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Discount Store News, Feb 5, 1996 by Laura Liebeck

NEW YORK - The hottest thing in toys this year may well be the newly coined "compu-toys," a category launched last month by partners Compaq Computer and Fisher-Price.

Compu-toys combine the attributes of a computer game with the playability of brightly colored plastic control accessories. They provide kids ages 3 to 7 years old with a learning aid that introduces them to real computing. (See story on page 55.)

"We're going to bring the best of what we know in toys and they [Compaq] in computers and create a whole new experience through this medium," said Byron Davis, president of Fisher-Price Toys, a division of Mattel. The new toy line is called Wonder Tools, and the lead item in the program is the Wonder Cruiser, a dashboard-like product with a steering wheel and a joy stick.

"It's a peripheral for a computer that makes it easy for a child to work with a keyboard," he said, noting that the dashboard is plugged into a "y" connection so that it can be used by the child without having to replace the family keyboard for adult computing.

Davis said that Fisher-Price will seek out other alliance-type programs. "We feel this is a real nucleus that we haven't even taken to the next level," he said.

Such a joint effort between toy and technology-based companies could hold promise for other firms and revolutionize the toys business.

Compu-toys are a direct outgrowth of the educational learning-aid category, which burst onto the market several ear ago, quickly gaining wide acceptance with parents.

In the intervening years, ELAs have become a strong category for retailers, one that has brought interactivity to the toys department at the mass merchandiser level and has created excitement in the stores.

And excitement has surely, been lacking in the past year.

Christmas 1995 failed to draw in the crowds and ring up the bales that put smiles on retailers' faces. There was no blockbuster like Power Rangers or Cabbage Patch to excite the masses, although there were some strong performers such as Mattel's Holiday Barbie and Baby Tumbles Surprise by Toy Biz. In fact, Holiday Barbie was the only toy this year to report a sellout. According to Mattel, the dolls are currently in production and will be available again in March or April for about $30 retail. Toy Story spin-offs, based on the blockbuster Disney movie, recorded spectacular sales, but were in very limited supply during the critical toy-buying period.

Other popular properties for Holiday included Batman and Pocahontas, Baby So Beautiful, Sky Dancers, Fisher-Price's Pirates Ship and Castle, Street Sharks and such basic toys as Slinky, Mr. Potato Head and Etch-A-Sketch - thanks to "Toy Story" - Lego, the Barbie line, Matchbox cars, board games and arts and crafts products.

According to Marianne Syzmanski, president of Toy Tips, Milwaukee, a toy-testing company, some of the top-performing toys with kids included Milton Bradley's Chicken Limbo game, Step 2's The Make-Believe Theater, 3-in-1 Activity Tunnel by Little Tikes, Sega Nomad, the Sony PlayStation and Batman Forever action figures.

This year, manufacturers and retailers alike are hopeful, looking for such hot licenses as Toy Story, Hunchback of Notre Dame, Superman, Sailor Moon, Sesame Street, Space Jam (soon to be a Warner Bros. motion picture release starring basketball great Michael Jordan and the Looney Tunes characters), Dragonheart and Flipper, among others, to pull up sales during the critical fourth quarter.

"We're hoping to discover some hot new products since they were lacking this Christmas," one retailer said. "We'll be looking for strong items and concepts. It may sound simple, but that's'it."

For 1996, this retailer expects Toy Story to strong property especially after the expected fourth quarter release of the home video. In addition, Bananas in Pajamas and Sailor Moon should also do well this year.

Sailor Moon, a DIC property, is a quasi girls' superhero imported from Japan. The TV show is now in syndication and Bandai has the master toy license.

This year, perhaps more than in previous years, retailers will be more excited about the potential of the annual Toy Fair, to be, held Feb. 12 to 19, in New York. Manufacturers, too, are eager to present their wares, even if many have been more closed-mouthed than usual about upcoming introductions.

Since toys have become so dependent on strong licensed properties to drive business, manufacturers and retailers alike are left more vulnerable to the vicissitudes in the market. Either a license has a strong appeal to kids or it doesn't and it appears that predicting a winner is getting harder. This predicament has become good news to manufacturers of basic toys, even though it also puts pressure on them to infuse more creativity into their lines.

After a tough 1994, Lego reported that 1995 sales were very good. Its lead items were Acquazone, Duplo Baby (launched last year), Castle Launch and Freestyle. This year, Lego is expanding its Duplo Baby line by introducing several new themes: Watter Park, complete with baby whales, penguins and polar bears; Wild West; Explorien Starship, a space-theme set; and Time Cruisers, a combination of various themes based on time travelers, explained Dick Garvey, vice president of marketing.