Toy companies push high-tech robotic toys to woo young consumers

Tuesday, February 14, 2006

NEW YORK-- If children didn't get their fill of high-tech toys during the 2005 holiday season, they should brace themselves for more wizardry later this year.

With young consumers growing out of toys faster and preferring iPod digital music players and video games, the nation's toy makers are working harder to come up with more high-tech products.

The thousands of toys to be featured at American International Toy Fair, officially beginning Sunday, are even more lifelike than last year. This year's lineup includes a life-sized miniature pony that responds to touch, a Barbie doll that follows the child's dance moves and a robot made from a Lego building set that can be programmed.

Toy makers are hoping these items and a slew of other toys -- the bulk of which will be in stores for the holiday season -- will reverse a sales decline since 2003.

"Children are migrating to consumer electronics faster than toy companies can take them there," said Sean McGowan, a toy analyst at Harris Nesbitt. He expects the industry to report a sales decline of up to 4 percent in traditional toys for 2005, despite what he expects was an improvement last holiday season.

That would follow a 3 percent dip to $20.1 billion in 2004 from $20.7 billion in 2003, which posted a similar decline over 2002, according to NPD Group Inc., a market research company in Port Washington, N.Y.

The good news is that as microchips have come down in prices, toy makers are able to make more advanced toys that are still affordable. At least 75 percent of the toys at this year's event will have some sort of microchip in them. Watching how parents spent more than $200 on iPods for their children has given toy makers more confidence in offering higher-priced toys packed with high-powered technology.

While Mattel Inc.'s "Let's Dance" Barbie doll will be priced at an affordable $54.99, other toys will be priced over $200. Butterscotch, the 40-inch high robotic pony from Hasbro Inc. is priced at $299.99, while Lego Systems Inc.'s Mindstorms NXT -- a robotic kit that enables the user to create an even more powerful robot than the original Mindstorms introduced in 1998 -- will be priced at $249.

But plenty of toy makers don't want to just push any technology at the consumers. Lego, known for its basic building kits, worked closely with a panel of consumers to create a new version of Mindstorms that met the needs of its increasingly sophisticated consumers. The product targets consumers ages 12 and up.

The result is a new robotic kit, which allows the user to build a more sophisticated looking robot with advanced sensors that enable it to hear, react to touch and detect different colors. Users still program the robot from their PCs, but the brain of the system -- a brick that has a 32-bit processor compared to an 8-bit processor in the original version -- is more powerful, enabling it to do more complicated tasks.

"As the toy market becomes more competitive, we have to find ways to get into other channels" that would not have sold Lego products in the past, said Michael McNally, a Lego spokesman.

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