Before Mego jumped into the realm of action figures, the company, founded in the early 1950s by Dr. David Abrams, was the faceless manufacturer of cheap rack toys sold in five-and-dimes across the U.S. These toys were made in Hong Kong and sold for less than a dollar.

Everything changed in 1971, when David's energetic 28-year-old son Martin B. Abrams, a recent marketing graduate from NYU, took over the company as president. The younger Abrams had the idea to invest in the exclusive rights to characters from beloved films, comic books, and TV shows.

Inspired by Hasbro's success with its G.I. Joe action figures, Abrams turned Mego into what many called "The World's Greatest Action Figure Company," as he set about paying royalties and acquiring rights to nearly every popular icon of the decade. He took the company from No. 300 to No. 6 among all toy companies by the end of the decade.

Before Abrams came along, most toy companies feared licensing deals, as it was a risky business—rights were costly and products often failed. Abrams seemed to have a sixth sense about what action figures would sell. He was known to hang out in toy stores and ask children who their favorite heroes and celebrities were.

Another secret to Mego's success: In 1974, the company patented an 8-inch jointed plastic body, with completely interchangable parts, which was cheaper to make the than 12-inch G.I. Joe figures and also more compatible with interactive play sets. Since the trademark Mego bodies could be made into any number of characters, the company faced much less risk with its licensing agreements.

A failed character could be made into another action figure, simply by changing the head and the outfit. Mego was often forced to abandon a character on a short notice. For this reason, it's difficult for collectors to keep track of what products were actually made, and rumors often circulate about this and that rare Mego character being spotted.

For example, Mego had mass-produced a line of toys, ready for Christmas, to go with the "Planet of the Apes" TV series. When the TV show bombed, Mego just altered the unshipped inventory into other characters, saving the company from a financial crisis...

Abrams was also quite the showman, who understood that the toy business was show business. He dazzled buyers at the annual Toy Industry Association trade fair held every February in New York City with his elaborate, theatrical action-figure introductions. All his competitors could do was grumble.

In 1975, he captured the media's attention, too, by hosting a celebrity-filled launch party for the "Wizard of Oz" action figure and play set line at the Grand Ballroom of New York's Waldorf-Astoria Hotel. Every surviving star of the MGM movie, including "Tin Man" Jack Haley and "Scarecrow" Ray Bolger, made an appearance and signed autographs for more than 1,000 movers and shakers in the retail industry. The party cost Mego a hefty sum, but it paid off—star-struck buyers turned the line into an overnight hit.

Perhaps, though, Martin Abrams' biggest legacy was the "World's Greatest Super Heroes" line. He acquired the rights to both DC and Marvel Comics characters, and introduced four action figures—Superman, Batman, Captain America, and Spider-Man—in 1972. By 1977, Mego had produced more than 30 different superhero characters. Mego was also the first to buck conventional wisdom and make action figures of female superheroes and villains.

The company kept kids interested in the line by offering new superheroes each year, and also rotating other characters out of their store deliveries. This way, parents and their children would visit stores repeatedly, and if the desired superhero wasn't available, the adults would often buy their kid another character, rather than nothing.

Early on, Mego attempted to offer low-cost alternatives to G.I. Joe, including the 12-inch Fighting Yank soldier and civilian Richie, as well as 1972's Action Jackson. But every sort of character that could capture a child's imagination was explored, including real-life American West heroes like Wild Bill Hickok to hang-gliding daredevils. Mego offered robots, dinosaurs, cavemen, pirates, World War II heroes, Knights of the Round Table, and famous monsters, like Frankenstein and mummies.

Its first celebrity action figure was Broadway Joe Namath, the New York Jets hero of the 1969 Super Bowl, made between 1971 and 1972. Muhammad Ali had his own Mego figure, as did West German soccer player Franz Beckenbaur, which was only sold in Germany.

