Sunday, November 06, 2005

Negotiating the terms of surrender.

As we increasingly play by the rules of machines, will our children lack the creativity to exist in any other realm?

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As gadgets replace toys, what's in it for kids?

By Michael Barbaro
International Herald Tribune.

FRIDAY, OCTOBER 14, 2005

NEW YORK Bratz, a line of dolls whose curvy figures and up-to-the-minute fashions have turned it into a $2.5 billion global brand, has discovered a threat even bigger than Barbie: Members of the first generation to embrace Bratz, which reached the market in 2001, are preparing to abandon Cloe, Roxxi and Sasha this holiday season in favor of - what else? - an iPod.

But instead of giving up on the girls who turned Bratz into a blockbuster, the dolls' manufacturer is aggressively chasing after them, not with bigger and better Bratz characters, but with digital video cameras and MP3 players. "We don't look at ourselves as a toy company," said Isaac Larian, chief executive of MGA Entertainment, the private company that owns Bratz. "The toy market, to be frank, is just shrinking."

Having failed to beat the electronics industry, the ailing toy business will join it in a big way in the year-end holiday shopping season, offering just about everything from cellphones for 6-year-olds (LeapFrog) to video projectors for 8-year-olds (Hasbro) in an effort to hold on to children who are casting aside Lego and GI Joe to play with their parents' gadgets.

If the strategy succeeds, the toy business may find a way out of a stubborn financial decline. Retail toy sales dropped 3 percent in 2003 and again in 2004 amid brutal price wars between Toys "R" Us and Wal-Mart Stores, and industry performance is already down 5 percent this year, according to NPD Group, a market research firm in Port Washington, New York.

But the push to sell consumer electronics to preteens is touching off an animated debate about whether the products qualify as toys, as manufacturers contend, and whether it is wise to break down one of the last barriers between children's play and adult technology.

For decades, toy makers have designed products that allow children to mimic adult behavior, but it was, in the end, always make-believe.

No matter how many electronic bells and whistles the latest toy truck had, it was still a toy. But with the latest crop of electronics for children 6 to 12, there is little pretending. The adult's product and the child's are often one and the same.
"There is a whole muddling of what it means to be a child," said Gary Cross, a professor of history at Pennsylvania State University and author of "Kids' Stuff: Toys and the Changing World of American Childhood."

Referring to this year's electronics, Duncan Billing , chief marketing officer at Hasbro, conceded, "It's tough to classify them as pure toys."

Critics of the trend say high-tech gadgets offer a limited range of activities - like taking a photo, or making a phone call - and most are designed for an individual, rather than a group, reducing their value as a tool for teaching children how to share and solve problems.

"Too much technology in a toy reduces time spent developing the social, personality and character skills needed for life," said Marianne Szymanski, creator of Toy Tips, an independent research firm based in Milwaukee.

Toy companies have waded into this debate before, with television sets, clock radios and CD players, but the technological complexity of the latest products and the age groups being sought are expected to turn this holiday season into a major test for the emerging children's electronics market.

"This is the year when we will see what works and what fails," said Anita Frazier, who tracks the toy industry for NPD Group.
For the first time, Disney is selling its own line of digital audio players, called Mix Sticks, for children 6 and older. The $49 gadgets allow users to download music from the Internet or copy it from a CD.

Mix sticks, which come in colors like Forever Princess (translation: pink and purple) and Tinker Bell (purple and green) have less than a quarter of the memory of the iPod Shuffle, which holds 120 songs.

Hasbro, which gave the world GI Joe action figures and Tonka trucks, is marketing a product called Vcam Now, a $79 digital video camera aimed at children 8 and older that can snap still photos or make short movies. Zoombox, a $299 portable video projector with a built-in DVD player, from Hasbro, can display images on different surfaces. Hasbro's I-Dog, a $29 MP3 accessory that is already regarded as one of the season's hottest products, wiggles in response to music and doubles as a speaker for a digital audio player.

Not to be outdone, Mattel is marketing its own digital video camera for so-called 'tweens, or kids roughly 8 to 12 years old. Vidster, Mattel's $79 camera, can capture as much as 10 minutes of footage that can be played on television and edited with what the company says is simple software.

And, yes, there are cellphones. Mattel collaborated with a wireless consulting firm, SingleTouch, to create a prepaid cellphone for girls 8 to 14 that has already won the nickname "Barbie phone." LeapFrog Enterprises, an educational toy company, teamed up with another wireless company, Enfora, to release TicTalk, a phone for children 6 and older. TicTalk, which retails for about $100, is filled with LeapFrog games and traditional cellphone features like a stopwatch and a speaker phone. But because the phone is intended for about a 6-year-old, users can only call friends approved by a parent.

The introduction of so many similar products in one season is no coincidence. Sales of children's electronics, a fairly new category, rose 40 percent in 2004, to $694 million, NPD said, helping to explain why toy retailers will begin to resemble electronics stores over the next two months.

"There is a whiff of success," Frazier of NPD Group said. Success is not a word often heard in the toy industry, which has witnessed the bankruptcy filings of retailers like FAO Schwarz and KB Toys.

The electronics strategy is risky for toy makers, though. Profit margins on consumer electronics are slim - and the problem extends to electronic toys, said Larian, who oversaw the creation of the Bratz technology line. And while consumers may dash to the local toy store for the latest iteration of Elmo, they tend to wait, rather patiently, for prices to fall before adopting new technologies like DVD players and digital video recorders.

"There isn't an industry where product prices come down faster than consumer electronics," said Sean McGowan, an analyst at Harris Nesbitt.

There is also the possibility that children will pass up the kid-friendly version of digital audio players and cellphones and head straight for the adult version, a trend that analysts are already seeing with PCs and laptops.

Amber Eldridge, a 10-year-old from Atlanta, is transfixed by advertisements for the iPod and wants the real thing "so I can take my music with me."

Still, retailers are piling the new products high this year and wrestling with how to market the new category.
McGowan, the Harris Nesbitt analyst, said the introduction of consumer electronics for children would ultimately hurt the toy industry by encouraging children to leap from Elmo right into their parents' digital lifestyle - and bypassing toy stores on the way. "It may be a boon for electronics retailers, but not for toy sellers," he said.

John Barbour, president of Toys "R" Us, sees the matter differently. "You don't see a lot of kids at Best Buy," he said. "Toy manufacturers can make these products at a price parents will tolerate even if kids break them."

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