I have been an owner, operator and now collector of Gilbert S scale trains since I was 2 years old. Obviously a choice made by my dad.
We need to start prewar to understand the outcome. The American Flyer line of trains was always well behind Lionel in sales and popularity. W O Coleman sold American Flyer to A C Gilbert in time for the Christmas of 1938 offerings to include some new models. While still three rail all Gilbert's new tooling was to 3/16" scale. In 1946 Gilbert made the change to two rail 3/16" scale track as a way to avoid competing head to head with Lionel.
So why did the sales stay a distant runner up to Lionel? Lionel had more manufacturing capacity, was better capitalized at that time, had a bigger sales network, more retail outlets and shelf space and a bigger advertising and promotion budget. Plus Lionel was starting with a 40 year history as a quality toy train manufacturer.
The Gilbert products were great, relatively accurate, appeared more scale than toy-like and ran well. From a parent or gift givers point of view, Lionel was a no risk gift, Gilbert required some explaining in the early post war years. Gilbert simplified the transformer, by having only three terminals, a base post, a 7 to 15 volt post and a 15 volt post. All equipment was redesigned to operate from those posts. From there it became way more complicated. With Lionel a child could put together track in any configuration, attach one clip and two wires, then play. Turnouts-no problem, put them in and they were powered from the track. No issue with shorts from reverse loops.
American flyer was much more complex. An oval of track took only one clip. Turnouts had to be wired separately. For an action car the pickup wheels may have had to be reversed in the truck depending on how it was set on the track. The turnouts could be power routing, fiber pins might be needed and adding extra track clips almost always defeated the power routing feature without the fiber pins. The child would have had to be a future engineering student, like I was, to really want to understand all this and like making it work. Then there was the reverse loop issue. My friends would always lay out the track with one, fortunately the transformers had circuit breakers.
Then there was the space requirement. Postwar Lionel took either a 27" or 31" wide space plus length for straight track. American Flyer was a 40" minimum wide space and an oval with only one straight track was 50"wide; it would not fit on a standard sheet of 4'x8' plywood! American Flyer was clearly more of a niche product than Lionel, but one I continue to enjoy to this day.
