Toy Fair 2004

Finding Nemo card games did well over Christmas and are still in demand. © 2003 Briarpatch, Inc. All rights reserved.

The toy business has been struggling over the last year. The demise of key retailers FAO Schwarz, Noodle Kidoodle and Zany Brainy and the Chapter 11 bankruptcy filing of Kay-Bee toys are just a few of the many challenges facing the industry. Retail sales of toys in the U.S. declined in 2003, falling 3% to $20.7 billion, according to figures from The NPD Group, which tracks the toy market.

Bandai America unveiled new toys based on anime (left to right): Astro Boy, Black Dragon from Knights of the Zodiac and Aile Strike Gundam from Gundam Seed. Courtesy of Bandai America.

This difficult environment provided the context for the 2004 New York International Toy Fair, held at the Toy Center and the Jacob Javits Convention Center from February 15 to 18. Despite the shadows over the industry, however, many vendors and attendees felt the show was an energetic one, with business done and orders placed.

Even Spielberg doesnt have this: Toy Biz offers a Peter Jackson hobbit figure this year. Above, the Oscar-winning director talks to Liv Tyler on the set of Return of the King. Pierre Vinet/©2003 New Line Productions.

Licensed products were not as prevalent at the 2004 edition of Toy Fair as is often the case. But where there were entertainment-themed products, animation properties led the way, with anime in particular continuing to maintain a high profile. Bandai showed Gundam, Knights of the Zodiac (Saint Seiya) and Astro Boy toys; Playhut promoted a DVD of anime properties produced in China, including Way of the Warriors, Decheng and Bird Island; Jakks promoted its line of Dragonball Z figures; Hasbro showed toys based on TokyoPops Rave Master; DC Comics Distribution exhibited action figures based on Neon Genesis Evangelion, Lupin II and others; and Mattel introduced Shonen Jumps Shaman King and ShoPros MegaMan.

Feature Film Tie-Ins

Several upcoming films mostly vfx-heavy features had a presence at the show. Some prominent examples included the Spider-Man and Hulk sequels (with toys shown at Toy Biz and elsewhere); Harry Potter and the Prisoner of Azkaban (Mattel); Van Helsing (Jakks and others); Star Wars, in preparation for the upcoming DVD trilogy release (Hasbro); and The Lord of the Rings trilogy (Toy Biz and others). Toy Bizs LOTR line this year includes an action figure depicting director Peter Jackson as a hobbit.

Animated features on display included DreamWorks Shrek 2 and SharkTale and Disney/Pixars The Incredibles, all at Hasbro, and SpongeBob SquarePants at Mattel. The latter will benefit from the release of a SpongeBob feature film in November.

Toy displays for upcoming features included Shrek 2 (left) and Quidditch from Harry Potter and the Prisoner of Azkaban, which will be merchandised by Hasbro and Mattel, respectively. Photo courtesy of DreamWorks Pictures TM & © 2003 DreamWorks Llc. Harry Potter, characters, names and related indicia are trademarks of and © Warner Bros. Entertainment. Harry Potter publishing rights © JKR.

Exhibitors at Toy Fair traditionally have highlighted toys tied to films or TV properties for the upcoming fourth quarter or the following year. But things have changed. Most of the licenses at this show, as has been the case with recent Toy Fairs, were based on classics, sequels, films already in theaters or shows already on the air. Toy Bizs classic Spider-Man action figure line illustrates the importance of entertainment franchises versus standalone properties; in 2003, Toy Biz sold 15 million units of this line despite the fact that no movie was released that year.

Given the current business environment and the sketchy track record of recent high-profile film properties, retailers and, in turn, licensees are waiting until properties are established before they tie in. Entering the market late is not necessarily a drawback, given the right property. Briarpatch, a board game maker, introduced Finding Nemo card games over a month after the DVD release and just 10 days before Christmas 2003. The company reports that the product line is doing very well, in part due to strong demand for the property and relatively little merchandise on the market to meet that demand.

Of course, there were also some new, upcoming and TV-based properties on display at Toy Fair. Brio and Lionel showed toy trains based on the Warner Bros. film The Polar Express, for example, while HIT Entertainment licensees showed the first products based on the Nick Jr. series Rubbadubbers.

