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Remote Control Toys Shift into High Gear

Wednesday, 28 Apr 2010 | 2:02 PM ET

Remote-control car or Nintendo DS? Most six-year-olds these days would reach for the latter.

In recent years, radio-controlled toys have gotten lost amid the flashy video games and hand-held electronics.

The technology of traditional “out of the box, ready to run” devices grew stale and with long charge times, bulky designs, and limited ways to play, sales suffered.

Mattel Stealth Ride
Source: Mattel
Mattel Stealth Ride

But get ready for a comeback, as both legacy brands and new players look to turn around slumping sales and relaunch the remote-control category. With technology cheaper and more easily reproduced, manufacturers are shifting gears to bring updated equipment to RC toys and offer consumers a better value.

“It’s an opportunistic time to take advantage of technology that’s gone from dollars to pennies and drive that into toys,” said Joel Carter, Vice President of Marketing for Innovation First International, a robotics products developer in Texas operating the HEXBUG line of microchip-driven critters. “Kids are trading up for iPods, electronics with higher price tags, showing they’re willing to spend the money. But with the economy, what people are really looking for is value.” (To see how technology is used in new RC toys, click here.)

Getting it right could give toymakers a boost. According to NPD Research, the US remote control toy generated $582 million in 2009 retail sales, down 30 percent from 2007, while online gaming on PCs and consoles increased from an average of 7.3 hours a week to 8.0 hours a week.

Mattel is one player who is coming back to the RC category. Using its Hot Wheels brand, the company will begin selling pocket-sized Stealth Rides in August. As slim as an iPhone, but a third its weight, the tiny racer works off infrared technology and newly engineered flattened pager motors.

Stealth Rides is the first leg in Mattel’s efforts to return to RCs, according to Mike Fulkerson, director of wheels at Mattel.

“The RC industry was very commoditized,” Fulkerson said, “but with costs down in technology, now Mattel can put stake in the ground by being innovative.”

Innovation had long been Spin Master’s motto as it looked to capitalize on the technology lapse through Air Hogs, a brand focused on advancing the category and making RCs affordable for kids. The company invests 15 percent of its revenue to research and development each year. Their in-house lab is equipped with customized aerospace equipment, and they introduce four-to-five new toys every season, according to James Elson, the company’s director of product development.

Toys like the Switch Blade use a form of shape-memory alloy, a metal that is often used in the medical field to make stents. This alloy is programmable and in the Switch Blade it is use to turn spinning saucers into flying jets in midair with a touch of the remote.

This fall, the brand plans to unveil the Hawkeye—the first toy helicopter of its kind, combining remote-control features with digital hardware. A built-in camera, the size of a lentil, allows kids to shoot photos and videos while flying the aircraft. The images can then be transferred with its removable USB key to view and edit on the computer.

“The future of RC vehicles will be into the interactive,” said Grant Chapman, the company’s director of marketing. “It’s not just I drive, you follow, but toys with intelligence built in, with depth of command. This bridges toys to real life, toys to other passions.”

At prices ranging from $20 to $70, Air Hogs has built a 25.6 percent market share in the remote control space in 2009, according to NPD.

Bandai, the world’s third largest toy manufacturer by sales, is also poised to take advantage of the lagging technology. Their 2010 pipeline will debut RCs at both toy and pricier hobby-tier price points.

“The RC business is ripe for innovation,” said Mark Schaffner, Bandai America’s executive vice president. “Today, more than ever, it’s about driving technology in the RC business because of cost-base opportunities and affordable innovation.”

Hexbugs
Source: Innovation First Inc.
Hexbugs

The Cyclaws is due out in July, priced at $79.99. It combines traditional radio-control play with a sensor that detects changes in the surface below, automatically transforming its tires to claw-like contraptions to maneuver more rugged landscapes.

By adding this new transform-mode, it demands skill to navigate and lets kids create their own play patterns, described Aki Nakanishi, the company’s senior vice president. “It will be like what you see on missions to Mars.”

RC toys today are no longer one-trick ponies as manufacturers face children and parents with mounting expectations. Adroit engineering and updated technologies answer these demands, and the market can expect renewed competition in this field.

“We’re seeing unprecedented value in these toys,” said Carter of Innovation First International, whose Nano HEXBUG was released this spring. “The toy market is going to continue to gobble up technology.”

More from Consumer Nation:

Questions? Comments? Email us at consumernation@cnbc.com

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