If AF had a good handhold in the HO market, why did they give it up..??
Well, just prior to WWII Flyer, under A.C.Gilbert, had begun producing trains in S and HO gauge, after decades in O. But shortages of war-essential materials soon stopped all production. With the reappearance of toy trains in 1946, Flyer returned strongly to its production of S gauge.
S scale, being cheaper to make, easier to fit into a given space and more scale in appearance, Flyer apparently thought it might be able to significantly divert the market and lead folks away from the bigger, less accurate, more expense, Lionel O gauge trains. At the same time, trains were considered toys and meant for kids, which made HO simply a sideshow that few actually thought might grow into a really profitable market. Back then, adult HO hobbyists numbered only around 15k-20k, whereas kids were counted in the millions.
Flyer did produce HO throughout the 1950's but pretty much always the same line and on a limited basis. Their HO steam engine roster never went beyond the original Hudson (always NYC) and later an 0-6-0 swticher (always PRR). In the late 1950's they added a couple of diesels but emphasis was always far more toward the cleverly animated S gauge trains and accessories.
By the late 1950's, when HO was really taking off as an adult hobby, with over 100,000 members, Flyer was already failing financially and other manufacturers were offering a diversity of equal or better quality HO engines that were also RTR, for about the same price as Flyer's and in a wide range of road names and styles. Flyer had missed the boat (just as did Lionel - in its case, both in OO and then HO!).
CNJ999