Gaps in the market after mth’s departure

I started getting the MTH daily news updates again. What’s with that. I’m hoping it’s a good sign.

@GHD posted:

I started getting the MTH daily news updates again. What’s with that. I’m hoping it’s a good sign.

I hope so. I’m fairly new to 3rail and always thought I would go mostly mth for my layout.

The "gap" of TRAINS to buy will probably be filled by other existing manufacturers that are always looking to "find a need and fill it." The other "gaps" are REPAIR SERVICE and PARTS. Many MTH dealers now fill that gap, although it's probably a "loss leader" within their business. Perhaps there's a business opportunity for "MTH TRAINWORX" as a national center ... or regional centers.

Mike Mottler
Owner of only one MTH train and worried about its future

It’s funny how this thread showed up after someone on another thread said there are road names and locomotives that were made by  MTH that will NEVER ( his emphasis) by Lionel. Hmm...

One has to wonder if there's really a gap at all.

If there was truly a gap in supply, wouldn't someone have purchased MTH's 3-rail inventory, tooling, etc.?  After running only Lionel and WBB conventional and TMCC for 15 years, I made the decision to add DCS to my in-progress layout 2-3 years ago. I love the Rail King Imperial offerings, have already bought 6 engines, and was planning to slowly replace my old TMCC with PS3 Rail Kings. Nice timing.

Now, I have to wonder if there simply weren't enough of us consumers to keep MTH in business making engines and rolling stock.

I've seen Industrial Rail, K-Line, and Weaver exit 3-rail since I joined the hobby in 2002. One could argue Williams is effectively gone as WBB's offerings pale in comparison to Williams from 10-15 years ago. Sure, MTH was probably bigger than all those combined, so that's the biggest drop in supply our hobby has seen, but maybe that's just supply further contracting to match contracting demand?

I want to state I'm sure dealers here would know better than me, I'm just speculating based on my own habits.

With all the product on the secondary market and, sadly, an aging group of hobbyists, I think there will be a glut of basic, good-enough chassis on the market for a long-time. Lots of PW, MPC, TMCC 1.0, and PS1 and PS2 engines are available that can serve most of us for the rest of our lives provided enough "guts" and spare parts are available to upgrade. I think entry-level sets and high-end, $2,000 engines with new gadgets and features will be the wave of the future. Here's why:

I have an early Lionel TMCC semi-scale Pennsy K4 with TMCC 1.0 just like the one in the 2021 catalog. I could upgrade my current one for about $250 to get most of what a new LC+2 would get me. Just yesterday, I bought a Williams Berk from a fellow forum member that he upgraded with TAS EOB and turbo smoke for half the MSRP of a new Lionel LC+ 2.0 Berk. My gain from him abandoning semi-scale for full scale.

Aging hobby, many with all they need, and competition from the used market.....all factors that may be leading to a major contraction in supply of new product.

If there is a market, someone will eventually fill it.  One advance is that short runs of 25-50 locos or 100-200 freight cars are now economically feasible due to improved technology.

That said, I suspect that,  except for Lionel,  sets, roadbed track, innovative control systems, etc. are a thing of the past.  My guess is what you've seen from MTH in the last six months is what you will see in the future.  Even if the rights to use some tooling and the MTH brand name remain, special runs are what you are going to get.  Not a train company per se.

Presold limited runs from certain dealers will be offered,  instead of from MTH, which likely will exist in the future only as a brand name. No catalogs, no RealTrax, no TIUs, no Z4000s or Z1000s after this year, at best.

If we are lucky, PS3 boards, locomotive parts and similar replacements will be available for a few more years. After that, we're likely using orphaned or used equipment.

I don't see a viable train company in the future, given that we are a few months from Mike's retirement and no formal announcements of successor companies of any sort have been made.  For MTH as people knew it, it's over. The brand name may live on, and some special runs made, but otherwise, just a shadow of the past.

@Landsteiner posted:

If there is a market, someone will eventually fill it.  One advance is that short runs of 25-50 locos or 100-200 freight cars are now economically feasible due to improved technology.

That said, I suspect except for Lionel,  sets, roadbed track, innovative control systems, etc. are a thing of the past.  My guess is what you've seen from MTH in the last six months is what you will see in the future even if the rights to use some tooling and the MTH brand name remain is what you are going to get.

