NEW YORK - To understand the economics of fun, you'll want to visit the 95th American International Toy Fair this week in New York City.
A carnival atmosphere prevails on the sidewalks along Broadway in the city's Flatiron District, with Mario of Mario Brothers fame mingling with passersby, the Nabisco Cool School Bus parked on a side street, and a stilt-walker vying for attention with the guy handing out fliers for Flash Dancers Adult Entertainment Bars.
But inside the handful of toy showrooms that house the fair, the mood is dramatically different. Here, talk of packaging, promotions, price points, and point-of-purchase displays dominates.
Some 20,000 toy buyers from 50 countries have descended upon the city to determine which toys will turn the most profits in 1998, and they mean business. Last year, toys racked up US$22.5 billion in retail sales, according to the Toy Manufacturers of America, which organizes the fair. This week, buyers are looking for the successor to Sing 'n' Snore Ernie, Beanie Babies, and Tamagotchi.
"The next big toy may come from an established toy company, or a small manufacturer with a very big idea," said Gary Baughman, the CEO of Fisher Price and chairman of the Toy Manufacturers of America, during a morning press conference. "That's what keeps this industry so electric," Baughman said, adding that 1997 saw a 7.8 percent sales increase over 1996 and a drop in manufacturing prices, thanks to weakened Asian currencies.
While electric might describe the blinking, beeping displays that the 1,695 exhibitors have set up here, the attitude of attendees is far more businesslike.
Toy buyers come armed with detailed battle plans listing their appointments with sales reps, and they crowd elevators, taxi cabs, and shuttle buses as they race from one showroom to another. In closed-door meetings, the buyers cut deals with sales reps - specifying the number of units they'll accept, with price discounts offered for contracts signed on the spot.
And while buyers are plied with free food, drinks, and toy samples, it?s rare to find a single kid in any of the Toy Fair showrooms - this eight-day trade show is for professionals only.
Power Rangers in Space
Bandai's showroom was typical of the industry's major players, who spend as much as $5 million on their set-ups. Toy buyers exiting the elevator walked into Bandai's waiting area, where they were greeted by a receptionist who checked to see that they had appointments. Buyers were invited to rest on a comfy gray couch, and a countdown clock ticked off the seconds until the next showroom tour began.
Eventually, the group was allowed in - to a series of sales pitches. In the first, a pair of temporarily employed actors played "Power Rangers in Space" toys. Former Apollo astronaut Pete Conrad was on hand to endorse the new toys, which feature a tie-in with NASA. "We're hoping that space joining the Power Rangers will be great for kids," Conrad said. (Other celebrities shilling for toy companies today included Tom Hanks and Joe Namath.)
A big emphasis in each presentation is the marketing dollars that will be spent pushing each line of toys. For Bandai's Power Ranger line, that means 25 percent more ad dollars than last year, the NASA tie-in, a touring "virtual reality" simulator ride, and a sweepstakes.
Other sections of Bandai's showroom were devoted to the Tamagotchi toys, including a new product line called Digimon (think "digital monsters") targeted at boys; the BeetleBorgs; and the Mystic Knights of Tirna Nog, toys that accompany a new TV series airing on Fox this fall.
Toy buyers were led through a darkened hallway illuminated by flickering torchlight, seated in a faux-Medieval dungeon, complete with a drawbridge-like set and stone floors, then shown a brief clip of Tirna Nog. "Now that you've gotten a taste of the show, we'd like to move on to the product," one of the presenters said, quickly segueing into a demo of the weaponry associated with the program.
Robots for kids
Much of the early buzz at the show has centered around Lego's new MindStorms product - a kit that lets children design their own independently functioning robots, which they program using a PC that downloads instructions to the robots via an infrared link. "For $200, you get a kit that contains 700 different pieces," explained John Dion, the public relations manager for MindStorms. "It works with all the existing Lego blocks, and you can download project ideas from the Internet."
Displayed toys built with MindStorms included basketball-playing robots, card-shuffling robots, robots that imitated the Mars Rover, and robot intrusion alarms. Like many of the new toys at the show, MindStorms won?t hit stores until autumn in an attempt to become this year's big Christmas hit.
Almost every showroom, it seemed, featured Star Wars toys under license from Lucasfilms. These toys are expected to see a huge resurgence in sales as the new trilogy comes to theaters next year. Hasbro even had presenters costumed as Luke Skywalker and Han Solo giving buyers a spirited preview - complete with Wookiee impersonations - of the new action figures and their vehicles.
While much of the action at Toy Fair is focused on the two largest toy makers present, Hasbro and Mattel, smaller companies and individual inventors are also given an opportunity to showcase their wares through the Toy Manufacturers of America's Incubator program.
Bill Stawski brought his Cash University product to the Fair in the hopes of finding a partner like Intuit or Microsoft to license his money-management system for kids and turn it into a hit CD-ROM. A former stockbroker, Stawski decided to develop a product that teaches kids financial literacy after seeing how his own children regarded money: "They thought money came from either the checkbook or the ATM," he said.
"This is where innovation in the toy industry comes from," Stawski said. "Not the big companies, but the hungry young start-ups."
But the hungry young start-ups have the same hopes in coming to the Toy Fair as their bigger competitors: they want to transmute fun into money. James Wirt, the president of Tekky Toys, was demonstrating a prototype of his Hip Hop Teddy Friend, a stuffed bear that recites a rap that includes its owner's name. ("The Latest in Affordable Interactive Toys," reads the brochure.)
Says Wirt, a lifelong toy inventor: "I'm here with the hope that some guy will walk through that door and say, `Give me 50,000 units.'"
On Thursday, the Toy Fair expands to the cavernous Jacob Javits Convention Center, where despite a 25 percent increase in space from last year, all the available booths have sold out. "And there's a two-year waiting list," said Stawski.
Business, for the world's manufacturers of whimsy, is clearly booming.
