Dan Ackman - Toy Story

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LEISURE & ARTS 25 February 2006; P12

Not Child's Play --- Winning in
the toy game is serious business

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By Dan Ackman

New York -- TOY PEOPLE ARE TOUGH. They face a shrinking market, and one that is growing more crowded by the day. Their customers are small and getting smaller and are weighed down with too many toys already. Still, they sold= ier on through the wreckage.

Toys should be fun, right? But the weeklong American International Toy Fair, which closed earlier this month in New York, could be exhausting. The a= isles were crowded with 1,500 companies hawking more than 100,000 products, so = many based on gimmicks, gadgets and licensed characters. There were exceptions= to be sure: The toy biz remains full of inventive types still and many eager= new entrants. At Manhattan's Javits Center there was defiance amid decline.

Here are the numbers: Last year, the industry sold $21.3 billion of to= ys, a decline of about 4% from 2004, which came after a 3% drop from 2003, according to NPD Group. Employment in the industry has fallen by roughly = half over the past decade. An increasing share of sales ar= e through mass retailers -- at least 55% last year -- such as Wal-Mart and Target. For the most part, they don't shop at Toy Fair, heading straight = for Hong Kong or having the toy makers come to them. Specialty or independent toy makers and merchants, who do shop the fair, = are left to capture a shrinking share of a shrinking market.

While the media tend to focus on the pricier items, toys are cheap and overabundant. The consensus among toy-sellers is that kids have more toys than kids have ever had. They are weighed down partly because of the affluence of parents and grandparents, but even more because of inexpensi= ve Chinese manufacturing.

While toy makers have been moving manufacturing overseas for a generat= ion, the effect is still being felt. David Schylling, CEO of Schylling Toys, a specialty toy manufa= cturer based in Rowley, = Mass., told me that over the past fi= ve years, the average wholesale price for his toys dropped to $3.59 from $5.= 37. The product he started his business with, the Schyll= ing Flying Bird, wholesales now for the same price it wholesaled at 30 years = ago. "There is too much [junk] and way too many toys," he says. The toys doled out gratis with Happy Meals are the ultimate example.

Meanwhile, children are losing interest. Toy people talk about "k= ids getting older younger" or the compression of childhood. What this me= ans is that kids stop playing with toys earlier and move on to video games. "Legos used to go to 12 or 13; now no 13-year-old kid would be caught dead with a Lego," notes Mark Rappaport, owner of San Diego-based Marky Sparky. Outdoor and sports toys, which once appealed to older kids, have suffered a particular decline as children play outside after school less = than they once did.

A fair number of toy makers have surrendered to the trend, loading toys with electronics. Hasbro's line is dominated by bright lights, including a Nerf basketball set that trash talks back to the player and a $300 horse packed with electronic sensors. It also offers toy MP3 players for three-year-olds.

Amazing Amanda, a $100 doll with voice-recognition software and facial expressions demonstrating animatronic emotion= s, made by Hong Kong-based Playmates Toys, was one of the most popular toys = on the market last Christmas. Judy Shackelford, its creator, insists the gadgetry yields "an unbelievable bonding experience" between do= ll and child and "adds play value."

It is left to the so-called specialty toy makers like Messrs. Rappaport and Schylling= to fight a rear-guard action for the soul of childhood. They are joined by n= ew recruits annually.

Among the 300 first-time exhibitors at this week's fair was Diggin, a brand new company based in Emeryville, Calif., founded by Jenny Stern and Nathan Keker, both 10-year veterans of other Bay-area toy firms. Diggin= features a ball that allows anyone to throw a curveball and an indoor soc= cer ball that glides on a carpet. While he acknowledges the trend toward slot= h, Mr. Keker says, "Among boys especially, = sports are still very hot."

Another newcomer generating buzz at Toy Fair was = Automoblox, a combination car and building block invented by Patrick Calello, a former industrial designer for Colgate Palmolive. Mr. Calello's cars are made from German wood and are crafted into interconnecting parts. With bright plastic hoods, his toys evoke European Smart Cars and roadste= rs, but the design and the patented connectors are his own. Though they are priced at $35, high for a small toy, Mr. Calello, whose company is based in Ro= seland, N.J., says he has sold 35= ,000 in his first six months of operations.

While toy cars were everywhere at the Toy Fair, classic style and craftsmanship were not. "Wood means quality; it means back to basics= ," Mr. Calello says. His cars "are built ag= ainst the disposable nature of everything," he adds. "Kids have so mu= ch, but they don't value anything. Everything is disposable. We are really sending the wrong message."

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Mr. Ackman is a writer who liv= es and plays in Jersey City, N.J.