Presold limited runs from certain dealers instead of from MTH, which likely will exist only as a brand name. No catalogs, no RealTrax, no TIUs, no Z4000s or Z1000s after this year, at best.

If you are lucky, PS3 boards, locomotive parts and similar replacements will be available for a few more years. After that, you're using orphaned or used equipment.

I don't see a viable train company in the future, given that we are a few months from Mike's retirement and no formal announcements of successor companies of any sort have been made.  For MTH as people loved it, it's over. The brand name may live on, and some special runs made, but otherwise, just a shadow of the past.

Yes, I think you have made some astute points here:

- "sets, roadbed track, innovative control systems, etc. are a thing of the past."  Agree. So what happens to MTH's Real Tracks? I assume that it will no longer be made and will only be available on the secondary market

- "For MTH as people loved it, it's over." Its a credit to Mike Wolf that he was able to build a brand that has captivated the emotions of many hobbyists. But, it.is.over.  What I find fascinating as this plays out how powerful is the emotional denial of MTH's final run such that some people don't even believe Mike Wolf when he says its over.  I think we will be dealing with rumors of secret investors resurrecting MTH for along time.

@Csxcellent posted:

Hopefully the orange and blue crew can fill the gap, or someone will step forward to produce these products. What do you think the biggest gap will be after MTH’s departure?

Streamlined 18" passenger cars.

@Landsteiner posted:

I don't see a viable train company in the future, given that we are a few months from Mike's retirement and no formal announcements of successor companies of any sort have been made.  For MTH as people knew it, it's over. The brand name may live on, and some special runs made, but otherwise, just a shadow of the past.

It ain't over, til its over. Who knows, maybe Mike Wolf is taking one out of Paul Stanleys playbook.

In all seriousness No one knew Lionel would have a staff turnover of (at least) three of their key players, it just happened. The potential end of the company, no, but something happened there.

Theoretically , the "investment company" that owns Lionel could purchase Mth. The name could stay the same just Like it has with Lionel for 100years

I always liked how MTH put out models of some of the more unusual trains.  Aerotrain, GM Train of Tomorrow, Turbo Train.  It would be unfortunate if we never see those again.

MTH also had a lot of great buildings, bridges, etc that you see on so many layouts.  The animated car wash, gas station, diner.  The lighted bridges.  The pedestrian truss walkway bridges.  On and on.

@RickO posted:

In all seriousness No one knew Lionel would have a staff turnover of (at least) three of their key players, it just happened. The potential end of the company, no, but something happened there.

What are you referring to?  Is this something that happened recently?

@MikeH posted:

What are you referring to?  Is this something that happened recently?

Not recently persay. If I recall correctly, between 2017 and 2018. When I said "it just happened" I was implying there was no indication beforehand that it would.

I was referring to the departures of Mike R. Jon Z. and Rudy T.

@RickO posted:

I was referring to the departures of Mike R. Jon Z. and Rudy T.

Gotcha.  Thanks.

The good news for me is that the handful of Railking MTH trains I have will also run conventionally. I never ran full DCS anyway, but used the simpler systems. If all that breaks, at least I can run the locos, in theory, off conventional modern Lionel transformers.

What will suffer is the four sets of subways I have. They rely on the MTH transformer, not exactly the most robustly made piece of equipment. I probably should pick up an extra controller to have in reserve.

I've heard the message. From now on, anything I buy will probably be Lionchief starter sets, which I enjoy, and LC+-- some good value there. I'm not investing in any more loco stock from MTH. Their passenger cars are still great and I may pick those up.

I always loved Railking. The passenger train sounds were wonderful. I'll miss that. But I'm happy with Lionel's Lionchief products, and there's always Post War!

I think unique engines/rolling stock will be the biggest gap left. Stuff like the Aerotrain and Triplex. MTH made some unique stuff and Lionel just does not seem interested in it for whatever reason. Lionel has done some interesting rolling stock lately but no scale test cars or bobber cabooses, for example. And definitely no unique roadnames like MTH has.

I will say that I think a holding company/investors will swoop in and buy the company in time. They just don't want to pay market price. I have literally no proof or experience to back this up. It's just my opinion.

