Toy Concepts Grow Up Fast
NEW YORK -- The hottest new products at the American International Toy Fair trade show aren’t really toys so much as inexpensive consumer electronics that are kid-friendly and can take a beating.
After years of watching cellphones, MP3 players, video games and digital video cameras steal sales, major toy makers this year are pinching a page from another industry’s book.
“I don’t even call it the toy business anymore,” said Jim Silver, publisher of Toy Wishes magazine. “It’s the family entertainment business.”
The 2005 Toy Fair, which officially opens on Sunday in New York, is a showcase for what the industry hopes is a turnaround. In 2004, toy sales, which had been soft for years, slid 3% to $20.1 billion, according to market research firm NPD Group, partly because children shunned traditional items in favor of their parents’ electronic gear.
So Mattel Inc., the world’s largest toy maker, plans to sell its first cellphone this June. The $35 My Scene Barbie phone is meant for girls as young as 8. The bright floral device, which requires activation from Verizon Communications Inc., allows girls to download ring tones from the Barbie website.
“Cellphones are by far the No. 1 ... electronics [product] requested by girls,” said Dan Frechtling, director of marketing for El Segundo-based Mattel. And girls ages 8 to 12 constitute a market that Mattel believes has been underserved by video game companies and consumer electronics giants.
Another new Mattel product is U-Flix, a digital video camera that is set to hit stores in the fall. It allows children to shoot and edit movies on PCs and watch their productions on TV at home. The plastic camera won’t compete with top-end grown-up products by Sony Corp. or Matsushita Electric Industrial Co.’s Panasonic, but it’s priced for kids at less than $100.
Also coming up is Pixel Chix, a $25 hand-held game intended for girls as young as 5, to compete with Bandai Co.’s popular Tamagotchi digital pet. The Mattel character is a virtual digital friend who lives in a plastic house. When ignored, the digital gal pal fumes and packs her bags on screen. And Mattel’s $59.99 Star Station karaoke machine, set for introduction in July, uses a video camera to allow a child to sing songs on his or her own television, add disco-type effects and then burn the performance to a DVD.
As for No. 2 toy maker Hasbro Inc., it is planning a fall launch for ChatNow, a walkie-talkie that looks like a cellphone and allows kids to call, write text messages and send each other digital pictures from an attached camera within a two-mile radius. A pair of walkie-talkies will retail for $74.99.
“The reality of the toy business is that kids are getting older younger and growing out of [conventional] toys sooner,” said Hasbro Senior Vice President Wayne Charness.
The company’s toy designers believe that kids don’t want to just play a game, they want to interact with characters or become part of the action. So Hasbro has high hopes for its $119 Ion Educational Gaming System, equipped with a small camera that will put kids on a TV screen with cartoon favorites such as SpongeBob SquarePants and Dora the Explorer.
One game asks kids to jump around and use their arms to fling unwanted letters away and carry letters to one side of the screen to spell words; game cartridges cost an extra $17.99.
This toy is part of the growing category of “plug-and-play” games, launched in the last couple of years, that don’t require special video game consoles and simply plug into a television’s audio-video jack.
Linda Bolton Weiser, an analyst with Oppenheimer & Co. in New York, said both Mattel and Hasbro had been more skillful than rivals at “trying to make their products more relevant to older kids.”
Given that retailers Toys R Us Inc. and KB Toys Inc. are shuttering hundreds of stores, that could help get the toy makers’ products into more stores like Best Buy and Circuit City, she said.
Movie tie-ins also play a role in the new products. A $49.99 video game by Hasbro, tied to the May release of “Star Wars Episode III: Revenge of the Sith,” allows kids to wave light sabers and fight Darth Vader or other Jedi characters on their TVs.
Jakks Pacific Inc., which pioneered the plug-and-play category with its TV Games Atari game a couple of years ago, now has more than 12 such products, including Spider-Man, Blue’s Clues and retro games such as Ms. Pac-Man. Several of Jakks’ $20 games were among the top sellers at toy stores this last holiday season.
The Malibu-based firm’s stock has fallen sharply recently amid investors’ growing concern about a licensing scandal. A former licensing chief at World Wrestling Entertainment Inc. recently pleaded guilty to accepting kickbacks in exchange for handing out WWE licenses. Jakks makes WWE figures and games.
Jakks is hoping to regain some momentum by launching 20 new game titles this year, including Batman, Mortal Kombat and another based on the popular “Jeopardy” game show. The firm is also launching new cartridges, called Game Keys, that add two extra games to each of its newly released units, priced at just under $10.
To do well in the toy industry, you have to have “innovation or content,” said Stephen Berman, Jakks president. “We are constantly rolling out new titles” to keep kids and gaming adults buying.
Even the most old-fashioned of toys, such as stuffed animals, are getting electronic makeovers. Mattel has two new programmable Elmo and Winnie the Pooh plush toys, due out this fall. These $39.99 dolls allow a parent to use computer software and a USB cord to personalize them, so the toy knows the child’s name, sings his or her favorite songs and tells the child when it’s nap time or bedtime.
“We are seeing a quick turnaround” on these new electronic toys, said NPD analyst David Riley. “It’s a shot in the arm for the industry.”
