Electronic toys lose some Christmas glitter
The novelty has worn off. This is the year toymakers have to come to grips with the real world. Electronic games -- games that use computer chips -- made twice as many Christmas presents last year as the year before, and had doubled from the year before that. Demand was so high last year, in fact, that toymakers couldn't keep shelves stocked at toy stores, and prices went up.
That situation led to a case of swolen expectations, according to financial analysts of the toy business. Electronic toys look so attractive to manufactures that, as Parker Brothers president Randy Barton says, "Everybody's leaping into the marketplace."
But the consumers aren't there to catch them.
Demand is still mushrooming, up between 15 and 50 percent from last year by different analysts' accounts, and electronics is still the blue-chip area that has revolutionized the gamemaking business in the last few years. But this healthy growth rate is still less than a quarter of ast year's, so it comes as something of a splash of cold water on high industry hopes.
Last year it was the more affluent set, explains Doug Thomson, president of th Toy Manufacturers Association, that bought electronic games, generally more expensive than other toys, for their children and for themselves. For them, the novelty of the games made them prestige items.
This Christmas season, however, the shopping public is used to the idea of games with silicon memories, Mr. Thomson says, and the toymakers face a more discerning consumer -- one who will have to be convinced of a game's value before spending $25 to $60 on it.
Some in the industry believe customers may well return to traditional toys as presents this Christmas, partly because such toys are cheaper, partly because the blush of novelty is off the electronic rose.
Electronic games were first introduced in 1977, although last year was their first year for major acceptance by the public. The newest development in the field is the game that talks. "Milton," a new one by Milton Bradley, has around a hundred words in its vocabulary.
For the consumer, Thomson compares last year's electronic games market to buying calculators five years ago: "Just when you think you've got the latest thing, someone else gets a better one." Being "the first on your block," as one analyst puts it, will no longer sell games.
Electronic games are like calculators in another way, too. The euphoria associated with hyper growth attracts newcomers to the business.
There is much talk in the toymaking business this year of "me too" products. Milton Bradley's "Simon," for example, was the biggest selling toy in the industry in 1978, according to Vic Raskin, an analyst with Dean Witter Reynolds. Then in 1979 it competed with seven or eight "knockoffs" -- that is, games modeled from it and changed just enough to be legal.
This year has seen a flood of these "me too" products saturating the market. Many of them are made in Hong Kong, the world's foremost toy exporter. Altogether some 300 electronic games are on the market this year, compared with around 100 last year, according to Mr. Barton of Parker Brothers.
"A lot of people are going to get burned," Barton says. And it's generally agreed that it is the latecomers and the "knockoffs" that will get stung hardest , while the major American firms like Milton Bradley, Parker Brothers, Mattel, and Coleco are best positioned to weather a disappointing season.
Wo reasons the front-runners will stay there: game concepts and marketing. Milton Bradley of Springfield, Mass., the leading electronic-game maker, is spending around $17 million on research and development this year, according to Vic Raskin. They used to spend around $2 million a year. And both Milton Bradley and Parker Brothers are aiming their heavy advertising artillery at the electronic game market.
The result is that at toy stores the children, bombared with TV commercials peddling electronics, often run first to the games that use computer chips. But the parents, no longer so fascinated themselves and more price conscious, steer toward the traditional.