The Lives and Deaths of RC Companies

[Dangeruss]

In my last Vintage Scans post juicecoupe and 1911Colt brought up some interesting points...

From a business standpoint, it was a great decision.

AE and Losi are now owned by other companies and Traxxas is a titan. As a whole (not their individual brands), Horizon is their only real competition.

Absolutely! I was shocked when I returned to the hobby and discovered that "good but not good enough" Traxxas basically owns the hobby now. Never mind hobby shops, you can buy Traxxas at the hardware store, the bait shop, the auto repair shop....

As a racer (albeit a terrible one) I had tunnel vision. I only saw who won races, and it usually wasn't Traxxas. Little did I know 99.99999999% of RC vehicles never see a track. It is like real cars. MaClaren and Ferrari fight for F1 titles. Meanwhile Toyota quietly sells a billion Corollas and could buy MaClaren and Ferrari with money from their coffee budget.

Which beg to ask the question... which is worse, for your favorite company to go out of business? Get bought by another entity and gutted for profit? Or change with the market to grow to become something you don't like in doing so?

The RC industry has and will follow the same curves as every other industry as time passes. Looking specifically at the automotive industry as a parallel, Ferrari, Porche, Lamborghini, etc. all figured out that you have to sell mass market cars to make enough money to sell race cars as they all nearly went bankrupt until doing so. Losi did this with the Junior-T, Traxxas with Rad/Hawk/'Hammer.... but Associated never did, now look at them. And as 1911Cold pointed out, Toyota outsells Mclaren and Ferrari put together by a wide margin.... however, without Ferrari, would F1 even exist?

Same questions within RC... If Associated fails, does ROAR fall as well? Back in the day the companies were started because the owners saw it as an exciting opportunity to earn a living, but as the industry sold out to larger corporations it has become solely about profits and the conversation comes full circle.

What are your thoughts?

[juicedcoupe]

What are your thoughts?

In my opinion, there is no real money to be made solely with racing. A race car is just a hole to throw money in (at any level, RC or full scale).

The money in racing is made with sponsorships (advertising) and sales promoted by winning (more advertising).

The Holley corp doesn't stay in business by selling parts to racers, it is the general population hot rodders that keeps their doors open.




People say that Traxxas got out of racing. Kinda, but did they really? Look at SCT's, Traxxas basically invented them at the RC level.

They just know where their bread is buttered, and it isn't with full-tilt race cars.

[coxbros1]

What are your thoughts?

They just know where their bread is buttered, and it isn't with full-tilt race cars.

True!...vintage seems to turn a tidy little profit...even if those old race cars are uncompetitive.

[Lizardking]

AE is owned by Thunder Tiger which has a reported annual revenue of 28M (2017). Losi is owned by Horizon Hobbies which had a revenue of 345M (2023). Horizon owns a bunch of other brands such as Axial and Arma so its not just Losi. Traxxas had a reported revenue of 25 to 50M. I’d say all three were fairly successful. AE and Losi were sold by the owners when they wanted to retire. Traxxas was kept in the family in a way. All three brands bring something to the market.

[RogueIV]

Personally I hate what Losi (and TLR) has become after Horizon got a hold of them. They have some cool products but the part support is garbage and they don't seem to want to do anything in the 1/10 scale market anymore. They put out a car for a year and a half then discontinue it.

[Tucsonan]

I'm not really worried by the success of Traxxas. Lots of people have noted the size of the RC bashing market is huge compared to the racing market. Traxxas probably helps keep the hobby viable by bringing in new blood. What concerns me more is the consolidation of retail into large online conglomerates. Amain bought hobbytown and Horizon bought everything that wasn't nailed down. We have no dedicated RC tracks and a single RC and model hobby shop in my town and it doesn't have a web store front. I'm surprised they manage to stay open. Honestly I'm surprised a lot of local retailers manage to stay open.

Right now I've got a huge order open with Amain and I'm thinking maybe I should just cancel it, shelve my new projects for a bit and special order what I need to complete them from the local shop some time down the road.
I don't know, maybe I'm just surly tonight from bad customer service experiences with Amain.

