(FORTUNE Magazine) – -- Has Scrooge been selling toy company stocks short? They tumbled 41.8% in October, further than the shares of any other industry. Last year's sensation, Worlds of Wonder, maker of the Teddy Ruxpin talking bear, announced giant third-quarter losses partly owing to production and distribution problems, and said it may break up. Hasbro, Mattel, and most other major toy companies are also likely to post disappointing results for 1987. Don't blame the market crash. Thomas Kully, a toy analyst at Chicago's William Blair & Co., was expecting flat sales even before Black Monday and hasn't changed his estimate. The trouble in toyland is that U.S. companies have failed to come up with a big hit. This season's smash, a video game system made by Nintendo, hails from -- you guessed it -- Japan. A base price of $80 buys a system with supersophisticated sound and graphics and the oddly named Super Mario Bros. video game (not the one pictured). Fanatics of all ages have spent weeks working to carry Mario, the hero, through the Mushroom Kingdom to rescue Princess Toadstool. Nintendo, which has raised prices slightly because of the drooping dollar, may rack up more than $600 million in U.S. sales this year. It is single- handedly revitalizing the video game business. Sales hit $3 billion annually in 1982 and then fizzled to $100 million by 1985. This year they are expected to rebound to $825 million. Once-dominant Atari is No. 2, with about a 12% share of the market. With no other blockbusters to buy, consumers are returning to the standbys. Mattel's Barbie, who has her own doll rock band at the advanced age of 28, recently returned to No. 1 among best-selling toys, according to Toy and Hobby World, a trade publication.