I agree O-scale is going to lose a lot of unique premier models. It will be a shame. However, I see 3RD rail taking some of that market with diesels being few hundred dollars more than MTHs. 3rd rails models are over the top in terms of detail and scale proportions. Although a lionel legacy DL-109 would be on my wish list!

If Lionel buys it get ready for major price increases plus a decline in quality. I don't see Lionel buying it but stranger things have happened.

I think MTH is a done deal.  The show is about to be over and the curtain is going to come down in two months.  There may be an encoure every once in a while, as Mike does his limited run thing, but MTH as we all have known it  will be no more.  I really don't believe some investment company will swoop in at the last minute and buy the MTH brand at some bargain price.  Remember Mike will need the brand name for his periodic special product offerings.  

With the above being said, perhaps Williams by Bachman, Lionel, and/or Atlas O will begin producing some of the obscure road names ( as MTH did ) and offer these road names to the train buying pubic.  MTH had the vision to do this beginning many years ago and continuing through their latest catalogue ... and it was a genius part of their business strategy IMHO.  MTH's disappearance will obviously leave a void/gap in the obscure road name dimension of the O gauge market and filling the gap, on the part of an existing company, will require no new tooling.  WbB 70 and 44 tonners were/are a big hit and there are lots of road names ( obscure and larger roads alike ) yet to be had just on those two locomotives ... not to mention other type locomotives plus rolling stock and buildings.  

I deeply believe the exit by MTH presents an opening for creative gap filling opportunity.  I can't help to think that the creative talent in the remaining O gauge companies are not letting go unnoticed the holes/gaps  in the market which are being created by the closing of MTH.   Where there is demand/need creativity steps in.   Also keep in mind the over 12 million visits recently(  in one month )  made to the OGR Online Forum, as shared by Allan Arnold.   There is still LOTS of interest in the O gauge segment of this hobby.   O gauge is not  going to die or go on life support with the exit of MTH.  O gauge is only changing.  The only constant in life is change as we all well know.   Everyone thought that O gauge was done in 1969 when Lionel left a huge " gap" but we all know the rest of that story... LOL!!    

Paint jobs for new roadnames are one thing, that would be easy for other manufacturers to pick up on.  However, unless someone is stepping up and acquiring the tooling for many of the unique MTH entries, there won't be any of the other great MTH models available.

I see an issue possibly developing after Microsoft "upgrades" Windows and issues V11 & beyond.  Who will make any necessary upgrades to the Loader program?

The big loss that I see is for the early to mid level modeler. Railking is a bargain line with similar to cheaper prices than lionchief plus and models that are far more detailed. ES44s and sd70s that don’t require large curves are another loss. One thing I can see Lionel doing is creating new/buying mth’s tooling for a good semi scale es44/sd70ace. They could add this to the lionmaster line. The current tier 4 loco in their starter sets are significantly shorter and vastly undetailed.

@Csxcellent posted:

The big loss that I see is for the early to mid level modeler. Railking is a bargain line with similar to cheaper prices than lionchief plus and models that are far more detailed.

That's exactly why, after 15 years of anything-but-DCS, I opened up to Rail King. The variety and detail offered by Lionel just doesn't compare. When's the last time Lionel offered a Lionmaster steam engine other than an articulated giant, 2006? Speed control and 4 chuffs seem standard for all Rail King engines, but hard to find among Lionel's equivalents.

Lionel has the best and second-best tooling available for semi-scale Hudsons in its Lionmaster and the K-Line it acquired, but didn't go with either on the LC+ Hudsons. Here's hoping they use one of those with LC+2.0.

Sooner or later we will all have to face the reality and consequences of a market that is shrinking on a daily basis.

@aussteve posted:

Sooner or later we will all have to face the reality and consequences of a market that is shrinking on a daily basis.

That is correct. The majority of profile pics on this site are of folks over 50. With that said, I do see more young guys (like myself) than I expected. I thought sports cards were going the day of the dodo birds until the last year or so. That market is nuts right now. So, one cultural shift of some sort could turn this reality on its head.

