The toy industry was born in the industrial age, but now it is moving into the digital age., according to toy commentator Richard Gottlieb. He was speaking today at a panel in Engage!Expo, a conference on virtual worlds. Gottlieb is president of Richard Gottlieb & Associates and runs a blog, Out of the Toybox.
Toy Making Shifts From Germany to United States
Gottlieb explained that early toys were mechanical toys and for that reason, Germany-- which was highly adept at making mechanical objects-- became the center of the toy industry in the late 19th century to early 20th century.
World War I, however, put an end to that as the United States embargoed German goods. With no toys coming into the U.S. from Germany, the toy industry grew rapidly. After World War II, soldiers returning from the war further expanded the toy industry.
Videogames Enter the Scene
A significant moment for the toy industry was in 1974 when the founder of Atari came to toyfair and tried to sell his new toy, Gottlieb said. "They sent him packing, saying it wasn’t a toy. As a result, another industry was created."
Since Atari opened up the era of computer games, the computer game industry has been eating the toy industry’s money every year. Last year, the toy industry was down by 3% while the game industry was up 40%.
Shift in Toy Industry Towards Virtual
These days, almost every toy has a virtual element. Most toys have websites-- not just websites that explain the product, but have some sort of interactive element. For instance, Tracksters are toy cars that can be bought at stores, but you can also go online to race your car. In order to vamp up one's online car, one has to earn virtual money by working in a car factory, or going to school.
Webkinz are another successful example of integrating online play with offline toys. The toys are plush, stuffed animals, but have a unique code that translates into a virtual pet which one can take care of online in Webkinz World.
Toy companies, however, must be careful in how they "evolve" their toys, said Sean McGowan, managing director at the research firm Needham & Co. Also speaking at Engage! Expo, McGowan pointed out that Furby 2 was almost twice the price of Furby the original, but it was not that much more fun. "The point is not about providing a toy, but giving joy. The toy industry has to be a joy industry; they need to know what they're selling," he said.
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