Looking for this holiday season’s it-toy? Then it’s time to get smart.
That may not be as simple as it sounds, considering the new cadre of characters buzzing and whirring their way on to wish lists.
The big add-on this year isn’t accessories – it’s personality. (Some even talk back.)
As technology spills over into the toy market, manufacturers have moved light years beyond simple battery-powered fare and into the cloud, using the same tech that powers your smartphone. And as toys grow more like other gadgets in our lives, privacy concerns follow.
Front and center is the category known as “toys-to-life.” The Skylanders franchise, published by Activision, has dominated this category after pioneering the concept of making a video game that works with real-life figures. When connected, the figures can summon a character to life on the screen. Over time, the toy will remember each action it’s taken in a game, essentially growing smarter with every use – and offering more personalized play.
From the first prototype, Activision knew it was on to a winner.
“Everybody’s jaw dropped,” said Josh Taub, a product management executive at Activision. “Instantly, everybody knew that it was something magical.”
It took three years to move the idea from prototype to market. To date, Activision has sold more than 250 million toys, created 300 characters and made $3 billion in revenue, he said. Skylanders has also been the top-selling video game franchise for kids – and the top-selling maker of action figures – for three years running.
This year, it’s fair to say, its crown is threatened as Disney, Lego and Nintendo move in.
Think of it as a dogpile in aisle four, where the full menagerie of characters owned by each company duke it out for market dominance: So there’s Yoda, Elsa, Bart and Batman and Scooby Doo, Gollum and Mario, Doctor Who and the Wicked Witch, too – all now reinvented for toys-to-life play.
“There’s definitely room in this market. It’s become a $4 billion category in a short time,” said Laurie Schact, publisher of toy review Web site Toy Insider Mom. “I think there’s room for all of these players, each one’s got a different appeal.”
The games cost $75 to $100, and each starter pack tends to come with two or three action figures. For some, that will be plenty to have a good romp. To add new personalities and dimensions to a game, additional figures cost less than $10.
“Parents like getting a lot of bang for their buck, and they do with this,” Schact said.
The average family spent $131 on these smart toys, according to a May survey by the NPD Group research firm that looked at the previous six months. And new product launches sent sales in the category up 160 percent this fall compared with a year ago.
“The companies in this market are likely taking a longer view beyond this holiday,” said Liam Callahan, an analyst at NPD Group. “I foresee many years of potential character introductions, especially if they are tied to popular movies in the case of Lego Dimensions and Disney Infinity.”
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Smart toys extend beyond these smart figurines, however. If you don’t want to drop your toys into a video game, you could opt to step into one yourself. With its Playmation toys and an app, Disney and Hasbro let kids don the armor of Iron Man and run missions in their homes. They get orders from a tablet or smartphone, then set off on an adventure with the help of connected smart hubs placed around the house to complete each mission.
“It’s a video game that you’re playing out in real life and you get to be Iron Man,” said Jim Silver, editor in chief of the toy review Web site TTPM.
Silver said Playmation represents a new chapter in a long history of role-play oriented toys – first, action figures, and then items such as Lightsabers or the Spider-Man web shooter.
“These role-playing toys allowed you to become closer to making believe you’re that hero,” Silver said. “Now, Playmation is taking it to another level where you’re actually acting out being that hero.”
Companies are clearly excited about being able to incorporate meaningful technology into toys. Adrienne Appell, a spokeswoman for the Toy Industry Association, said she thinks this toy genre has gotten so much traction because manufacturers have finally figured out how to add the technology in a way that actually enhances the play experience.
“A couple years ago, it seemed as if everybody had an app toy,” Appell said. “Some of them were fun; some of them were not so great.”
“Just adding some sort of electronic component doesn’t mean that it’s going to be fun,” Appell said. Silver said that interactive toys have become more life-like as animatronics have improved and as the cost of chip technology has come down – meaning that the category is poised to grow and get more advanced.
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The smartest of the smart toys this season may be Mattel’s Hello Barbie, which talks back – in the best way possible, that is. Pushing a button on Barbie’s belt prompts her to register what a child is telling her. Then, thanks to the power of the Internet, she’ll process what is said and get a conversation going, for up to an hour, or longer if she’s plugged into her charging base. An actress has recorded 8,000 lines as Barbie, and an algorithm powers the speech analysis that helps the doll respond appropriately to those darndest things that kids say.
