Toymakers pulling out the stops this year

WASHINGTON -- You better watch out: This holiday shopping season could be one of the priciest ever as the most tech-laden and expensive gifts for children of all ages, from the $299 animatronic pony Butterscotch to a $300 pinball machine, show up at your neighborhood Wal-Mart or Target.

Even if Santa doesn't leave the elusive $500 Sony PlayStation 3 under your tree, there's still Hasbro's $249 Nerf Showtime Hoops, a basketball "gaming system" with an electronic scoreboard and a recorded voice that can announce whether your child has launched a "brick" or hit "nothin' but net!"

Or you can go to Wal-Mart Stores Inc. to pick up a red Ford Mustang Power Wheels, a $250 battery-operated car for children 3 years old and up. The Mustang is a Wal-Mart exclusive made by Mattel Inc.'s Fisher-Price division, though many other models can be found at other retailers, such as Toys "R" Us.

"Every Christmas season, there's more expensive toys," said Scott McCall, Wal-Mart's chief toy officer. This year, toymakers are pushing prices up even more, he added.

Toys have gotten more expensive for several reasons, industry executives and analysts said. The demand is there: Parents have shown a willingness to spend more on children's gifts. Meanwhile, toy companies are able to make more sophisticated toys because computer chips and robotics keep getting cheaper. The companies can then charge more for those high-tech toys.

Erin Leong, 7, from Hoboken, N.J., brushed Hasbro's new electronic plush toy, the Butterscotch My FurReal Friends Pony. The life-sized miniature pony retails for about $299. (RAY STUBBLEBINE ~ Hasbro)

Higher prices don't seem to be holding back sales. "I would say that Butterscotch has exceeded our expectations," McCall said, referring to the newest member of Hasbro Inc.'s "Furreal Friends" product line.

Chris Byrne, a contributing editor for Toy Wishes, a consumer publication, said that expensive toys have always been available at high-end stores such as FAO Schwarz, which emerged from bankruptcy protection two years ago. What's notable this year is that mass-market retailers like Wal-Mart Stores Inc. and Target Corp. are stocking their shelves with more toys costing $200 and above than they ever have.

One factor behind the trend is the global decline in the price of high-technology parts, such as computer chips and robotics. That allows toymakers to offer sophisticated toys at surprisingly low prices considering what the toys can do.

The "Butterscotch My FurReal Friends Pony," for example, is three feet tall with moving eyes, ears, head and tail. The pony can whinny and snort and can be "fed" a carrot, and if children sit on her she will "gently bounce," the company said.

"There's a lot of technology, chips and capacity sensors ... that the kid's not interested in ... but that makes the pony feel very real to them, and that's magic, and the mom sees value in that," said Sharon John, general manager of Hasbro's Tiger Electronics division.

"Even five to six years ago, some of the stuff that we're doing ... for the prices that we're doing would have been technologically unfeasible," she added.

Butterscotch follows the animatronic FurReal Friends cat, dog and gorilla, John said. The idea for a pony came partly from consumer research. "What little girl doesn't dream of having her own pony?" John asked.

For older children, the so-called "tweens" in the 9-to-12 age group, toymakers are offering higher-priced products that mimic adult high-tech gadgets, such as cell phones, DVD players and even video cameras.

For example, Hasbro's ChatNow is a $75 two-way radio communicator that looks like a flip-style cell phone and comes with colorful stickers and faceplates. It even allows users to take and store up to 30 digital photos.

One holdover from holidays past is that many parents consider the educational value of some toys a good reason to splurge. But we're far from the erector sets of old: Lego is selling the $249 Mindstorm NXT, a wireless-enabled robot that childrenre can program over a computer.

Lynda Weber, 46, settled on a Mindstorm for her 11-year-old son, Max, while shopping recently at a Lego store in McLean, Va. She said she strongly prefers hands-on toys like the Mindstorm over the video-game consoles.

"He has to build it, he has to figure out how it works, he has to use his hands," she said. "It'll be Santa's big present."