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Real reason.
These are made for third-world countries (Brazil, India, etc). Kids in those regions prefer large toy above anything else. The reason for the rectangular boxes is even because toys are sold out of wagons and carts in these countries, and the rectangular boxes are easier to stack in large numbers. The bad paint, sculpt, and articulation is to keep the price down for these regions. And, yes, these do sell high volumes due to the number of kids in these countries. And yes, families do buy toys, and not all families live in huts.