Answer: Oil Shortages
When you’ve long since grown up and you return to the things of your childhood, you often find yourself amazed at how small the things are when you recall them being so much larger. Elementary school hallways look tiny, the old tree you used to climb doesn’t look quite so tall, and toys seem small in your hands.
If you grew up playing with toys before the 1970s, there’s one thing that might throw your size-divergent nostalgia off: action figures. Today, it’s standard for action figures to be around 4″ tall; a size that is easily engulfed by an adult’s hand, but still fairly large to the children that play with them. Whether you’re playing with G.I. Joe, the Teenage Mutant Ninja Turtles, Batman, or whatever new toy brand is on the market today, you’ll typically be playing with figures under six inches in height.
Children who grew up in the 1960s playing with G.I. Joe, America’s Movable Fighting Man, however, had a totally different experience. Back then it was standard for action figures to stand a towering 11 1/2″ tall and pack clothing and accessories of equal scale.
When the 1970s Oil Crisis put a sizeable dent in the global oil trade and sent barrels of crude oil skyrocketing in price, it also made it prohibitively expensive to keep cranking out thousands of nearly foot-tall action figures. Japanese toy company Takara was struggling to keep their costs down and opted to release a reduced-size version of their popular Henshin Cyborg-1 line (a toy based on the articulated design of G.I. Joe the company had licensed from Hasbro, but with a cyborg theme).
The reduced size toy, called Microman, was wildly popular—thanks in part to the backstory that claimed the relatively tiny 3.75″ toys were actually 1:1 scale and the “Micromen” were from a planet populated by tiny people. The novelty of the story aside, other toy companies took note of the fact that children seemed entirely unbothered by toys that were around 1/3rd the size of the ones they were used to and quickly began producing smaller action figures.