Mattel Looks to Harry Potter to Charm Holiday 2001 Sales

This holiday season is still a long way off for parents, but toy makers already are placing wagers on what games, puzzles and dolls children will be begging for come Christmas 2001.

The two-word favorite? Harry Potter.

At its annual pre-toy fair show, Mattel Inc. worked to build excitement and sales by offering retail toy buyers a sneak peek at the company’s top-secret toys of the future, including its hotly anticipated Harry Potter products.

Along with Rhode Island-based Hasbro Inc., which next year will introduce its Potter trading cards, Mattel is counting on the Harry Potter series of seven planned books to be a long-term revenue generator.

That’s usually a dicey proposition in the fickle toy world. But toy buyers said they are optimistic about the hit potential of anything associated with J.K. Rowling’s phenomenally popular series about an orphan who learns he has wizard powers.

In a darkroom expertly designed to look like Harry Potter’s Hogwarts School of Witchcraft and Wizardry, costumed presenters debuted the Harry Potter Trivia Game, a kind of 700-question Trivial Pursuit for preteens that will arrive in stores this fall.

El Segundo-based Mattel is capitalizing on its array of licenses from Warner Bros., which will release the first Harry Potter movie in the fall of 2001. Later this year, Mattel will offer Potter collectible figures--some for as much as $180--Potter puzzles and a variety of other board and card games and, for fall 2001, a levitation game.

Hasbro’s OddzOn division will enter the fray this fall with a Harry Potter candy called Bertie Botts Every Flavor Beans. Just like in the books, the candy will come in such delectable flavors as Sardine, Black Pepper and Grass. Electronic Arts, based in Redwood City, Calif., announced last week that it won the license to create Potter computer and video games, and Hallmark said Tuesday that it will create greeting cards, wrapping paper and party supplies.

But Mattel, hedging against a volatile trend-driven business, is not putting all its eggs in a Harry Potter basket.

For what Harry calls the muggles, or non-wizards, the company will offer a slew of new playthings, including better-smashing Hot Wheels race cars, “extreme” BMX bikes and scooters, and a made-over, more-modern-looking Mickey Mouse for babies and toddlers.

Jump n’ Learn Elmo--with the familiar red creature on a pogo stick this time--will appear next year as the latest in a long line of active plush toys initiated by Tickle Me Elmo and capped this year with Let’s Pretend Elmo.

Mattel will also release a new group of Sesame Street babies next year, including infant versions of Elmo, Cookie Monster and Zoe. Like their talkative older friend Elmo, these plush toys will cry, babble and make slurping noises.

And in hopes that this year’s robotic dog, Rocket, is a hit, Mattel has already arranged for the animal to give birth next year to robotic puppies.

Toy buyers who attended the show at the Phoenician hotel here said they were encouraged by the offerings. That’s good news for a company that last year posted its first loss in a decade, following its acquisition of troubled software maker Learning Co. Learning Co. cost Mattel $3.5 billion upfront and hundreds of millions in losses after the fact.

Those troubles, combined with this year’s computer chip shortage and a strong U.S. dollar that drove up prices for overseas consumers, make the results of this toy show even more important to Mattel and its new chief executive, Robert Eckert.

Though many industry observers focus attention on New York City’s annual International Toy Fair in February, the famous show is mostly that--a show.

The real deals, decisions, negotiations and hot-product debuts take place as much as six months earlier, at a variety of pre-toy fair shows hosted by manufacturers.

Matt Bousquette, president of the boys and entertainment division at Mattel, estimated that if 200 new toys are shown at the New York show, roughly 2,000 new toys are unveiled in Scottsdale.

At Mattel’s private extravaganza last week, buyers spent two days marching through elaborately decorated galleries, previewing the not-yet-available items by category and checking up on products already ordered for this holiday.

The most important part of the show, however, is a chance to place early orders on hot toys for next spring and preview items shipping for fall 2001.

The quest for anything trendy and appealing to young adults also led Mattel to TV, with a board game based on the hit show “Survivor.” That game is expected to arrive in stores by November.

Next year, Mattel will add a “Survivor” card game as well as a hand-held electronic game in the shape of the show’s infamous immunity idol. The notoriously difficult task of trying to pick hit toys makes toy buying about as pressured as commodity trading.

Choose the correct items and a company can post strong sales results for the entire year, because the fourth quarter can comprise 40% of a firm’s annual revenue. Choose badly and a store’s overall sales could plummet, given that many harried parents will buy everything they need from a retailer with the best stocks of one hot product.

With the paper-thin margins of the toy business, companies can only hope for decent earnings if they have the key products that drive traffic. On the flip side, a misplaced bet can be disastrous.

Over the next two years, parents will also see several games from their own childhoods. Look for new Othello and Rock ‘em Sock ‘em hand-held computer games.

And there are more odd couples planned, including the ultimate confluence of old and new: ‘N Sync Uno, featuring the kids’ band of the same name, and another Uno, with, of course, Harry Potter.

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The Gotta-Have Toys

The first Harry Potter merchandise is expected to be popular with shoppers this holiday season. Perennial bestsellers Hot Wheels and Barbie products routinely top toy lists, but they don’t cause the kind of frenzied buying brought on by the hottest toys of past seasons:

1999: Anything Pokemon; Furby and Furby Babies

1998: Furby, the original; Pokemon

video games, cards, stickers

1997: Tamagotchi Virtual Pets

1996: Tickle Me Elmo;

Nintendo 64

1995: Star Wars action figures;

Legos

1994: Mighty Morphin Power Rangers; Lion King toys

1993: Mighty Morphin Power Rangers; Batman action figures

Researched by NONA YATES / Los Angeles Times