Did Lionel Legacy Bluetooth Kill MTH?

IMO not even close.  I think the uncertainty of MTH over the past few years could be a bigger obstacle than Lionel Bluetooth. That being said the special runs seems to be going strong so I'm not sure that MTH is having any problem selling trains.  I can see an issue with smaller stores but the bigger guys seem to be doing well with MTH products.

Thanks, Marty.  That makes sense.  The shop I mentioned does primarily in-store sales and some eBay.  There are by no means a "big player."  I wonder how this might play out for MTH long term, if the folks entering the hobby via their local train shops are more interested in Bluetooth control?

@MoPac858 posted:

  I wonder how this might play out for MTH long term, if the folks entering the hobby via their local train shops are more interested in Bluetooth control?

That still assumes that your particular shop's experience is universal. There have always been shops that sell more of one brand than the other. It's really up to the local clientele (which to an extent can be self-selecting).

---PCJ

An excellent point, my question is based on n=1 observations.  What I found compelling is that this shop (in the greater LA area) is not even ordering new MTH, since demand is for Lionel Bluetooth enabled gear.  Perhaps it's a West Coast thing.

There is an old expression about using one instance to prove a rule or trend (though there is a field in data science trying to find a way to predict a trend based on one data point, well above what I understand). As seen by people on this board, it would be hard to claim that Lionel bluetooth control of legacy engines has even hurt MTH. Among other things, MTH has been in flux whereas Lionel has been continuously operating (base3 vaporware or not), the way the MTH drama played out makes it hard to say what its future is. Legacy 2.0 with bluetooth control itself is relatively new to the market, traditional legacy which is still out there doesn't support it as far as I know (and I could be wrong).

Is the shop owner wrong? No, because that reflects his experience. I will add that people may not be buying MTH because they know of the whole upheaval and are afraid it won't be around, perceptions are a big. Could also be that shop owner has people who love the app interface and like not needing a command base, could also be realizing that you can't get MTH or Lionel Bases they are going with what can work without them.

@MoPac858 posted:

Greetings all,

I am a long-time Lionel TMCC and MTH DCS operator and was visiting one of my favorite model train shops yesterday.  The store mgr and I were discussing MTH and I asked if he was able to get product since the reorganization of MTH post Mike Wolf.  To my surprise he shared that they could easily get new MTH product but there wasn't much demand for it, as most of the interest from buyers is in Lionel Legacy engines with Bluetooth capability.  He elaborated that this innovation from Lionel allows simple wireless train controls without an additional Legacy or command base.  I know MTH developed a DCS WiFi module (50-1034) and an Android/iPhone app but I don't think it evolved into Bluetooth capability without the TIU and WiFi unit.  It left me wondering if this contributed to MTH decline and eventual sell off into separate parts.  Also, will the "new" MTH develop a similar control system or has their control technology been sold to Atlas.  I am still interested in MTH, but it seems like the leading edge in the hobby is now Lionel Bluetooth.

I am very interested to hear folks' thoughts on this.

MP858

I don't believe there's any relationship whatsoever.

Mike Wolf was looking to retire, and the opportunity to sell the MTH building (right before COVID, for $14.5 million!) was the trigger.

He wasn't able to sell the company lock, stock, and barrel, so he sold tooling to several model train companies and set up three small companies to continue development of DCS (MTH licensed--did not sell--DCS to Atlas), sell parts, and produce small runs of product from remaining tooling.

@MoPac858 posted:

most of the interest from buyers is in Lionel Legacy engines with Bluetooth capability.  He elaborated that this innovation from Lionel allows simple wireless train controls without an additional Legacy or command base.

Give the fact that the current generation or remotes and engines have a very limited range, I can't imagine this being a giant killer.  When they get sufficient product, both engines and remotes, with the longer range BT, maybe it'll be more desireable.

I think he has the order backwards.  MTH could have adopted Bluetooth.  When they didn't, I thought it foreshadowed they were throwing in the towel.  What that store owner said sounds like a sales pitch.  He's long on Legacy inventory.

In the traditional size market, there is still great value in MTH. I recently bought a new PS3 MTH Imperial Hudson from Mario's Trains for $420 shipped to my door (free) using one of their coupon codes.  I could have preordered an Lionchief 2.0 Hudson from them for $585. Bluetooth doesn't bring enough to the table to justify the extra $165.

This PS3 engine has since been upgraded with a quilling whistle at no cost which is a feature I really enjoy but not available on the LC2 line.

@H1000 posted:

I could have preordered an Lionchief 2.0 Hudson from them for $585. Bluetooth doesn't bring enough to the table to justify the extra $165.

This is an easy choice for someone that runs both DCS and TMCC/Legacy and want's a semi-scale locomotive.  The MTH Imperial is a really nice product line, and I'd certainly rate it higher than the LC stuff.

