When it comes to technology, young children are a marketer's least discerning demographic - they are largely uninterested in bandwidth, megapixels, or thread counts. But this Christmas, tech-peddlers are turning their gaze toward kids, with new lines of grown-up gadgets built for tiny hands.
The new and aggressive marketing strategy may have Barbie shaking in her high-heeled, separately sold boots. As prices rise and traditional toys go the way of Stretch Armstrong, parents may also find cause for concern.
"There's a shift in need in terms of what a child finds fun and entertaining," says Jim Silver, editor of the toy trade publication Toy Wishes. "A lot of that has to do with the computer age. If a 3-year-old is entertained by software, the toys that might normally entertain him might not have the same value."
The fact that factory shipments for old favorites like the Barbie franchise were down 30 percent in the run-up to Christmas signals a paradigm shift for toymakers and their diminutive customers. With more money going to complex products, experts predict a third straight year of decline for traditional toy sales. The NPD Group, a marketing and sales analysis firm, says toy revenues this year through August are down 5 percent from the same period last year.
"As the world becomes more tech-savvy, children are becoming more tech-savvy," Mr. Silver says. "Technology-based toys will continue to grow and take a larger share of the market."
The declining sales are also part of broader economic trends as rising oil prices increase shipping and manufacturing costs, driving up prices on toy shelves. The toy market, however, is typically considered recession-proof based on the simple assumption that parents will always scrape up enough cash to buy at least a few toys for their children.
The real economic trend behind changing tastes for toys, market analysts say, is the precipitous decline in the price of electronics. Low-cost technology has turned items that once cost hundreds of dollars a few years ago into kids' stuff. For example, Hasbro's VCam Now gives kids a digital video camera experience for $79. So whereas toys have always imitated grown-up items, low prices have led to the creation of fully-functioning, lower-quality replicas of adult electronics. Sean McGowan, a toy market analyst for Harris Nesbitt, calls the phenomenon "the juvenilization of electronics."
"Traditional play may be in decline," Mr. McGowan says. "Toys mimic what children see in real life. As we look around the house, everything is getting consistently tech-driven."
While traditional adult gadgets are fertile ground for "juvenilization," you're still unlikely to see "Baby's First Spreadsheet Application" on store shelves. Toys will be toys, and most items this season will maintain the requisite whimsy. But despite the introduction of some interesting and inspiring new electronic playthings, some parents and child psychologists question the wisdom behind high-tech play.
"A growing concern of the preschool teachers that I'm talking to is that children are coming to preschool not even knowing how to play," says Susan Linn, a psychiatry instructor at Harvard Medical School and author of "Consuming Kids: Protecting Our Children From the Onslaught of Marketing and Advertising." "To really benefit children, a toy should be 90 percent child and 10 percent toy."
Concern that children who are not exposed to technology at an early age will be left behind are unfounded, Linn says. In fact, she cites "mounting evidence" that a significant amount of time spent in front of a screen - whether watching TV, playing video games, or even participating in educational software - is contributing to attention deficit disorder, obesity, bullying, and even poor standardized test scores.
"What's going on is what the industry calls 'aspirational marketing.' They exploit the fact that children want to be like older kids," Linn says. "If you're 12, you're being marketed products for 18-year-olds. And if you're 6, you're being marketed products for 12-year-olds. Younger and younger kids are being marketed products more intensively."
Some psychologists say today's children are essentially the same as they were a century ago. John Cerio, professor of psychology at Alfred University in New York and a practicing child psychologist, says several studies show that technology has done nothing to improve children's learning capabilities.
"The controversy is that with traditional toys, like the traditional doll, kids have to be creative and generate the conversation with the doll," says Dr. Cerio. "When you have a doll that's programmed to respond in certain ways to the child, it takes away the spontaneity and creativity of the child's own thought process. That's the piece you lose with high-tech toys versus traditional toys."
On Wall Street, where mountains of money move to the rhythm of tiny feet, toys are a very serious business. The prevailing trend of high-tech toys emulating grown-up products is elevating how much is spent on toys, despite the decline in the cost of electronics. The average price for a big-ticket item this Christmas is $53, McGowan says. Last year, the hottest toys sold for about $40. Such a dramatic price shift may backfire on toy companies.
"It doesn't feel like the kind of year where consumers are going to embrace that kind of percentage increase," McGowan says. "I don't know which one of those products is going to be a bestseller, but I can guarantee you someone on that list is going to be disappointed."
Another pitfall for toy companies that "juvenilize" products: Adult products will soon be cheap enough to give to a child instead of a toy. Hasbro's "ZoomBox" is essentially a cheap video projector that is made and marketed for children. This $299 "toy" lets kids project and play video games on blank walls. Another example is Hasbro's $99 imitation cellular phone called "Chat Now." Despite its flip-phone fanciness and built-in black-and-white camera, Chat Now cannot actually place a telephone call.
"Kids know the difference between a cellphone and a walkie-talkie as soon as they go to make a phone call," McGowan says. "You give this to an 8-year-old and he'll say 'Nice try, but I want the real thing.' This one might sell this year, but next year the real one's price might be so low, why not just buy the real thing?"
Toy Wishes Magazine makes annual predictions of the most popular toys for the holiday gift-giving season. Its "Holiday Hot Dozen" this year includes (in alphabetical order):
Black Belts Karate Home Studio (Spin Master, 3 years & up, $24.99) A complete karate studio that helps younger kids learn the basics of karate.
Dora's Talking Kitchen (Fisher-Price, 2 years & up, $79.99) Kitchen play set designed after Nickelodeon's "Dora the Explorer."
Fly Wheels Assortment (Jakks Pacific, 8 years & up, $4.99-$39.99) This new assortment lets kids add stunt ramps, rapid fire launchers and change the wheel size on the original Fly Wheels remote-controlled car.
Furby (Hasbro, 8 years & up, $39.99) New and improved, this furry friend comes with facial expressions and voice-recognition technology.
I-Dog (Hasbro, 8 years & up, $29.99) This robotic dog features iPod stylings and responds with lights, sounds, and movement to whatever music you play.
iZ (Zizzle, 5 years & up, $39.99) By plugging a music player into this alien creature, children can manipulate the sound by turning its ears and flicking its antennae.
Leapster L-Max Learning Game System (LeapFrog, pre-K through 4th grade, $99.99) This hand-held educational video-game lets kids develop and reinforce skills in language, math, logic, writing, and spelling.
The Magnetix World (Rose Art, 6 years & up, prices vary) This city building set has more than 100 pieces, including magnetic rods that snap together.
Pixel Chix (Mattel, 7 years & up, $29.99) As 2-D animated characters appear on screen inside their own 3-D houses, the Pixel Chix can play different games, change fashions, and more.
Shell Shocker (Tyco, 8 years & up, $79.99) This high-powered vehicle can morph into a "cyberball" or a "cyberbeast" on the fly.
Vcam Now (Hasbro, 8 years & up, $79.99) Make movies and take pictures with this versatile and very real video camera. Record up to seven minutes of video or take as many as 480 still pictures - or more, since its memory is expandable.
V.Smile Pocket (VTech, 5 years & up, system $89.99, games $19.99) This is a hand-held version of the V.Smile video-game learning toy that kids can take with them or connect to a TV for on-screen play.