Mego also produced action figures for characters from "Dallas," "CHiPs," "Dr. Who," "Dukes of Hazzard," the "Flash Gordon" comics, "Zorro," "Happy Days," Laverne and Shirley," "Love Boat," "Our Gang," "Starsky & Hutch," and "The Waltons." It even put out figurines of the theatrical glam band Kiss in full makeup.

Many Mego action figures were based on popular primetime TV shows, and so the company poured millions of dollars into television commercials—something toy companies had never done before. These ads, which played during peak children viewing hours, were similar to Hollywood movies with distinct character voices, film music and footage, and special effects. They usually ended on a cliff-hanger that children could resolve in their own play.

In the '70s and '80s, the company also made non-action figure related toys like board games, the best-selling talking educational robot, 2-XL, handheld video games, child cosmetics, miniature vehicles, construction sets, stuffed animals, science kits, costume jewelry, educational toys, baby dolls, car racing sets, and bicycle accessories, as well as toys for infants and preschoolers.

However, Mego made one fatal mistake. In 1977, the company was offered the rights to a 20th Century Fox "space opera" by little-known director George Lucas, to be called "Star Wars." Mego, like many in the industry, believed science-fiction was a dead genre, and rejected Fox's offer.

Instead, another toy company, Kenner, accepted the rights, and in May of that year, "Star Wars" floored Hollywood with its blockbuster success, becoming the highest-grossing movie of all time. It made retailers more than a billion dollars through merchandising sales of clothing, books, video games, and toys. Kenner's wildly popular 3 ¾-inch "Star Wars" action figures blew Mego out of the water.

Mego never recovered from that "Star Wars" bomb. It tried to latch on the late '70s sci-fi bandwagon, buying the rights to "Star Trek: The Motion Picture," "The Black Hole," "Moonraker," and "Buck Rogers in the 25th Century"—but all were merchandising failures.

Starting in 1980, the company had to starting selling off its U.S. and foreign assets and began to layoff its employees. The staff went from a late-'70s high of 2,000 to less than 30 by 1983. In June of 1982, the company filed for Chapter 11 bankruptcy protection, and so ended its action-figure era.

A Mego action figure, of course, is most valuable when in "mint" or "mint-in-box" condition, meaning it is unplayed with and still has all of its accessories and stickers. Characters found out of the box are marked with "Mego" and the company's patent on their backs between their shoulder blades. The back of the figure's head may also be marked "Mego," or with the copyright holder's trademark, such as "© DC Comics 1977."

At first, Mego action figures came in solid boxes featuring a colorful drawing of the character on the front and back. Under pressure from retailers, Mego added a clear plastic window to its boxes so parents and kids could see the action figure inside, which kept them from opening the boxes in the store.

Thanks to a store called Kresge—now known as Kmart— in 1973, Mego developed a new kind of packaging, a blister pack, the forerunner to what became known as the "Mego bubble card." At first, these packages, which featured the action figure inside a plastic bubble attached to a piece of printed cardboard, were designed exclusively to be sold at Kresge, which insisted the toys work for peg displays. By 1976, all Mego action figures were packaged in this manner.

The company also sold its most popular U.S. action figures throughout Europe, and these were distributed and licensed by European toy companies, usually with different packaging and artwork from their American versions. At the request of foreign customers, Mego also made exclusive action figures to be sold only in those countries, based on comic, TV, and movie characters popular there. These are very difficult to find.

Collectors are also eager to find the mini product catalogs that came in the packaging of '70s play sets, as well as the dealer product catalogs, often the only source for identifying rare Mego toys. Foreign dealer catalogs, as well as the cardboard box displays sent to retailers for free, are next to impossible to find now.

Since Mego’s standard action figures are relatively easy to manipulate, fans and sculptors have taken to altering and “customizing” 8-inch action figures for fun—particularly for their favorite characters that Mego never made. While most of these are made for personal enjoyment, beware of scam artists trying to sell these toys as "rare" Mego products.

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