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Toymakers Bridging Tradition and Innovation

Children are wired up with cell phones, consoles, iPods, and computers as early as grade school these days, but this doesn’t mean all tradition is lost.

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“History shows kids go through a progression with toys,” said Patricia Hogan, a curator at the Strong National Museum of Play in Rochester, NY, which houses an encyclopedic collection of toys dating to the early 1800s. “The industry is reacting to kids getting older younger, but there will always be a place for classic toys – Mr. Potato Head, hula hoops, Lego blocks.”

According to an NPD report, Kids and Entertainment Content, digital content consumption is on an obvious upward trend, but the surprising find is that 43 percent of kids that have downloaded digital content did so by the age of six. Yet, the $21.5 billion toy industry has seen the most significant jumps in sales within the building sets and arts and crafts categories of 23 percent and 7 percent, respectively from 2008 to 2009.

“The digital initiatives are just natural extensions of what kids are doing today," said Anita Frazier, NDP Group’s Industry Analyst for Toys and Video Games. "There are just so many play patterns that can't be replicated in a pure digital form, take building sets. And plush computers aren’t very comfortable to snuggle up with at night.”

Sure PCs may never replace dolls, but the transition from the latter to the former has gotten shorter.

The goal now is to seamlessly merge the old and the new, keeping kids interested with products that impart traditional play patters with flashes of the digital world. To many analysts, like USA Toy Experts founder Richard Gottlieb, the next step in toy land is building that bridge for what he calls “trans-media storytelling.”

Much like Nintendo’s Wii, transforming real life users and their motions into a world of games, future toys will follow that fundamental philosophy. Children will read books that branch off into movies and interactive games. Kicking a ball would be able to be done across continents through satellite imaging. Classic remote-control toys like Air Hogs’ Hawkeye, hitting shelves this fall, will have digital recording and editing capabilities.

“Recognizing the pervasiveness of the computer in kids’ lives, toy manufactures have responded by introducing a variety of toys that have ‘web-connected’ play and electronic and digital features,” Frazier said. “The toy has a physical presence, but an ongoing life in the digital world.”

The physical end also means brand names and tradition continue to play a role in toy purchasing decisions. NPD research showed that Disney- and Nickelodeon-licensed product ranked high in sales across many categories, while kids nine and above were willing to drop more money on branded items by the likes of Nintendo, Sony , Apple , and Nike .

But whether or not there’s a big name on the box, the end product looks to capture and hold the attention of an increasingly sophisticated youth, and the formula includes both tradition and innovation.

“In the future,” Hogan said, “electronic toys and classic toys will live together harmoniously, serving every child’s needs.”

More from Consumer Nation:

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

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