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For a while, Mego was the No. 6 company among all toy makers. Its 8-inch action figures were so popular that Hasbro tried to compete with them by putting out an 8-inch Super G.I. Joe in 1977.

"" shocked the world on May 31, 1977, becoming an overnight sensation, the highest-grossing movie in history. The public clamored for action figures, which Kenner didn't even have ready to offer until after 1977, instead selling and "Early Bird Certificate Package," that promised the first four action figures—Luke Skywalker, Princess Leia, Chewbacca, and R2-D2—when they were ready in early 1978.

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    Mego made action figures for Muhammad Ali, Broadway , the rock band , "The Wizard of Oz," "Dr. Who," "Dukes of Hazzard," the "Flash Gordon" comics, "Zorro," "Dallas," "Happy Days," and many others. The company was also the first to develop what's known as "blister pack" or "bubble card" packaging. Instead of selling action figures in boxes with plastic windows, in 1976, Mego exclusively shipped cards attached to plastic bubbles holding the action figures.

    Kenner designers initially considered making "Star Wars" action figures 12 inches tall like old G.I. Joes, but that plan was scrapped when they realized that Han Solo's spaceship, the Millennium Falcon, would have to be five feet in diameter. Taking all the giant vehicles and playsets into consideration, Kenner made the standard action figure even smaller, at 3 ¾ inches. In the process of scrambling to get the action figures out, designers scrapped the bendable knees and twisting waists of other action figures.