With U.S. Sales Slumping, Toy Makers Look Abroad

With an uncertain Christmas season under way, toy company executives said Wednesday that they are looking for more business opportunities overseas to offset the sluggish U.S. retail market.

“The outlook in international markets is brighter,” John W. Amerman, chief executive of El Segundo-based Mattel Inc., said at a toy industry conference sponsored by the investment firm Bear, Stearns & Co.

Executives generally agreed that their industry will feel pressure from the sagging U.S. economy during the holiday season although strong products should continue to sell well. Toy sales have slipped along with sales of other merchandise as consumers, uncertain about the economy and the Middle East, curtailed their spending in recent months.

“It’s really a mixed question,” said Alan Hassenfeld, chief executive of Hasbro Inc.

While Pawtucket, R.I.-based Hasbro expects a healthy performance from its Cabbage Patch dolls and Milton Bradley board games, “it might not be a buoyant Christmas season,” Hassenfeld said.

Overall, the U.S. toy industry has seen slow growth in recent years, rising from a $12.4-billion market in 1986 to $13.4 billion last year, according to estimates from the Toy Manufacturers of America, a trade group.

This year, the figure is expected to climb to $14 billion.

Those totals do not include video games, which were hot-selling items during the 1980s. Nintendo of America Inc. projects that the company and its licensees will sell about $4 billion worth of video game products this year.

But even Nintendo, which dominates the U.S. video game market, expects to see a drop in sales of its hardware systems this year. The company does project strong growth in its software game cartridges.

“Rumors of our demise continue to be premature,” Peter T. Main, vice president of marketing for Nintendo, said in prepared remarks at the conference.

Main said that as the market for his company’s products matures, “software will continue to be the critical ingredient.”

Hassenfeld said a maturing video game market is a positive sign for makers of board games, such as Milton Bradley.

Another encouraging trend is the growth in international sales, he said. Hasbro, which does about one-third of its business abroad, expects international sales to increase by more than 30% this year.