Imaginary Playfriends, iPods And Pets 'Storm' Toy Fest.

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Author: Hein, KennethEbenkamp, Becky

Dateline: Toy Fair

THERE are no doubt fascinating sociological reasons why it is so, but whatever the cause, the market for virtual living things is booming as marketers find new ways to bring electronic toys to the youngest demos.

Such electronic friends are a rare bright spot for ailing toy sales, which fell 4% last year to $21.3 billion, per the NPD Group, Port Washington, New York. Merchants at the 103rd American-International Toy Fair in a blizzard-laden New York last week blamed everything from the iPod to retail consolidation, but gamely hawked their wares, which more often than not required batteries or some other kind of electronic charge.

Years ago, a child might be comforted by a Raggedy Ann doll, but these days, it's likely to be a plasma screen TV. Take the $29.99 Jibbi, created by Radica USA, Dallas, which is a "friend who lives in your TV" and reacts to commands from users. Ads from Riptide, New York, will tout the virtual active TV in September.

"Girls are leaving the toy industry at an early age," said Chris Wilson, vp-marketing at Radica. "Once they get past Barbie, there's not much more for them. Room décor is very important to young girls. Jibbi is a friend who lives in their TV in their room. It fits in with their play pattern." Reyne Rice, trend specialist for the Toy Industry Association, New York, agreed: "I think as the high-tech trend continues, we'll see more of these toys that come to life," she said. While a "friend who lives in your TV" may evoke uncomfortable memories of watching Poltergeist, other virtual pals are more traditional.

Bandai, perhaps best known for its line-up of Power Rangers toys, helped hatch the virtual pet/friend craze when it brought back Tamagotchi in 2004 after originating the category here in 1997. The latest incarnation, however, does not die if unattended. Instead, they drive off, or in the case of Mattel's Pixel Chix, go shopping at the mall.

Hasbro has reaped similar success with its Fur Real Friends--electronic dogs, cats and pandas--and is introducing a Cuddle Chimp to the lineup this fall that eats a plastic banana and gives hugs. Darwinists may see a link between that product and Hasbro's revamp of Baby Alive, a doll originally introduced in 1973 that is much more interactive these days, even though its eating and pooping features are hardly new.

Baby Alive vies with Playmates' Amazing Allysen, which builds on previous electronically enhanced generations, with a 32-megabyte computer that remembers things that are said to her. Tell Allysen you like soccer and she may mention it to one of three other friends when she's talking on her cellphone. A 30-second TV ad, via the Rotter Group, New York, will say, "It's amazing. She really knows." Allysen launches this fall and will retail for $99.99.

While there are plenty of faux friends available, Playmates COO John Sinclair feels that having Amazing Amanda, the No. 1 doll of 2005, gives them "the high ground. As a company with doll roots, we wanted to make a doll that was more interesting and real to make the play pattern more magical."

TAKING THE EVOLUTION THEME FURTHER, an army of robotic toys were also on display. Lego's latest "build your own" Mindstorms robot kit, which launches in August with TV support, will allow kids to create four different robots, including a scorpion that stings when you get in its way. It starts at $249. Then there's WowWee's RoboSapien, a 22-inch robot that looks like a Star Wars Stormtrooper. Users had hacked into the original to make it do naughty things, said a rep, so the new version is even more hacker-friendly, sports a small screen and plays MP3s.

That item, like Hasbro's Butterscotch pony, both retail for $300, which seems to be the magical price point that's just below the ceiling of what parents will spend. Upstart firm Zizzle Toys, Roger Shiffman's second act, is attacking that same stratosphere with a $299 pinball machine licensed with Marvel, WWE and Disney's Pirates of the Caribbean 2 themes. But will retailers bite? "No one's afraid of that price point as long as the value delivers," said Marc Rosenberg, CMO at Zizzle. Mattel's Power Wheels line, for that matter, included a $260 Ford Mustang GT and a Jeep Hurricane with two Hemi engines, sturdy tires and shocks that can hold a driver weighing up to 130 lbs.--for a sticker of $400.

There are plenty of other accessorized playthings in that range, notably iPods, which are eating into toy sales, said Jakks Pacific CEO Jack Friedman. "If parents buy an iPod, that's one less toy they may buy," he said. Jakks had its own take with the iPet, which marries iPod-type looks and functionality with virtual pet mania. Like Jakks' influential and strong-selling TV Games, it also plugs into a TV.

Among others clawing the genre: Hasbro's iCat and iDog, which plug into an iPod and bop around to the music they channel, Zizzle's IZ, whose robotic belly controls a song's beat backed by a Kool-Aid promotion and licensed merch this spring, and MGA Entertainment's line of iPets styled for its super-selling Bratz dolls.

