1987 was the converse side of the major turning point of Transformers: the Movie. The Transformers changed their look almost completely, eschewing realistic replicas of sportscars and fighter jets in favor of futuristic visions of military technology. The shift was predicated on Transformers using their natural alternate forms instead of disguising as Earthen machines.
The organization of the toys on retailer shelves began to adhere more to “subgroups,” a concept which had existed previously but was less important. Each subgroup centered around a common design feature or gimmick, and generally adhered to a similar size and price point. This largely meant that there weren't just “Transformers”, but now there were Headmasters, Throttlebots, Horrorcons, and Targetmasters. It was a change that was (and is) exciting to some, but a let-down to others.
With the cancellation of the US cartoon, Japan's Transformers took a sharp turn away from the Hasbro markets. Takara branded their 1987 series as Headmasters, and marketed them alongside a brand-new Japanese-produced anime of the same name. The anime featured many of the same characters seen in Hasbro's markets, but also heralded the advent of Japan-only transformers, filling the gaps in the storytelling where it diverged from the western market. These unique footnotes to the toyline would eventually become some of the most valuable and desired Transformers toys.
The Tranformers were now split between east and west, and hurtling down different paths than that which they set out on. Unfortunately, it would lead to a decline in popularity over the remainder of the decade.