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High-tech child's play

Soon, experts say, the real thing may be cheaper than the plaything that is designed to mimic it.

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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."

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