Barbie also comes pre-loaded with good manners: She will redirect inappropriate conversations. And she will not repeat curse words.
Even so, this toy, especially, has roused a larger concern parents may have this season as they stand in front of a line of smart toys: privacy.
“There are some pretty strong feelings on both sides,” said Stephen Balkam, executive director of the Family Online Safety Institute (FOSI) – a nonprofit that counts Google and Facebook among its funders and is dedicated to providing parents with information about new connected technologies.
At first blush, having a Barbie that’s recording your child’s speech may seem like a step too far – even in a world where consumers are giving over tons of information to tech firms such as Google, Facebook and Apple.
The toy manufacturers know that when it comes to kids, the products that sell best must have a wow factor with just the right optics: nothing dangerous or untoward or creepy allowed.
Oren Jacob’s company, ToyTalk, worked for a year with Mattel to provide the interactive technology for Barbie. The chief executive said that both firms have taken pains to make sure that parents have as much information as possible about what data are collected and how it’s used.
“The philosophy of all our products is to put parents in control of all the data we use,” Jacob said. “Parents have access to all the things that the child says to Barbie, and that Barbie says to the child.”
Parents who buy the toy are given access to a password-protected site where they can listen to their kid’s conversations; those recordings are kept for up to two years, but can be erased at any time, Jacob said.
And no conversation with a child will ever be used to target advertising, per the promises of the manufacturers. “The conversations captured by Hello Barbie will not be used to contact children or advertise to them,” Mattel said.
In most cases, no one is actually listening in with Barbie – that’s done largely by computers. Occasionally, Jacob said, the system will flag sound bites that stand out, perhaps because a child has a speech impediment or accent that the algorithm can’t parse; if any personal information gets caught up in those recordings, the sound bites are deleted immediately and the companies notify the parents.
Jacob said that he understands there’s some uneasiness around smart toys. And he encourages parents to research the extent to which data are collected – and to ask why.
“As a parent myself, there are things that I consider,” he said. “Parents should ask what is the reason for its being connected – does it make the play experience more meaningful? And is [data collection] being communicated clearly by the person collecting it?”
Balkam said he thinks ToyTalk has been thoughtful about how it handles data – and, importantly, is very clear about what it will and won’t do with your information. But, he said, as toys get smarter and collect more information, there will be new challenges.
“What if Barbie overhears domestic violence?” he said. “Will police start to subpoena these records? Or what if kids are in step-families, or in foster care? Who gets access to those recordings? These questions will start to emerge more often – Hello Barbie is just one in a galaxy of toys on the market,” he said.
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Privacy is one thing, but what about good old-fashioned play? Some parents may also question how smart it is to let their kids play with smart toys. Isn’t the point of play to make things up on your own, after all?
The jury is still out on how, exactly, tech use and smart toys may affect creativity. A recent report from FOSI showed that parents believe that using technology makes their children more creative. Sandra Russ, a Case Western Reserve University professor who’s researched the link between play and creativity, said she doesn’t see an inherent problem with incorporating tech into play time, as long as there’s room for creativity.
What she does worry about, however, is that we’ll see a further decrease in the time kids spend in free-play – unguided activity that’s linked to higher creativity later in life.
At the end of the day, parents shouldn’t fear connected toys, Balkam said. But they should be asking questions about what’s right for their own children. And, Russ said, parents may also want to think about making sure there’s some unplugged playtime, too.
“I think it’s fine to have a story stem or something where kids can make up a lot by themselves,” she said. “If it’s highly mechanized, it’s not helping creativity that much.”
Kids play with the toys on- and off-screen – a May survey of parents found that around 22 percent of play time was without the video game, according to the NPD Group. (It also found that many adults also collect or play with the interactive toys.)
At a moment where many parents are concerned about kids spending too much time in front of screens, toys-to-life offerings, for instance, create a hybrid play experience that makes many of them feel more comfortable with buying yet another video game.
“Parents don’t always like that on-screen experience,” Schact said. “And one of the things that we saw in the first year that this launched with Skylanders is that these kids were playing with the toys offscreen.”

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