Opinion

The Great Debate

Why the toy industry isn’t having any fun

By Harold Goldberg
February 20, 2013

There was a disturbing sound at the American International Toy Fair  in New York this year ‑ the sound of silence. It was silence that was constant and palpable. Yes, the Jacob K. Javits Convention Center was packed with exhibitors from Hasbro to LEGO, but the show floor was quiet as a suburban cul de sac at dinnertime. There was no hooting, no “Oh my lord, that’s amazing.” Everyone spoke quietly, often in whispers. The effect was a Stepford Wives-like lack of emotion.

Perhaps it was the influence of the Newtown horrors and President Obama’s gun control push; there were very few toy guns in prominent display on the show floor. Even Toy Book magazine, one of the primary publications for the industry, showed no faux weaponry in a 308-page issue at its booth (unless you count half pages on a laser tag toy, G.I. Joe figures and a remote control toy that shoots foam darts). There was no anti or pro-toy-gun opining within its pages, or any indication that a toy could be considered somehow violent. Among the seminars that convention-goers could choose to attend, there was nothing about toy guns. In this Stepford Wife world, it was as if toy guns no longer existed; the industry actually issued a “statement on toy guns and violence” that never mentioned toy guns.

The silence could also be seen as an apt metaphor: The industry is in the doldrums. According to the market research firm NPD Group, U.S. retail toy sales have effectively flattened, to between $16 billion and $17 billion, in recent years. The U.S. toy industry has blamed everything from Hurricane Sandy to the fiscal cliff situation on Capitol Hill. Worldwide sales have also remained lackluster for the last three years, however, ranging from $83.4 billion in 2010 to $84.1 billion in 2012.

On the floor at the Javits Center, the makers of plush toys were quietly aggressive. One salesman for Jay @ Play literally pulled me off the floor to see his company’s line of CuddleUppets, blankets with  puppet heads of, say, a Marvel Avengers character. Plush toys, which accounted for less than 10 percent of the U.S. toy market in 2012, saw a 12.6 percent decline in 2012 on top of a 21 percent decline from 2010 to 2011. That may have accounted for the hard sell to journalists.

There were so many franchise sequels that when Hasbro introduced a giant two-foot –high Metroplex Transformer (“the biggest Transformer ever”) for $125, my reaction was, “Who but a collector is going to spend $125 for that?” Hasbro’s profits dipped by 6.3 percent in the fourth quarter of 2012. While its line of toys for girls grew by as much as 17 percent, boys’ toys declined by a substantial 23 percent.

Why are toy sales flat or declining? New tablet toys and games on Apple and Android devices continue to be released, and their offerings are varied. There’s the Tomagotchi Life virtual pet for Google Play, for instance, which is free. You can blame inexpensive tablets for cutting into toy sales, but you can’t blame portable or console games, wrote the industry spokesperson Kristin Morency in Toy Book. Sales of those games have been sliding for more than two years.

NPD’s list of the top toys of 2012 shows that Leap Enterprises’ children’s tablets are among four of the year’s 10 biggest sellers, including Nos. 1, 2 and 4. Jim Silver, editor of Time to Play magazine, told the Wall Street Journal that even hybrid toys don’t cut it: “Kids looked at these plastic toys used to run digital games and said, ‘Why bother when I can just use my thumbs?’ ”

Not everything dissolved into ennui. There was one engaging battle being fought between companies that have successfully added action figures to their video games and apps. On one end of the convention floor, Activision introduced Skylanders: Swap Force. The tops and bottoms of the toys can be exchanged, thus allowing for different powers to be added when the figure appears virtually in the videogame through what’s called a Portal of Power. The Skylanders series has hit $1 billion in worldwide retail sales for Activision, and adults collect its 100-plus figures, paying premiums at online auctions for rare characters.

At the other end of the convention floor, Disney displayed Disney Infinity behind closed doors. On the surface, it seems very much like Skylanders, albeit with Disney characters like Mike, Sully, Jack Sparrow and the Incredibles. Yet it does set itself apart. For Infinity, Avalanche Software, a Salt Lake City-based developer, enhanced its idea of an open world game for kids first seen in its Toy Story 3 offering. The company has added a building element that mimes the best features of Minecraft, the runaway German hit that’s even taught in elementary schools, to lure kids into a game that will see release just prior to June’s Monsters University film. While Infinity’s artwork still needs a fair amount of touching up, executive producer John Vignocchi demonstrated the building aspect of the software. He added pieces of superhighway, skyscraper parts and giant soccer balls for a user-made football game.

Disney was not ready to begin a war of words with Activision. Reporter after reporter watching the Infinity demo broached the question: How is this different from Skylanders? Without mentioning Activision, Vignocchi stayed on message, saying, “This is an open world experience where players can go where they want to go and create, modify and customize this world using your imagination. It actually teaches kids about logic.”

Activision, too, seemed reluctant to start a toy war. Said John Coyne, Activision’s vice president for marketing: “We’re focusing on our own innovation to this category that we’ve created.” While Coyne wouldn’t even utter the Disney name, he seemed to be saying that no one but Activision could create a great game within this new genre.

That’s the spirit I wanted to see throughout Toy Fair ‑ a kind of cultured pride in creation that didn’t overtly diss. The videogame makers had it.  But the other toymakers I encountered ‑  they have to innovate and create without so easily falling back on franchises. If they are to move forward in this electronic world of tablets and videogames, they have to become more vocal and transparent about the often wonderful world of toys they create. If they’re not having any fun, their customers will continue to go elsewhere.

PHOTO: A man walks past a display for Ty Beanie Babies products at Toy Fair 2013 in New York, February 11, 2013. REUTERS/Andrew Kelly/Insider Images

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How do sales / trends for Educational games compare?

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