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Furby - The profit margins
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Mr Tree

How did the furby creator become worth $4 billion?

In total, 40 million units were sold. Beginning at $30 an item, at their highest peak sold up to an amazing $100 per unit. But even at that price, a 10% royalty would have raked in only $400 million. How did that amount multiply by one-hundred times, to the $4 billion? Where is the error in this thinking?

posted January 02, 2012 03:22 (
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Luis Rodriguez
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Yeah, I know, Greg. I have the book ‘The Toy and game Inventor’s Handbook’ by Richard C. Levy & Ronald O. Weintgartner.

I just rolled the pages looking for something about “Furby”. I knew there was something in there.

On page 82 there is a copy of Design Patent D0423611, issued April 25, 2000 for ‘Animatronic Toy’ with a perspective pix of some toy resembling ‘Furby’.

Inventors listed: David Mark Hampton, Caleb Chung, Richard Levy, and Christl Ann.

This is obviously licensed to Hasbro. ((There are several notes in the book about this))

Then a little detective work for a utility patent, searching for ‘Hampton, David’ and ‘Chung, Caleb’ on Google returned this patent, where Levy is not listed.

http://alturl.com/yvxe7 ((Interactive Toy. Licensed to Tiger Electronics, LTD))

In brief, inventing and developing are clearly two different things. Not to demerit the developing contribution. On the contrary. Developing (and hewlping to bring to market) may in fact be more important in the large scheme of things.

Many nice inventions are unknown for lack of commercial development. I know. I have quite a few of those :o) :o) :o)

posted January 04, 2012 15:21 (
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greg bruce
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Luis I believe he IS the co developer of Furby and it looks like you are correct about the legend too. His auto bio from 2002 claims over 1 billion dollars in combined retail sales from all of his 125 commercialized products. That’s quite a jump to 4 billion in personal worth in ten years.
Nevin don’t believe everything you read. Unless of course I wrote it.

posted January 04, 2012 14:18 (
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Luis Rodriguez
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A wikipedia article does not mention Richard Levy as a creator/developer

EXCERPT>>HistoryBirth of the FurbyDave Hampton and Caleb Chung spent nine months creating the Furby (in addition to nine months spent designing the toy). Early on, Tiger Electronics showed an interest in their interactive creatures, and Roger Schiffman bought the rights to it. Furby’s first public appearance was at the American International Toy Fair in 1998.

Furbies originally retailed for about US$35,2 and upon release, Furbies flew off the shelves in toyshops. Catapulting demand for these toys during the 1998 holiday season drove the resale price over $100, and sometimes as high as several hundred dollars. Furbies sold for over $300 in newspapers and in auctions. Nicknames were given to them, and sellers assigned rarity values to them. Some people continue to call their Furbies by the terms ‘wedding Furby’, ‘tuxedo Furby’, ‘snowball Furby’, ‘biker Furby’, among others. All, of course, were dubbed rare by sellers, because they were so hard to find at the time. In a sure display of the demand for the toy, some sellers at scammed people out of a great sum of money, without even having first given them a Furby. Parental battles, arguments, and fights increased rapidly as supplies dwindled, and when retail supplies ran out, parents turned to the Internet, where Furbies could be purchased for two, three, or more multiples of their retail price. During one 12-month period, a total of 27 million Furby toys were sold.[citation needed]>>>END OF EXCERPT

Other articles, do cite Richard Levy as a co-developer. For instance:

http://web.mit.edu/invent/iow/rlevy.html

The 4 billion number sounds ‘urban-legendish’ to me. I don’t know.

posted January 04, 2012 07:33 (
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greg bruce
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Nevin, I believe you are referring to Richard C. Levy. Furby was only one of his products. He wrote a book for the “Idiot’s Guide” brand called “The Idiot’s Guide To Cashing In On Your Inventions” You may find your answer there. I read the original but I hear there is a revised version which got a luke warm review in Inventors Digest last year.
At any rate I believe he is a prolific inventor and an agent and has a number of licensed products on the market.

posted January 02, 2012 07:39 (
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