The issue is more a matter of expedience on the manufacturer's part.  They cant keep the command system in stock. So they built in a way to get the engines out of boxes while you, the customer wait for it to come back in stock or get lucky finding one online.

I never really understood what the bluetooth added to a Legacy locomotive.  It turns a $550 diesel or a $1500+ steam engine into a lion chief locomotive. No fine control, basic sounds, no additional features.  I used BT once, in a hotel room at York with a locomotive I'd bought earlier that day and didn't have a remote with me. I couldnt understand why you would kneecap a locomotive's potential like that. If you want the full features, you still have to buy the command system.  If you can throw away money on a locomotive to use a fraction of its potential, it seems to me like you can skip a couple boxcars and get the full command system.

I seriously doubt it had anything to do with MTH's "downfall", and more like someone had no purple boxes, but needed to move a few orange boxes out the door.

It'd sure be nice if Lionel would put a DCC decoder in the legacy circuitry so that everything could finally be run together without this 2 system nonsense.

Boilermaker1, my thoughts exactly!  I like your thoughts on adding the DCC as well.

Must not have gotten in on any of the MTH special runs. 

It is my understanding that although the DCS is a reliable and convenient operating system, it lacks the sales numbers to be viable in the current environment of the model train market.

it’s not a question of do enough people use it.  It is a question of can new to market customers obtain it at a reasonable cost.   As most hobbyist start small and gradually add to their hobby over time, MTH’s current structure does not invite new participants into their brand.  To an outsider MTH is hanging on to support their very angry dealers who have for the past decade or so, have pushed customers to MTH products and away from Lionel products  Now many of those dealers are stuck having eschewed Lionel in favor of a brand that is on the way out.  One need look no further than the case of Betamax and VHS.

Lionel pays a healthy licensing fee for every device that is Bluetooth.  Because Bluetooth is universally available it was a smart move.  

@RixTrack posted:

It is my understanding that although the DCS is a reliable and convenient operating system, it lacks the sales numbers to be viable in the current environment of the model train market.

Based on what?

@RixTrack posted:

Lionel pays a healthy licensing fee for every device that is Bluetooth.  Because Bluetooth is universally available it was a smart move.  

Where is this information coming from?  Truthfully, any per-device would be at minimal cost.  Bluetooth licensing is for a product type from all I read.

Bluetooth Licensing Fee Structure

I'm not sure I'd repeat things you really don't really know to be true...

@RixTrack posted:

It is my understanding that although the DCS is a reliable and convenient operating system, it lacks the sales numbers to be viable in the current environment of the model train market.

Lionel pays a healthy licensing fee for every device that is Bluetooth.  Because Bluetooth is universally available it was a smart move.  

Do you have some kind of inside track of MTH's sales numbers?

Bluetooth licensing is a lot cheaper than you think. Annual fees and qualification testing are a drop in the bucket for companies like Lionel.

I guess I'm in the camp of "who cares?"  Operate what you like and there is room for multiple systems.  Personally, I am excited that a good deal of my trains run on straight DC control.

@H1000 posted:

Do you have some kind of inside track of MTH's sales numbers?

Bluetooth licensing is a lot cheaper than you think. Annual fees and qualification testing are a drop in the bucket for companies like Lionel.

Product offerings dictate sales.  They are no longer a full-line company.  They sold off most of their assets that had value.  Leaving what’s left is a boutique-style business that may have a short life.   It took Sears Roebuck & Co. from 2006 till 2022 to close.  A small niche company like MTH may hang on as long as somebody buys what they make however, if it makes 48 more months I would be surprised.  

@RixTrack posted:

Product offerings dictate sales.  They are no longer a full-line company.  They sold off most of their assets that had value.  Leaving what’s left is a boutique-style business that may have a short life.   It took Sears Roebuck & Co. from 2006 till 2022 to close.  A small niche company like MTH may hang on as long as somebody buys what they make however, if it makes 48 more months I would be surprised.  

Are many of the MTH Premier line products still being produced and now sold by Atlas?

@RixTrack posted:

Product offerings dictate sales.  They are no longer a full-line company.  They sold off most of their assets that had value.  Leaving what’s left is a boutique-style business that may have a short life.   It took Sears Roebuck & Co. from 2006 till 2022 to close.  A small niche company like MTH may hang on as long as somebody buys what they make however, if it makes 48 more months I would be surprised.  

So exactly which assets did they sell? Atlas didn't buy any steam tooling and the list of items sold to Lionel will not be disclosed. They have plenty of tooling available that wasn't sold plus all of their very popular tinplate.  As for actual production numbers you still don't have clue, just a guess with no facts and your speculation. MTH may not be offering 200 pages of product anymore but that's not to say what they do sell are not in high numbers. Obviously it's good enough for them to keep making regular new product announcements.

