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Toymakers Hope Parents Are Ready to Splurge

Fur Real Pets
Source: Hasbro
Fur Real Pets

Are parents more willing to splurge on toys for their kids? Toymakers think so.

That was one of the most notable takeaways from this week’s 109th American International Toy Fair in New York.

Toy companies are playing to the extremes. As you walked around the booths of the Jacob K. Javitz Center or visited company showrooms throughout the city, you were sure to find lots of little, low-priced collectible toys as well as bigger, more elaborate items priced above $100 mark. That’s a big step up when you consider the average price of a toy these days is $8.

It’s also interesting because it follows a year of declining toy sales in the U.S. According to market research NPD Group, U.S. retail sales of toys generated $21.18 billion in 2011, a 2 percent decline from the $21.68 billion in toy sales rung up in 2010.

Despite declining U.S. sales, global sales of toys rose about 2 percent, and there are signs that American consumers may be willing to loosen their purse strings and spend more.

NPD research showed Americans are making trade-offs. Parents may buy one pricier toy instead of buying several mid-to-lower priced items, or they will spend more on toys for their own children but buy fewer toys for children outside their immediate family.

The Toy Industry Association is calling the trend “Save and Splurge.” The idea is to find toys that children will keep coming back to again and again or that have a certain “wow” factor.

Teenage Mutant Ninja Turtles
Photo by Adam Jeffery for CNBC.com
Teenage Mutant Ninja Turtles

“I think it’s a matter of needing to have creative toys,” said Carter Keithley, president of the Toy Industry Association, in an interview with CNBC. “That has always been what has driven the toy industry.”

And it’s true that last year there wasn’t one hot holiday toy to drive parents into the store.

TIA also identified five other top trends in the industry right now, and we saw examples of each at the show.

Generation App: Perhaps the most visible trend at this year’s Toy Fair was the proliferation of toys that interact with smartphones and tablets. Toymakers are using technology to enhance classic play patterns — not erase them, according to Adrienne Appell, a TIA spokeswoman.

Angry Birds
Photo by Adam Jeffery for CNBC.com
Angry Birds

Take the popular Angry Birds game. Last year, Mattel brought it to the physical world with a board game based on the app. Other companies licensed the brand and made plush toys and other items. Now, Mattel is bringing Angry Birds back to the virtual world with a new game that uses play pieces that interact with the smart devices.

Others are developing games that incorporate physical toys, or they are using new apps to help develop new brands of toys.

Toys Are Glowing Wild

Glowing Wild: Toys that glow in the dark or light up were also very prevalent at Toy Fair. Examples of this trend included bubbles from Imperial that glow in the dark, Hasbro’s Nerf FireVision Sports football that allows kids to play football in the dark, and FyrWyrks, a light-emitting rocket toy from i-Star Entertainment, to name a few.

Glow Bubbles
Photo by Adam Jeffery for CNBC.com
Glow Bubbles

Little Learners: Appell said she expects toy makers to put a greater emphasis on more complex toys for preschoolers. One reason is there is an expected baby boom on its way that should help boost the growth of the U.S. toy market.

“The population growth for children ages five to zero is growing significantly" in the U.S., Keithley said.

We’re already seeing some signs of that. Mattel’s Fisher-Price brand has a new line of preschool toys based on research the company has conducted regarding the types of music young children respond to the most. These toys include Fisher-Price’s Cruise and Groove Ballapalooza and a new Scoop & Whirl Popper, among other items.

Ballapolooza
Photo by Adam Jeffery for CNBC.com
Ballapolooza

Many Ways to Play! Toys in this category engage kids to play on several different levels, TIA said. These are games that can be played different each time depending on the child’s mood or if they are playing with a younger sibling.

Schoehut Guitars
Photo by Adam Jeffery for CNBC.com
Schoehut Guitars

Young Maestros: Appell expects the popularity of shows like American Idol, Glee, the Voice and X Factor have put musical play in the center of pop culture today.

In recent years we’ve seen popular toys that have incorporated music, and that is continuing today. These products include toys that help children learn how to play music or recognize musical instruments as well as those that get kids up and dancing or those that allow kids to role play and emulate their favorite pop stars.

Ninjas, Designers and Monsters!

Beyond these trends, there is no doubt toymakers are still putting an emphasis on collectible toys, particularly in the boys’ categories. “Blind packs,” which usually contain one or more collectibles in a sealed bag, were all over the show. They’ve been popular because they offer consumers an inexpensive way to collect toys. This year we’ll see small Star Wars figures from Hasbro; Roxx, a new collectible disk game from Imperial; and Monsuno, a new entertainment brand with toys fromJakks Pacific, among others.

GI Joe Ninja
Photo by Adam Jeffery for CNBC.com
GI Joe Ninja

Monster Marbles, from WowWee, is another collectible. But it also taps into another trend: Monsters. There were lots of monsters around the show from the cute and cuddly Monstaz line from Ty to Moshi Monsters and beyond.

Moshi Monsters was a big success in the U.K. and toymakers are hoping to make it big here in the U.S. as well. The brand will likely have a larger presence this year as new companies such as Mega Brands and Innovation First are licensing the brand.

Ladeda
Photo by Adam Jeffery for CNBC.com
Ladeda

Mattel also is hoping to keep the success of its Monster High brand going with new products and Webisodes set to be released throughout the year.

Meanwhile, the "Teen Age Mutuant Ninja Turtles" won't be the only ninjas on the toy store shelves. There are plenty of other ninja-themed toys coming out, including Hasbro's G.I. Joe doll, who will be dressed in ninja garb for the upcoming film "G.I. Joe: Retaliation."

There also are a lot of dolls for girls that will be using a fashion designer theme this year. Barbie's "I Can Be..." line has the blonde icon working as a designer, and Spin Master, which has retired the Liv doll line, will be taking another crack at the doll aisle with the LaDeeDa brand, which centers around a fashion design theme.

-Courtney Reagan and Jessica Golden contributed to this report.

Questions? Comments? Email us at consumernation@cnbc.com. Follow Christina Cheddar Berk on Twitter @ccheddarberk.

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