Did you know that the NSA (National Security Agency) once banned the use of a soft toy??​
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Furby was invented by Dave Hampton and Caleb Chung in 1998.
The concept was to create an interactive toy that could communicate with users and exhibit a personality.
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​The Catch-Furby was notable for its ability to 'learn' English over time, starting with a fictional language, Furbish. It featured sensors and motors allowing it to move and respond to touch and sound.

In 1998, Tiger Electronics, known for electronic toys, licensed Furby with a plan to launch it just before the holiday season and capitalize on the festive demand.
This strange animal with features of a hamster and a little owl was a symbol of childhood for a whole generation.
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Initially priced around $35, the company sold 40 Million Furbys in its initial 3 years minting almost $1.3 Billion for the toymaker.

Market was Overwhelmed
The initial demand for Furby far exceeded supply, leading to a frenzy in the market, with prices skyrocketing in black markets.
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There were also unfounded rumours about Furby’s ability to record and repeat conversations, this led to concerns in various corners of the market including intelligence agencies including the NSA, who banned its use at their Maryland Headquarters.

BUT At one point, Tiger almost lost their Cash cow

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Designers at Tiger, tried real hard to avoid similarities between Furby and the Mogwai character from Warner Bros.’ Gremlins movies, intentionally shrinking the Furby’s ears following its 1998 Toy Fair debut.

But they didn’t go far enough, Warner Bros. sued Hasbro for trademark infringement in late 1998.
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Hasbro settled, paying Warner Bros. a reported seven figures and agreeing to redesign the doll.

Reinvention:

Later on, Hasbro got the rights to Furby during their acquisition of Tiger Electronics, and the revamped version of this small wonder, got advanced sensors, voice recognition, and connectivity features.
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3 Things that made Furby Successful:

1. Furby’s charm lay in its unique language system, Initially speaking ‘Furbish,’ as its language before it gradually adopted the user’s language, a feature that fascinated children worldwide.
2. It created an emotional bond with users, particularly children, simulating pet ownership.
3. The makers adapted to changing consumer preferences and technological advancements by introducing apps and updated models.

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Key Takeaway:

1. Product Design: Furby's design, combining artificial intelligence with emotional interaction, was a game-changer in the toy industry.
2. Market Timing: The strategic launch just before the holiday season set the stage for its success, this can be a game changer for launch in crowded market spaces.
3. Customer connect: Furby demonstrated the power of products that evoke emotional connections, especially in the toy market.
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The brand also later opened doors for various inspired product lines like Furby Babies and Furby Friends which were as successful as the original.