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The hottest holiday toys
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October 18, 2001: 6:48 a.m. ET
Industry event highlights what's likely to top wish lists this holiday season.
By Staff Writer John Chartier
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NEW YORK (CNNmoney) - Some of this year's hottest toys are not cutting edge, high tech gadgets, but familiar standbys like action figures, cars, trucks and dolls.
Many retailers have shifted the emphasis from big ticket, high-tech toys like last year's electronic robot dogs, to traditional toys that rely more on imagination as consumers look for more moderately-priced items amid a slowing economy and the Sept. 11 terrorist attacks, analysts have said.
Rescue hero action figures, Barbie, Power Rangers, Shrinky Dinks, ant farms and other toys long familiar to today's parents are expected to be among the season's bestsellers, according to a list released this week at PlayDate 2001, a New York trade show featuring the nation's toy retailers and manufacturers.
Topping the list is a futuristic action figure called Bionicle from Lego, Barbie, from Mattel (MAT: down $0.30 to $17.50, Research, Estimates) , the PlayStation 2 video game console from Sony (SNE: down $0.65 to $40.10, Research, Estimates) , and two video games, Metal Gear Solid 2: Sons of Liberty for the PlayStation 2 from Konami, and The Sims Hot Date PC game from Electronic Arts (EA: Research, Estimates) .
Mattel is also offering several new additions to its Harry Potter license, including an interactive dragon called "Roarin' Snorin' Norbert."
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Shrinky Dinks are back on shelves this holiday (CNN/FILE) | |
SpinMaster Toys, which recently acquired the rights to Shrinky Dinks, has expanded production of the once popular plastic crafts.
Even the old ant farm is back with a new twist. Uncle Milton, which first introduced those square green boxes in 1956, is offering Xtreme Ants, a modern variation on the original in which ants run a gauntlet through a miniature sports park.
Educational games are also key this year. K-B Toys Inc., which bought the rights to defunct e-toys, is selling a line of electronic games that teach children about the solar system, U.S. presidents and dinosaurs, among others.
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The classic ant farm has undergone an overhaul (CNN/FILE) | |
Toys R Us Inc. (TOY: down $0.07 to $19.37, Research, Estimates) is also featuring exclusive products in conjunction with Scholastic Inc. (SCHL: down $2.61 to $44.69, Research, Estimates) and the Home Depot (HD: down $1.11 to $40.51, Research, Estimates). Toys include a vegetable garden kit and landscaping toys.
"This year there's an emphasis on imaginative play, from action figures and dolls like Power Rangers and Polly Pocket, to constructive toys like Playskool's Bob the Builder and K'NEX's Screamin' Serpent Roller Coaster," said Sean McGowan, a veteran toy industry analyst and co-founder of PlayDate Inc., which sponsors the annual event.
Retailers in general are anticipating holiday sales to increase just 2.5 to 3 percent compared with a year ago, according to the National Retail Federation. That's down sharply from the 5 percent increase posted in the 2000 holiday season compared with the previous year.
Toy sales are also expected to increase just 2 or 3 percent from last year, according to the Toy Manufacturers of America Inc., an industry trade group.
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K-B Toys is featuring several educational games this holiday (CNN/FILE) | |
The holiday period is typically defined as the five-week period between Thanksgiving and New Year's Eve with the heaviest shopping days coming the day after Thanksgiving and the Saturday before Christmas.
The toy industry is also anticipating strong demand for rescue hero-related toys such as firefighter and police action figures, earth-moving equipment and trucks, and toy medical kits in the face of terrorist attacks that destroyed the World Trade Center and part of the Pentagon.
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"World events may help the success of new patriotic products like Rescue Heroes from Fisher-Price. Yet retailers still see evergreen brands such as Mattel's Barbie and traditional LEGO leading the way off store shelves in the next few months," McGowan said.
Many of the items sell for under $50, but one notable exception is video game consoles, which sell for several hundred dollars. Analysts still anticipate brisk sales of the three next-generation consoles -- Nintendo's GameCube, Sony's PlayStation 2 and Microsoft's (MSFT: down $2.42 to $56.03, Research, Estimates) Xbox.
However, many violent game titles have been pulled from production, but that could simply increase demand for sports titles, McGowan said.
The lack of a blockbuster children's movie in the last year or two has put pressure on toymakers. The Pokemon craze has all but disappeared and the Star Wars resurgence has lulled as fans await the release of the next installment.
But a few films due for release during the holiday season such as "Monsters Inc." and "The Lord of the Rings," has spawned a slew of new toys.
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Toy Biz, a unit of Marvel, produces "Lord of the Rings" figures (CNN/FILE) | |
On display at PlayDate was a line of collectible action figures and toys from Toy Biz, a unit of Marvel Enterprises (MVL: unchanged at $2.35, Research, Estimates), related to "The Fellowship of the Ring," the first installment in the "Lord of the Rings" trilogy based on the fantasy classic written by J.R.R. Tolkien.
And Toys R Us is featuring action figures and plush toys tied to the expected re-release of "E.T. the Extra-Terrestrial."
Retailers have been struggling with declining sales at least since January, as consumer spending, which fuels two-thirds of the nation's economy, has slowed in the face of massive layoffs, higher energy prices and a volatile stock market.
The Sept. 11 terrorist attacks in which hijackers slammed commercial jets into the World Trade Center and the Pentagon killing thousands, hastened the spending slowdown, which peaked the day after the attacks.
Spending levels have been restored to pre-attack levels for many, but much of that reflects a shift to everyday items rather than gifts or big-ticket purchases that carry the higher margins that add to profits.
Many merchants have resorted to steep discounts to drive sales. The auto industry in particular has been struggling since many automakers began offering 0 percent financing last month.
Nevertheless, consumers are still going to buy toys for their children during the holidays no matter what shape the economy is in, but they are likely to go for lower-priced items, analysts have said.
For instance, the action figures retailers expect to be popular this season mostly sell for less than $20, a much lower price point than other big-ticket toys consumers were buying two years ago, before the economy began to cool.
"No parent is going to say 'I'm not buying any toys for the holiday this year,'" said Diane Cardinale, a spokeswoman for the Toy Manufacturers of America, an industry trade group. "But if we do go into a recession and people cut back, they will be purchasing the classics, the less expensive items." 
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