Joshua Cohen Lionel had a brilliant idea when he promoted the father/son relationship throughout the Lionel catalogs to sell trains. It was an opportunity for the child to be a little bit like an adult and for the adult to relive aspects of their own childhood.
That concept has been lost today. Starter sets may still make up the majority of Lionel's profits, but those sales come from nostalgia: Remember how much you enjoyed Lionel trains as a kid.
Yes, there's a lot more competition today for family discretionary dollars. And there's also the breakdown of the traditional family unit. Then there's the reality that too many parents aren't seeking ways to engage with their kids: They're looking for electronic babysitters so they can do their own thing. Or because they work too much, trying to pay for all the things they think they need, and don't have the time to use.
All this combined with the fact that trains today are obviously being marketed to adults, with a lot less emphasis on "toy" and a lot more emphasis on prototypical realism and expensive features.
Then there's one more factor: Collectability, ie: Money. I've been back in the hobby for some 32 years. I can't count how many times I've heard that I shouldn't be repainting trains as they are all valuable collectibles worth tons of money. Yet, NOT ONE single person who said that to me, was willing to give me $500.00 for an MPC-era 8 inch yellow UP flat car, which according to their logic, was highly collectible. So much for the foolhardy argument that these trains are all priceless collectibles. And happily, I'm still repainting.
I've told this story before. I knew a kid who was always bugging me to buy him video games. I told him "I take you to the arcade, and you play video games at your friends, so you get enough of that. I'll buy you a train set instead."
His reaction was "That's old fashioned." I told him "I'm not getting it for me. I'm getting it for you. And I'm not going to just hand it to you... you're going to build it and I'll show you." All of a sudden, I could see he was thinking...
"You mean I would get to use power tools?" was his reaction to that. "Sure. Your mother isn't going to show you." So he did a 180 and got totally into it. He did everything, and I helped him. Too often, adults in attempting to "teach" kids, end up doing it all for them. You gotta let kids be kids and make mistakes and learn from them.
I let the kid design the track plan, and as we were finishing it, he said "You know, this isn't complicated enough." I was thrilled. He was thinking it through. And learning as we went along. We then redid the layout and made it more complex, utilizing his ideas with my guidance.
So I profoundly disagree with the above sentiment that you build a layout for yourself and hope the kids get into it. You build a layout with, and for the kids... it's THEIR layout. IF, they don't get into, now you have a layout. But if they think it's your layout instead of their layout, chances are real good that they won't get into it.
And you have to let them play with it. Kids who hear statements like "Careful, that's really expensive" or "Don't touch that" or "That's not prototypical operation... you don't run trains like that" are NOT going to develop any interest in the hobby. Now, I'm not advocating carelessness or not taking care of what was always an expensive toy. But when I was a kid, the trains were mine, bought for me by my dad. They WEREN"T for my dad, who then sometimes allowed me to play with them, as long as I did it correctly. Had that been the case, I never would have gotten into trains.
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Final thought: Many folks here can find fault with nearly everything Lionel does. Now, there are times when that is justified. But in my thinking, the biggest mistake Lionel has made in recent years, is the dropping of the "Ready-To-Run" catalogs in favor of the "Big Book" approach. Before the Ready-To-Run catalogs - and I personally heard this many times - the reaction of novices and young parents to the catalog was "These aren't toys for kids. These are for doctors and lawyers."
I'd then have to point out the pages in the catalog where the starter products were. And those starter products were there. BUT first impressions are important. And I guess Lionel hasn't learned that lesson, because the catalogs start off with all the high-end expensive built-to-order stuff, followed way in the back by the trains that are going to keep them in business for the long-term. The starter products should always be right up front on the first pages in the catalog. The adults who are looking for high end products will persevere, turn the pages and find what they are looking for.