Affordable toys to resonate this year

Mae Anderson

October, 2008 — As parents grapple with shrinking retirement funds, a shaky job market and inflationary pressures, high-priced holiday toys such as Hasbro Inc.'s $300 robotic Kota the Triceratops from Playskool and $249 Ultimate Wall-E robotic dolls from Thinkway Toys might suddenly give them a bit of sticker shock.

With this in mind, retailers and makers are emphasizing more affordable toys this year amid a deteriorating economic environment.
Hasbro, for example, offers smaller animatronic animals, including a newborn chipmunk and a puppy that rolls over for a more affordable price of $40.

And two toys that have been receiving much industry buzz — Spin Master's Bakugan and Techno Source's Clickables Fairy Collections — have components that start at about $5 and $6.

Retailers such as Wal-Mart Stores Inc. and K-B Toys Inc. have focused on promotions as well, offering toys for under $10.

"I think there's going to be a lot more promotion of lower-price toys," said BMO Capital Markets analyst Gerrick Johnson. He said that while there are more high-priced toys offered this year compared to last year because of the lengthy development schedules toys require, that will likely not resonate with shoppers.

"I've seen in stores a lot more people trading down to lower-priced items," he said. "High-priced items aren't going to perform as well as they have the last couple years."

He added that parents will likely study how long children's interest will last in toys, particularly higher-priced items such as Jakks Pacific Inc.'s $80 night-vision goggles and Mattel Inc.'s $60 Elmo Live interactive doll.

"Parents are willing to shell out more if they know the 'play value' is there," he said. "They'll buy a $50 video game because they know kids are going to play that out for months."