Toy Industry Tries To Revive Old Magic Manufacturers, Retailers Seek Next Hit

What will be the hot toy of 1996? You might as well ask what the meaning of life is - you’d probably have an easier time coming up with an answer.

But that’s the big question on the minds of manufacturers and retailers gathering in New York for Toy Fair, the toy industry’s annual trade show.

“We’re starting from a blank slate this year,” said John Taylor, who follows the toy industry for Arcadia Investment Co. in Portland.

Or, perhaps, a blank Etch-A-Sketch screen. The only sure bets are that traditional toys like Etch-A-Sketch, Mr. Potato Head, Barbie and G.I. Joe will do well this year, especially if no toy emerges as a megahit along the lines of Power Rangers or Teenage Mutant Ninja Turtles.

“You’re going to see in terms of the basic toy business, a continued classic orientation, and even a retro orientation,” said Gary Jacobson, an analyst with BT Securities in New York. He noted that one of the feature films being released this year is “Flipper,” based on the 1960s TV series. And Transformers, which have been out of Hasbro Inc.’s domestic lineup for several years, are being reintroduced to a new generation of children.

But movies, which have generated billions of dollars in sales of toy tie-ins in the past, may be of relatively little help this year. This summer’s Disney animated film is “The Hunchback of Notre Dame.” It’s hard to know at this point if the story of Quasimodo can lend itself to the kind of toy hits that “The Lion King” spawned.

“It doesn’t look like a really robust movie season,” Taylor said.

The toy business did well in 1995, but it wasn’t a gangbusters year. Power Rangers action figures, the gotta-have toy of 1994, lost their momentum by the summer. Video games didn’t cause any stampedes of buyers although there was more sophisticated hardware for sale.

One of the great thrills - and heartburn producers - of the toy industry is that no one knows what toy will click until it’s actually happening. And often when there is an unexpected big hit, it’s a small company that has it. Hasbro and Mattel passed up the Ninja Turtles when the toys were being shopped around in the late 1980s, thinking they’d never sell, let alone turn into a billion-dollar megahit. Playmates Toys Inc. lucked out.

If there is a winner, Taylor said, “It probably won’t be till sometime this fall before we figure out what that’s going to be.”

One segment of the toy business that analysts do expect to grow this year is what’s known as electronic learning aids, or ELAs, interactive toys for preschoolers. Taylor called ELAs marketed by Vtech Industries Inc. “hotter than a pistol.”

Big toymakers are getting into ELAs, but often by licensing agreements. Tiger Electronics Inc. makes ELAs for Hasbro’s Playskool division and also sells learning toys under its own brand.

Manufacturers are also trying their hand at computers, which now compete with traditional toys for children’s time as well as parents’ money. Many toymakers will be showing CD-ROMs at Toy Fair. Some are educational, but others are games based on already successful toys.

Several companies are trying to sell kids’ version of a PC. But Taylor questioned whether a computer for children will succeed, particularly when families are able to buy relatively inexpensive PCs at computer stores.