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Retro Still Rules

Retro is a continuing trend. Properties such as Strawberry Shortcake, Hello Kitty and Care Bears continued to have a large presence at the Fair. (Bandai produces toys based on the first two, while Play-Along has the Care Bears master toy license.) DIC Entertainment reports that $210 million worth of Strawberry Shortcake merchandise sold in 2003 at retail, with that number expected to increase this year as more licensees products come to market and an international push gets underway.

Another development that has been visible at recent Toy Fairs but is gaining prominence each year is the presence of multicultural properties in the toy and entertainment arenas. One of the newest entrants is Scholastic Entertainments Maya and Miguel. PBS has made a 65-episode commitment to the series, which will launch in the fall, with products following in spring 2005. Maya and Miguel joins a growing range of other properties from Nickelodeons Dora the Explorer to Homiez and Mijos figures to the ubiquitous Bratz fashion doll line that have diversity as a theme.

Several companies exhibiting at the show specialized in collectibles based on animation and vfx-driven films, with the latter often in the sci-fi realm. They included Sideshow Collectibles, featuring Hellboy, Lord of the Rings, The Simpsons and several classic sci-fi films; Rocket USA, showcasing its Simpsons and Futurama figures; DC Comics Distribution, highlighting Hellboy, Edward Scissorhands and Aliens vs. Predator; and Precious Kids, exhibiting The Pink Panther, Betty Boop, Curious George and Popeye.

Mattel made a splash with ShoPros MegaMan (left) and Shonen Jumps Shaman King. MegaMan: TM and ® are trademarks of CAPCOM CO., Ltd., © CAPCOM, Shogakukan, ShoPro, TV Tokyo 2002, 2004. All rights reserved. Shaman King: © Hiroyuki Takei 2004. All rights reserved.

Interactivity and Animation

In terms of product attributes, interactivity remains a key trend, as it has been over the last few years. This development offers opportunities for animation houses to create DVDs, e-mail clips and the like. Several companies now include DVDs with their toy lines to help create a backstory that adds to the items play value. Mattel included 22-minute DVDs with its Matchbox playsets, for example, as well as with some of its Barbie assortments. Intec was promoting a series of DVDs containing a series of animated comic books under the Marvel Digital Comic Books brand.

Hasbro featured e-mailable animated clips as part of a Website supporting Secret Central, a tween property centered around an online community. More than 100,000 registered users visit the site and receive periodic e-mails that update the journal-based storyline. Some of the e-mails have animation clips attached.

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Both Mattel and Hasbro introduced interactive television products using VEIL (video encoded invisible light) technology, which allows the user to interact with a show. In Mattels case, VEIL technology was the basis for a line of Batwave toys. The vehicles and figures in the line come to life when Warner Bros. new Batman animated series is on. Viewers can interact with the show as well, for example capturing weapons shown as part of the plot; these can be used later when playing with the toys. Crayola promoted a branded interactive TV product from licensee Technosource that allows viewers to interact with a TV screen, using a stylus, for craft activity projects.

Quiet But Productive

Overall, the show was on the quiet side. In October, the Toy Industry Association (TIA), which sponsors Toy Fair, inaugurated the Fall Mass Market Toy Expo. The autumn event attracted the largest toy buyers, from Wal-Mart to Toys R Us. These companies make their buying decisions in October for the following year, so an October date makes sense for them. Although many observers thought mass-merchant retail buyers would come to the traditional February Toy Fair as well, traffic from discounters and other large chains was light.

Yet toy specialty and other types of stores those to whom the February show is now targeted attended in force. Vendors at both the Javits Center booths and the Toy Center showrooms reported that, while walk-in traffic was down somewhat, they were busy and taking orders during the show. Many were hopeful that the business would pick up in 2004. In its state-of-the-industry report, the TIA predicted that movie-based toys, educational products and the continued growth of retro products will drive toy sales to higher levels in the year to come.

Karen Raugust is a Minneapolis-based freelance business writer specializing in animation, publishing, licensing and art. She is the author of The Licensing Business Handbook (EPM Communications).