[RC10th]

The hobby isn't the same as it was in the late 80's and 90's. It has become way more corporate and lost the magic that it once had. I'm just glad I grew up in the hobby when I did.

[Lowgear]

The hobby isn't the same as it was in the late 80's and 90's. It has become way more corporate and lost the magic that it once had. I'm just glad I grew up in the hobby when I did.

Unfortunately, the same can be said for many many things. Movies, music, etc... The '90s was the last great decade to me. Everything started slowly going to crap after the turn of the century. Since then the decades haven't been definable. It's all just been one long run-on sentence.

[ZED32]

special order what I need to complete them from the local shop some time down the road.

THIS is why my big projects never get finished. I love tamiyas, and the hobbytown near me doesnt carry tamiya stuff. Neither does the smaller hobby store that's farther away. Neither does the the larger hobby store that is specifically dedicated to RC cars. If I want a part, I am basically forced to order it online.

[Dangeruss]

Given that we all grew up in the heyday we bring our perspectives of the time forward with us. Associated was race cars, Traxxas was toys, Losi split that difference... but what about the guys with kids that are into RC... what's their opinions of the companies these days, because this is their heyday...

...dark thought, if we say things aren't as good now as they were then... how bad do you think it'll be in 30 years when THEY say the same thing.

[juicedcoupe]

but what about the guys with kids that are into RC... what's their opinions of the companies these days, because this is their heyday...

My first car was a Cox Bandido, basically a Kyosho Pegasus. Other than basic items, my LHS had nothing of use.

This is why I bought my son a Traxxas Stampede, the other got a ECX Amp. There was never any doubt about "if" it would break, but being forced to wait for parts really takes the joy out of it.

[1911Colt]

Since then the decades haven't been definable. It's all just been one long run-on sentence.

Terrific summary!

[Radioflash8]

I'd rather see a company change to fit the market, AE had the right idea selling to Thunder Tiger over letting HH buy them out. Looking back in the early to mid 2000s, I feel like there was more variety before a number of the smaller companies were scooped up and gutted out, or lawsuited out of existence.

I started the hobby with a used Rustler way back in the day, like mid 90's, before Traxxas was a big shot. Being able to freshen it up decades later was nice.

And I agree on the 1990's, it was one of the last decades with its own identity. We currently live in a "zombie culture" of resurrecting old films.

[RPMfieldtester]

Racing existed as a marketing and attention grabbing tool and has been forgotten by the current mega owners, most of whom did not grow up as R/C boomed. The first time I saw affordable, relatable R/C racing was at the Score off road show at the Anaheim Convention Center. My dad brought me to the show mainly to see the cool offroad stadium cars and trucks from the Mickey Thompson series. The biggest crowd was standing room only, 3 4 5 people deep watching the Tamiya cars racing around the dirt indoor track. So many R/C racing fires were lit that weekend! A whole industry grew from this and other similar events...but that was then.
Last year, the yearly RCX Show at Pomona fairgrounds occupied one of the smaller buildings and was lumped together with other non related shows at the fairgrounds. A small crowd, few vendors and no real vibe made it a bit pathetic for an "industry show" with little to no industry support. That said, the biggest crowd was around a scale village with R/C trucks and equipment driving around scale streets. Not racing, just driving around. People were drawn to it and there was a small crowd every time I looked. This could just as easily been a crawler course or an off road track had the industry been interested enough to show up and support it.
I bring this up because back at the beginning, I saw the small companies become bigger companies then sell out to Trinity and later Tower and Horizon and then witnessed the destruction of the hobby. R/C has a very dysfunctional history and the current all corporate involvement makes it self-destructive.

[juicedcoupe]

R/C has a very dysfunctional history and the current all corporate involvement makes it self-destructive.

It's not just RC, it's everywhere.

In the automotive market, a handful of companies own most of the major brands. Holley, Edelbrock, Comp Cams, and Summit own probably 50%+ of the market. After that, the Chinese counterfeit market is huge.

It's even worse in car audio. A few companies have bought up many of the old school brands and put out junk with those labels on them. It's sad to see what MB Quart, Autotek, and others have become.