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After several challenging years, it's fun to be in the toy business again.
As more than 1,000 toymakers gathered to show off new products at the American International Toy Fair at New York City's Javits Center, experts were upbeat about the industry's outlook.
"We know that consumer sentiment is improving and the toy industry grew 10 percent in January," said Juli Lennett, president of U.S. toys for market researcher The NPD Group. "We don't typically see that kind of growth in the industry, so we're off to a really great start."
That comes on the heels of 4 percent sales growth in 2014, according to NPD, with U.S. retail sales hitting $18 billion, helped in part by the success of Disney's "Frozen."
Experts suggest licensed toys will continue to do well again this year, and there are a number of promising toys such as an interactive Barbie doll, a wearable action video camera and self-driving cars that could be on kids' wishlists this year.
"Licensing right now in the toy industry is very strong," said Marty Brochstein, senior vice president of industry relations at the Licensing Industry Merchandisers' Association (LIMA).
Sales of licensed toys rose 7 percent in 2014, outpacing the toy industry as a whole, according to NPD's data, and LIMA estimates licensed properties totaled $2.6 billion in royalty revenue.
With the new, highly anticipated "Star Wars" film hitting theaters in December, plus a new "Avenger's" movie and the buzzed-about "Jurassic World," licensed toy lines are expected to keep outperforming.
"We're looking at a pretty healthy base as we move into 2015 and look towards the number of big movies, the number of TV shows, which are contributing to a really good outlook," added Brochstein.
Companies reaping the rewards include Lego, which claims a slew of licensed products from DC Comics to "Star Wars" to Disney Princesses.
The Disney Princess license is highly coveted thanks in part to the wild popularity of "Frozen." For small dolls, Mattel currently holds the rights, but competitor Hasbro will take over production in 2016.
For larger Disney Princess dolls, Jakks Pacific has the rights, and the toymaker plans to continue to leverage the popularity of "Frozen." This year it's rolling out a crooning Elsa doll that lets kids to sing along karaoke-style to "Let it Go."
For New York-based Yottoy, the official U.S. licensee of Paddington Bears, the recent film has meant unprecedented sales for the toy company.
"The phone has been ringing off the hook, 24 hours a day," said Kate Clark, co-founder of Yottoy. "We've seen an upsurge in sales like we have never seen before."
But it's not just licensed toys that generated buzz at the fair. Mattel unveiled its "Hello Barbie" prototype, a traditional-sized Barbie, internally wired to engage in conversation. In partnership with San Francisco-based ToyTalk, Hello Barbie uses speech recognition technology and cloud-based software to learn from its owner and get smarter the more it's spoken to. It is expected to hit the market this fall, priced at about $75.
Mattel is hopeful the doll will be a solution to years of slumping Barbie sales as it will provide girls with a more interactive experience.
So-called maker toys, or do-it-yourself toys, will be big this year as well. Jakks Pacific is introducing a "3D Character Creator," which sells for $40 and uses wax to create characters from "Avengers," "Teenage Mutant Ninja Turtles" or DC Comics.
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VTech, a leader in electronic learning products, has taken a hot tech trend among adults and created a model that allows an active kid to record his or her own activities. The result is the Kidizoom Action Cam. Think of it as a toy GoPro. Kids can mount the durable camera to their bike, skateboard or scooter to take live-action videos. Priced at $59.99 and expected to hit shelves this summer, the Kidizoom Action Cam includes a waterproof case, mounting accessories and a 1.4-inch color LCD screen to watch the videos on the go.
Toy Fair's airspace was populated by a number of unmanned vehicles, as drones are another big trend in the industry this year. The Nebula Cruiser by Odyssey Toys, contains more than 40 lights and does 360-degree barrel rolls. Priced at $129.95, it's expected to be available at Toys R US, Target and Kohl's.
However, if you are more impressed by Google's self-driving car than by drones, you may want to check out Anki's robotic battle-car racing game, "Overdrive." Players can build their own battle racecourses and drive a miniature car with their iPhones. The track uses special ink to embed information from the high-tech vehicles that scan 500 times per second to steer precisely on any track configuration. Priced at $150, it launches in September.
While high-tech toys and kid-centric consumer electronics generated a lot of attention at Toy Fair, thus far, it hasn't been the top-selling category in terms of toys. That title, at least for now, belongs to building sets. According to NPD Group that benefited 83-year old toymaker Lego: Lego Systems, the North American division of the privately held company, welcomed 14 percent growth in the U.S. last year.
While Lego is pumping out dozens of new "Star Wars" offerings in anticipation of the upcoming movie and growing an app with original content and games, the company also has new lines such as the fantasy-driven Elves, which is targeted to girls.
"Taste changes, but the core product is exactly the same as it was 80 years ago," said Soren Torp Laursen, president of Legos Americas.
And if the buzz at this year's Toy Fair is any indication, that concept is nothing to kid around about.