As for a "small niche company", wouldn't that also describe Atlas, 3rd rail, and Williams by Bachman? They aren't big either but have soldered on over many years with their small niche product lines.

Also, why is MTH not a "full-line company"? They still make engines, rolling stock, transformers, track, accessories and command control system... what's missing?

@H1000 posted:

So exactly which assets did they sell? Atlas didn't buy any steam tooling and the list of items sold to Lionel will not be disclosed. They have plenty of tooling available that wasn't sold plus all of their very popular tinplate.  As for actual production numbers you still don't have clue, just a guess with no facts and your speculation. MTH may not be offering 200 pages of product anymore but that's not to say what they do sell are not in high numbers. Obviously it's good enough for them to keep making regular new product announcements.

As for a "small niche company", wouldn't that also describe Atlas, 3rd rail, and Williams by Bachman? They aren't big either but have soldered on over many years with their small niche product lines.

Also, why is MTH not a "full-line company"? They still make engines, rolling stock, transformers, track, accessories and command control system... what's missing?

MTH (s), all three of them, are not a peer competitor to Lionel. Those days are gone. Let's not kid ourselves.

They do make some nice special runs of rolling stock though and I do look forward to the latest MTH special run announcements in my email. I also think MTH is more user friendly and more flexible than Lionel when it comes to special runs. That is MTH's biggest advantage right now.   I wish there was an easy way to request special runs though.

@H1000 posted:

So exactly which assets did they sell? Atlas didn't buy any steam tooling and the list of items sold to Lionel will not be disclosed. They have plenty of tooling available that wasn't sold plus all of their very popular tinplate.  As for actual production numbers you still don't have clue, just a guess with no facts and your speculation. MTH may not be offering 200 pages of product anymore but that's not to say what they do sell are not in high numbers. Obviously it's good enough for them to keep making regular new product announcements.

As for a "small niche company", wouldn't that also describe Atlas, 3rd rail, and Williams by Bachman? They aren't big either but have soldered on over many years with their small niche product lines.

Also, why is MTH not a "full-line company"? They still make engines, rolling stock, transformers, track, accessories and command control system... what's missing?

The sold the entire rail king locomotive line to Lionel. The sold the entire building series to Lionel.  The sold the premier line to atlas and Lionel.  They are all but gone.  You need to adjust your expectations. MTH is (was) a company not a sports team.  

@RixTrack posted:

The sold the entire rail king locomotive line to Lionel. The sold the entire building series to Lionel.  The sold the premier line to atlas and Lionel.  They are all but gone.  You need to adjust your expectations. MTH is (was) a company not a sports team.  

MTH is delivering Railking RS-1's this week. Clearly Lionel doesn't own all the Railking tooling.

Where did you get this information?  Many statements made by you are false.

Lionel did purchase the MTH Bantam line...not the entire Railking line!

Get in the know before you speak.

@RixTrack posted:

The sold the entire rail king locomotive line to Lionel. The sold the entire building series to Lionel.  The sold the premier line to atlas and Lionel.  They are all but gone.  You need to adjust your expectations. MTH is (was) a company not a sports team.  

Where to start...

It was mentioned earlier on this forum by someone with strong ties to those still running MTH that they have retained 75%+ of their tooling. Pat's trains made a post last year that eluded to this: https://ogrforum.com/...c/156561156055907356  You can also read the annoucement from MTH that specifically states "still leaves approximately 80% of the M.T.H. tooling portfolio in the hands of M.T.H." -- https://mthtrains.com/news/706

Atlas only bought Premier diesel Tooling and not all of it. MTH still retains all Premier Steam Tooling except that of what Lionel purchased which nobody knows exactly which models. MTH announced a run of Premier Mikado locomotives last December.

It was confirmed that Lionel did buy the Bantam line of products. (why? it's even smaller than semi scale and MTH had Imperial models of many of these that were much better)

Lionel bought some building tooling but again not all.

@H1000 posted:

Where to start...

It was mentioned earlier on this forum by someone with strong ties to those still running MTH that they have retained 75%+ of their tooling. Pat's trains made a post last year that eluded to this: https://ogrforum.com/...c/156561156055907356  You can also read the annoucement from MTH that specifically states "still leaves approximately 80% of the M.T.H. tooling portfolio in the hands of M.T.H." -- https://mthtrains.com/news/706

Atlas only bought Premier diesel Tooling and not all of it. MTH still retains all Premier Steam Tooling except that of what Lionel purchased which nobody knows exactly which models. MTH announced a run of Premier Mikado locomotives last December.

It was confirmed that Lionel did buy the Bantam line of products. (why? it's even smaller than semi scale and MTH had Imperial models of many of these that were much better)

Lionel bought some building tooling but again not all.