Csxcellent I hope you are right.  If the average age was 50 that would be a very bright future.  Unfortunately the average age for 3 rail-O scale-Lionel-MTH- etc is closer to the low 70s.  Going to York the last 30 yrs you can easily see the huge rise in the age demographic and the corresponding huge drop in attendance.  Many other train shows have reduced the number of shows or stopped altogether.

The number of new and younger entrants into the hobby is terrific and hopefully will increase.

@aussteve posted:

Csxcellent I hope you are right.  If the average age was 50 that would be a very bright future.  Unfortunately the average age for 3 rail-O scale-Lionel-MTH- etc is closer to the low 70s.  Going to York the last 30 yrs you can easily see the huge rise in the age demographic and the corresponding huge drop in attendance.  Many other train shows have reduced the number of shows or stopped altogether.

The number of new and younger entrants into the hobby is terrific and hopefully will increase.

I know it’s an old demographic, even for more popular scales (n&ho). I was at the Maryland fairgrounds train show 2 or 3 years ago, and my dad (in his early 60s) said he felt really young at the show. Since Millennials are starting to get a tad older, and have careers families etc., maybe we’ll pick up the slack a tiny bit. Furthermore, within the last year there has been somewhat of an exodus from metro areas into the suburbs, which would provide space for a layout. In order for it to actually take off with a younger demo, something drastic would have to happen to make it “cool.” Lionel could definitely market their starter sets better, which would help. Plus, with WiFi on all locos, the trains are more accessible and have a slightly modern flair. Since I don’t have legacy, I look forward to running my pre ordered sd70 with my tablet/phone.

Gauging demographics by train show attendees may well be inaccurate.  I remember when I was into trains with a gaggle of kids there just was no the time to run to shows.  The young ones activities were very time consuming for an involved RR parent.  In over ten years I only made two shows.  Had a railroad but very little non family time.

I do think that with MTH you get more bang for your buck and it will be a shame if nobody buys their toolings.

@Csxcellent posted:

I know it’s an old demographic, even for more popular scales (n&ho). I was at the Maryland fairgrounds train show 2 or 3 years ago, and my dad (in his early 60s) said he felt really young at the show. Since Millennials are starting to get a tad older, and have careers families etc., maybe we’ll pick up the slack a tiny bit. Furthermore, within the last year there has been somewhat of an exodus from metro areas into the suburbs, which would provide space for a layout. In order for it to actually take off with a younger demo, something drastic would have to happen to make it “cool.” Lionel could definitely market their starter sets better, which would help. Plus, with WiFi on all locos, the trains are more accessible and have a slightly modern flair. Since I don’t have legacy, I look forward to running my pre ordered sd70 with my tablet/phone.

Here's one big issue:  trains are not really as relevant to today's youth as they were in the golden post-war thru late 70's.

Kids like to model what they see, or what has some tangential aspect to their lives.   There's a reason why the r/c car hobby has grown and remains growing over the past ten years.   We're not talking about your Walmart $49 put a couple batteries in it.   We're talking about car and/or truck you build from the kit, that have a general starting entry price of around $350 (after you get a basic control system).   Very similar to O gauge Starter sets.

Those hobby shops, at least around here, that cater to this segment of the hobby world are doing very well, even during covid times.     Indoor and outdoor tracks provide places for the street car or off-road cars to race.  Different classes from the standard electric to the gas powered.

Some say, "it's too bad the kids aren't into trains rather than this..."    To which I say is wonderful they're into something like r/c.   They are totally hands on, building their cars, learning how to modify them for best performance, and learning paint techniques for the lexan body shells.    If you ever walk into a true r/c hobby shop, the amount of "aftermarket" parts rivasl what you find in a Jeg's or Summit Racing catalog.

Circling back to trains:   My now 26 year old daughter was into trains when she was very young, as that's why dad was into.   She loved helping build her section of a layout, and could run TMCC with the best of us

As she got a bit older, she discovered robotic type things such as the Rock n Bok system, or the awesome K'Nex kits.    In the world where advanced technology is the standard, this was a natural progression.

16 years later, she will grab a control (Legacy or DCS) when she visits me to play trains for a bit.

Lionel is on the right track (no pun) with these new advanced control item such as the LCS system.  Kids these days are building control systems with Arduino, as an example, as that is what is relevant to them these days.

