At the dawn of the new millennium, the toy industry faces a daunting challenge: capturing the attention of computer-savvy children distracted by the wonders of the Internet, the rush of sophisticated video games and the irresistible lure of the television tube.
What’s a toy company to do?
Well, if you’re an outfit based in Vernon Hills called Tiger Electronics, you create a plush, pointy-eared creature stuffed with a microprocessor that gives it an uncanny ability to talk, giggle and bat its eyes as if it were human. And you name the cute interactive pet Furby, introduce it at the 1998 American International Toy Fair in New York and watch sales shoot into the stratosphere–to the tune of 20 million critters to date.
As the industry gathers this week for the giant trade show, Tiger again will be the company to watch. From an E.T. doll that can utter 1,000 phrases to an inexpensive e-music downloader developed jointly with the Internet search engine Yahoo!, Tiger appears to be leading the charge into the brave new world of interactive toys.
At Toy Fair, the company is showcasing a host of high-tech toys that merge the computing power of microprocessors with old-fashioned fun. It’s part of a broader industry movement to catch the attention of children who already enjoy a plethora of play options.
“There’s no question that they’re surrounded by distractions,” says Roger Shiffman, president of Tiger Electronics, speaking from the company’s showroom in New York. “Our kids are growing up sooner. Electronics is an integral part of their lives, and it’s affecting the toy industry. We’re getting into lifestyle electronics in a big, big way.”
Tiger’s new alliance with Yahoo! offers a prime example of the industry’s attempts to meet the challenge of cyberspace with high technology. At Toy Fair, Tiger will introduce the Yahoo! Cam, a palm-size digital camera that sells for $60, and the Yahoo! Hitclips Downloader, a digital recorder and player that holds up to four minutes of audio downloaded to a computer from the Internet.
By marketing the Yahoo!-branded products, Shiffman said, Tiger appeals to the Internet sensibilities of the Generation Y, today’s teen and preteen set. At the same time, the toys offer them an inexpensive way to access the kind of technology they’ve been hearing about.
“We’re using technology to deliver a fun product at a good price point,” Shiffman said. “Instead of a $200 [MP3-format player], we’re giving them a $25 opportunity to do the same thing.”
The company also is debuting several other toys, including a $35 talking E.T. toy with a lighted finger and telescoping neck, an $8 electronic fortune cookie with some 200 phrases and $30 electronic dance mats that light up in synchrony with music.
They’re all high-tech toys that come cheap–the driving reason behind Furby’s phenomenal success.
Created in 1997 by an obscure California inventor and his partner, Furby hit the market the following year when the Internet was rapidly influencing every aspect of modern society, from grocery shopping to entertainment. An Internet site needed to engage its viewers, giving them something far beyond an on-line version of a mail-order catalog.
The same yen for high-tech interactivity flooded the toy industry–and Furby answered the call with great execution.
“Here everybody was talking about what technology could do for you, and Tiger came out with a toy that made technology accessible to everyone,” said industry veteran Ronnie Goldfinger, chairman and CEO of a Highland Park-based wholesale source for toy retailers called Distributoys.Com.
“Furby was the greatest thing in the world. They made it so interactive you couldn’t predict what it would say or do next. That’s why the thing just exploded.”
It was Tiger’s enviable record of electronic winners that attracted titan toymaker Hasbro Inc., which bought the northwest suburban company in 1998 for $335 million in cash. Before Furby, Tiger produced the interactive key-chain Giga Pets that also became hot sellers.
Furby was even more notable for its success in a cut-throat industry dominated by licensed properties, such as those tied to Disney films or Warner Bros. cartoons.
“With the exception of Furby, virtually every hit toy of the past few years has been based on a license: Tickle Me Elmo, Teletubbies, Star Wars and of course, Pokemon,” says Charles Riotto, president of the International Licensing Industry Merchandisers’ Association.
To be sure, Tiger isn’t the only company ramping up its high-tech offerings this year. Among its many new products, Mattel’s Fisher-Price unit will introduce a voice-activated train, a robotic dog featuring “incredibly life-like behavior” and a new Let’s Pretend Elmo doll that speaks.
Radica Games Ltd., a Hong Kong company that specializes in interactive toys using motion-sensing technology, will offer an Internet-ready digital device that allows users to interact with its Girl Tech Web site, which offers chat rooms, advice columns and games.
“We’ve launched a product that will allow a little girl to have her own version of a Palm” hand-held computer, said Gene Murtha, Dallas-based president of Radica’s U.S. subsidiary.
Murtha notes that the toy industry’s obsession with all things electronic isn’t new. Toy companies were among the first to bring high-tech devices to the consumer level with hand-held, electronic games that were introduced about 20 years ago.
“A lot of the familiarity that consumers have with electronics today started with the toy industry,” Murtha said. “What the industry has always sought to do is use technology to be creative.”
Mattel Inc., for example, has forged a partnership with Intel Corp. to develop standards to make computers and toys interact. The toy giant has created a new generation of Winnie the Pooh bears, race cars and other toys powered by microprocessors, including a digital Barbie camera.
But the Pokemon phenomenon of last year didn’t rely on technology; instead it used creative characters and the fun of card collecting. Most of the toys on exhibit this week are timeless offerings like dolls, board games and building blocks. In fact, experts say most of the newfangled, high-tech toys shown this week won’t survive beyond the holiday season.
That’s because many toy companies fall in love with the wizardry of technology at the expense of old-fashioned fun, says Fisher-Price Brands President Neil Friedman.
“Interactivity is an adult word,” Friedman said. “If the technology doesn’t make the toy magical for the child, then he won’t play with it. That’s hard for a lot of companies to understand.”