Great. How does any of this really matter when they cannot get any new customers because they have no DCS systems available?  

I doubt the Bluetooth capability had anything to do with it.  Lionel didn't kill MTH.

I do think LionChief products have made inroads against the Railking starter sets, though.  But that's only my opinion based on what I saw in the hobby store over the past few seasons.  I don't have any verified statistics or sales numbers to back that up.

George

@RixTrack posted:

Great. How does any of this really matter when they cannot get any new customers because they have no DCS systems available?  

As if Lionel has 990 sets or their new Base3 available at present....

@RixTrack posted:

Great. How does any of this really matter when they cannot get any new customers because they have no DCS systems available?  

In case you haven't  noticed there is chip shortage going on right now and has been for the last 20 months. This has put a real damper on new & existing product delivery for everyone in every industry.

Right now on ebay there are far more dcs systems available for purchase at unreasonable prices than Lionel cab2, or cab1l systems for unreasonable prices.

MTH should have the new WTIU out later this year coinciding with Lionel's new Base3.

@G3750 posted:

I doubt the Bluetooth capability had anything to do with it.  Lionel didn't kill MTH.

I do think LionChief products have made inroads against the Railking starter sets, though.  But that's only my opinion based on what I saw in the hobby store over the past few seasons.  I don't have any verified statistics or sales numbers to back that up.

George

Unfortunately I don't think MTH has produced any sets for at least 2-3 years.  MTH had some good values in their sets all DCS equipped too.  You're right though George some of the newer LC stuff, especially 2.0 and 2.0+ have helped Lionel.  MTH starter sets are missed.

@H1000 posted:

In case you haven't  noticed there is chip shortage going on right now and has been for the last 20 months. This has put a real damper on new & existing product delivery for everyone in every industry.

Right now on ebay there are far more dcs systems available for purchase at unreasonable prices than Lionel cab2, or cab1l systems for unreasonable prices.

MTH should have the new WTIU out later this year coinciding with Lionel's new Base3.

The higher number of items for sale in the secondary market as compared to similar items that are scarce usually means  the item that is plentiful is not as sought after as those that are hard-to-find.  It’s basic supply and demand.  

@RixTrack posted:

The higher number of items for sale in the secondary market as compared to similar items that are scarce usually means  the item that is plentiful is not as sought after as those that are hard-to-find.  It’s basic supply and demand.  

I would disagree. The demand for both DCS systems and Legacy CAB2 systems are equally high. Just because Legacy systems are a bit more scarce right now doesn't mean nobody wants a DCS system. People just need to decide how much over MSRP they are willing to pay for a used command system. If you look at sold listings, both systems are selling very well and for high dollar values.

If you put a used DCS or Legacy command system on ebay right now with purchase option of new MSRP, they will be bought up in no time.

Again, Lionel and MTH have both been affected by the global silicon shortage which has delayed new products like the BASE3 and the WTIU. No worries, both companies will have their respective command systems available later this year for anyone to purchase at a reasonable price.

@RixTrack posted:

The sold the entire rail king locomotive line to Lionel. The sold the entire building series to Lionel.  The sold the premier line to atlas and Lionel.  They are all but gone.  You need to adjust your expectations. MTH is (was) a company not a sports team.  

Where do you get your information?  MTH had recently announced several Premier and Railking locomotive and rolling stock products, so clearly they did NOT sell all of these lines to other makers.  Are you just making this up?

@gunrunnerjohn posted:

Where do you get your information?  MTH had recently announced several Premier and Railking locomotive and rolling stock products, so clearly they did NOT sell all of these lines to other makers.  Are you just making this up?

I have apparently received incorrect information from a dealer that feels animosity toward MTH since his business is suffering due to their change in operations.  Animosity within a dealer network is a killer to any brand especially in a niche market like toy trains.

Simple answer: No .  MTH is changed, but not dead by any criteria. Lionel's Bluetooth in LionChief, LC + 2.0 and Legacy locos adds additional functionality without the need for additional purchases (such as Legacy, TMCC) but has nothing to do with what's happening the industry, in my view.

Lionel appears to be doing well, considering their gigantic catalogs and public statements that things are going to their liking.  They've always dominated the set sales market, long before Bluetooth, according to everything I've ever read or heard.

Whatever comes out of MTH's new business model, it will  most likely be a product of market forces overall, including the simple fact that no one wanted to buy the whole business.  What the market will look like in one or two years, much less five or ten, is anyone's guess, and pretty much will have nothing to do with Lionel's Bluetooth and probably not much to do with what MTH does or doesn't do. Given their new more limited production of rolling stock, occasional locos and hopefully, soon, new DCS equipment, MTH does not figure to be a major factor in the market, at least when compared with their previous major presence as a full line train company  from 1995 or so until 2020.  But being a lesser factor in the industry is far from the same as "dead."