And it doesn't end there. Rice and others noted a flurry of digital devices aimed at the age-3 set. "It's a bit controversial," she said, referring to some parents' views about letting their pre-preschoolers take to tech, "but it's just another way for them to role play with items their older siblings and parents are using." Fisher-Price has a $72 Digital Song & Story player (completed by an online store selling tunes at $1 a pop) and a $70 Kid-Tough digital camera that holds 60 snaps in its new Kidtronics line, while Emerson Nicktronics has a licensed SpongeBob camera.

THEN THERE'S THE GOOD 'OL TV. As Jakks' TV Games became a hit (the company claims it has sold more than 50 million items at $20 apiece: you do the math), rivals are rushing out TV and DVD player add-ons. For instance, LeapFrog launched Little Leaps, a video game for infants aged 9-36 months. The "grow-with-me" learning system will mark Leapfrog's biggest launch this fall and is designed to transform TV from a passive media into an onscreen learning experience. Infants are prompted and rewarded to hit buttons on a console. As they grow older, the console flips over to reveal a joystick useable for more advanced games. It will retail for $39.99; learning discs are $17.99.

Likewise, Jakks is rolling out TeleStory, electronic books that connect to the TV so kids can highlight unfamiliar words and hear them read aloud. Funrise's entry is Zooos, games that work with a wireless controller and plug into most DVD players. Hasbro also has Ion, a TV-based videogame with a camera that encourages kids to play by directing motion with their bodies, therefore having to leave the couch. Several players, from Hasbro to Hit Entertainment to Barbie, have incorporated DVD components into dolls and games.

Such products show that far from fighting age compression, most toymakers are embracing it. But even so, the toy business is not exactly a growth industry anymore. So how does a toy company compete? Jakks' strategy is to diversify into stationery and pet products. Many see the latter as much more promising than human toys and Jakks showed off a line of teeth-cleaning products and guns that shoot tennis balls (all the better to fetch with), plus a new line licensed from Snoop Dogg by way of the William Morris Agency. Asked if Jakks should be considered a toy maker, a rep said that "toy and consumer goods company" was a better fit. Jakks CEO Friedman said such acquisitions give it extra clout dealing with retailers like Wal-Mart and Target. "I predicted 10 years ago there would be retail consolidation, but I didn't even think it would be this much," he said.

IT DIDN'T HELP THAT, barring Superman, Disney's Pirates and Pixar's Cars, 2006 seems to be an off year for film-licensed merch. But next year's outlook ought to be better with Shrek 3 and Spider-Man 3 in the wings. Sony's Surf's Up, for instance, won't hit movie screens 'til next summer, so the show was just a chance for Sony Pictures Animation to build buzz for the property--the studio's still in talks and will sign a master toy license later this month. The new division is taking a strategic, cautious approach with toys and other tchotchkes for its first release, Open Season (August 29).

"From a merchandise standpoint, we're going out and talking to the retailers and [learning] what CGI films have done well in which categories for them," said Juli Boylan, svp-consumer products, Sony Pictures Consumer Marketing, who sees it as more of soft-goods than hard-goods appropriate (Ubisoft and Zizzle are onboard for video and handheld games, respectively).

Other properties aimed at fanboys, rather than boys, like New Line Cinema's November release Tenacious D In: The Pick of Destiny. NECA's seven-inch Jack Black and Kyle Action Figures with Sound (guitar and mics sold separately) will sell for $14.99 at Spencer Gifts and other specialty outlets. "We want to take a page out of what we did with Austin Powers," said David Imhoff, New Line's evp-worldwide licensing and merchandising, of the comedic dynamic duo. "The positioning is teens and above. This is not for the 5-year-old kids, but the fans who watched the HBO series and bought their CDs."

ODDS 'N ENDS: Toymakers have taken note of the Sudoku craze. Radica, which specializes in inexpensive handhelds, including its top-selling 20Q, is launching an electronic Sudoku game with four skill levels and more than 100,000 puzzles, that retails for $19.99.

LeapFrog also offers Sudoku The Power of Nine for $19.99, sporting 400 puzzles and is compatible with its Fly Pentop computer.

• Just in time for the World Cup, Lego has a new build and play soccer set that comes complete with in-stadium signage from Adidas, McDonald's and Philips.

Lego adds to its construction toy license for Nickelodeon with Avatar and SpongeBob themes. Mr. SquarePants will star in an April promo where a two-foot version travels to kid's homes, amusement parks--and rubs plastic elbows with celebs. A Lucasfilms' license runs through 2011, Batman through 2009. Bionicle toys will get tucked into McDonald's Happy Meals this fall.

PHOTO (COLOR): Worth the trek?: Buyers eyed Jibbi's TV pal, Fisher-Price's videocam and WowWee's Robosapien (at top).

PHOTO (COLOR): My not-so-little pony: Hasbro's Butterscotch eats carrots, parents' wallets.

PHOTO (COLOR): Diversify, pet edition: Rufus meets Snoop via Jakks.

PHOTO (COLOR)

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By Kenneth Hein

With Becky Ebenkamp