The toy industry is big business - $22 billion to be exact - and finding the next Tickle Me Elmo or Nintendo Wii could spell fast money. How can you get ahead of the curve?
Fast Money’s Jeff Macke’s took a trip to the industry’s Toy Fair ’08 in New York City. Following is his report.
My Little Pony, dolls, and shoot ‘em up video games will probably sell well this year, they often do, he says. But the real fast made could be made in “motion''.
The Nintendo Wii changed the game last year and toymakers are following suit. Interactive games that get kids off the couch will probably be the toy trade of the year.
“ITOYS" solves the problem by linking motion detection to something like a pedometer. A child must accumulate points through movement, and can’t play video games until he’s played outside first.
Hasbro, the second biggest toymaker in the world behind Mattel, may also have a breakout hit. They’re putting together a game called "U Dance". It’s not part of a game system, so there is no dance pad. It simply uses motion detection to teach movement. It’s fun, it’s social, and it retails for under $100 dollars.
What’s the bottom line? If it feels like a video game, but gets the kids moving like exercise, it could be a moneymaker.
How do you trade it?
I think Hasbro (HAS) is on top of the trend, says Jeff Macke. Or you could play Nintendo (NTDOY), although I think the trade on the console side is nearly over. Also video game makers Electronic Arts (ERTS) and Activision (ATVI) could be worth a look.
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Trader disclosure: On Feb.20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (HAS), (YHOO), (ATVI); Finerman Owns (GS); Fineman's Firm And Finerman Own (KALU); Finerman's Firm Owns (MSFT), (TSO), (VLO), (YHOO), (AAPL); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM),(COF); Finerman's Firm And Finerman Own (CROX) And (CROX) Options; Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (AAPL), (MER), (MSFT), (S), (TSL); Seygem Asset Management Owns Gazprom OAO; Seygem Asset Management Owns (NIHD), (GFI); Seygem Asset Management Owns Lebedyanskiy OAO; Seygem Asset Management Is Short (EEM)