example, a horse is adequately larger than a dog).
Other reality figures seek the cross-market appeal of event marketing and mainstream toy stores. Mahdavi Toy’s (ToyShow) Trojan Heroes line, for example, have enough history and educational value to get displayed in educational shops. Though the figures are not licensed, they will be released in conjunction with Warner Brothers´ motion picture epic Troy in May. “This movie will draw the markets attention to the Trojan War and its heroes and legends, and therefore draw the attention of collectors and kids to our product line,” said Paymohn Mahdavi, president of Mahd
avi Toys. Following the success of Lord of the Rings, studios are once again green-lighting “swords and sandals” epics. If this revived genre proves successful, look for it to become a major source of reality toys.
It may also become a major source of market glut. License-free popular characters can quickly get overdone and become tiresome to kids and collectors, such as the police, fire, and rescue toys that flooded the market after September 11th. After three years “they’re still on the shelves, marked down but not moving,” said Gearbox’s Keith, who sees quality and scarcity, aspects that appeal mainly to collectors and the adult market, as the key to the reality figure market. “If a collector sees the same toy on the shelf two months after its release, he’ll back away,” he said.
What collectors want is well suited to the cottage industry. “Smaller companies [can] offer high-quality products and survive by serving a niche audience,” said Mike Gauldin, president of Dog Soldiers. Add to that equation the power of the Internet to connect interest groups, cottage industries, and overseas production companies, and you’ve got the potential for big business with low overhead.