@aussteve posted:

The number of new and younger entrants into the hobby is terrific and hopefully will increase.

We have to do a little recruiting. On Saturday, I took my 26 y/o daughter and her fiance over to a fellow forum member's house to see an AMAZING layout. As my user ID indicates, getting a male added to the family is exciting!

I was fearful my lame, in-progress basement layout wouldn't get my future son-in-law interested, and it was so nice that a fellow hobbyist entertained us (with masks of course).  They were both WOWED, and I think not only my son-in-law but also his father, about 65, are both going to get into it. I'm setting aside a couple older engines and some track to give them, rather than sell, starting this Christmas.

Has Mike announced when his last day of work will be?

It seems to me that the biggest gap in the market will be the powered subway car sets.  Lionel hardly ever makes them.

John

Inasmuch has he has recently announced politically-themed items, and given the lead time between announcement & delivery, I suspect both he and MTH (or equivalent) will be around for some time.  Supposedly the only hard deadline is when MTH must be out of their expensive building in Columbia.  Warehouse & office space is much cheaper in East Podunk

I run MTH Railking Passenger cars with my Lionel Legacy Steam Engines because the Lionel passenger cars are way expensive.

@Craftech posted:

It seems to me that the biggest gap in the market will be the powered subway car sets.  Lionel hardly ever makes them.

John

That's what I'll miss. I thought about buying one last set, but I don't think I will. I've got several sets to nurse along and hope will keep going.

@EscapeRocks posted:

Here's one big issue:  trains are not really as relevant to today's youth as they were in the golden post-war thru late 70's.

This is why I think we need to decrease the emphasis on getting kids involved and concentrate on those "older" folks looking for a hobby to fill their time as they become empty nesters or enter into retirement.

I work with youth 2-3 times a week as a member of Civil Air Patrol.  These young cadets (12 and up) are interested in drones (UAS, R/C cars and boats) that they can control and mostly compete with others.  I really see excitement in them as they build rockets and successfully launch them.  Crashing these things is part of their learning experience, something I'm not sure all of us are willing to do with our trains.

We need to target those folks who are slowing down (like me) and looking for a hobby.  Building layouts, learning new skills, and repairing equipment keeps the mind active.  As we learn more about aging, this should be a good selling point.

By the way, I'm going to miss the true scale A5 MTH made (K-Line/Lionel are too large).  These little engines must be very popular since I can't find any to buy.

@Csxcellent posted:

MTH provided competition to Lionel, and often had somewhat lower prices, some products, and pavements of the hobby lines are left without a producer. Here are the gaps that I see:

• Imperial six axle diesels
• Railking scale low detail/lower price diesels (especially the switchers)
• Railking imperial steam (larger and more detailed than Lionel)
• o42 premier six axle diesels
• smaller semi scale detailed passenger cars

Hopefully the orange and blue crew can fill the gap, or someone will step forward to produce these products. What do you think the biggest gap will be after MTH’s departure?

One I'd add to this is the scale-wheel offerings that are 3-rail operable as well as the hi-rail offerings that are 2-rail operable. Hopefully, the Proto-3/DCS side of the house will continue as it offered DCC capability (the Rail King Proto-3 units can also operate under DCC by removing a jumper). You can modify 2-rail engines to go both ways if you can install a pickup roller, a little wire and a DPDT switch.

I agree with David and others above. I’m 36 and have a couple layouts. I’ve only ever been to one train show (Amherst) and am not a member of any clubs. My layout accessories and the sounds/visuals are controlled by my RaspberryPi with Python programs I wrote myself.

I have quite a few friends that are into O gauge who are under 40 as well. We prefer more modern aspects and aren’t interested in the traditional parts of enjoying the hobby. The hobby is just fine, us younger folks are here, just not going to the shows.

With all that said, I’ll miss the more “unusual” models MTH built. The turbo train, aero train, and others like them are cool to have access to. I’ll miss their offerings, but I am confident someone will bring new offerings to the table eventually.

Perhaps one reason for the end of MTH as we know it is not the perceived shrinking of the hobby, but the writing on the wall regarding 3-D printed model trains, and shareware model designs. Some day, anyone will be able to 3-D print virtually any train item; it is just a question of how far off that future is.

David