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January 2004 | Vol. III - No. 1
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NPD Reports Electronic Toys still Top Kids? Lists

In recent years, microchip technology and electronic features have had a major impact on the toy industry, to the point of ?creating? new toy categories and trends.  According to industry research firm NPD Funworld, trend-makers include:

Furby, the #1 ranked toy in 1999.  This interactive plush toy was a huge success, outselling the next ranked item more than twofold, and had people lined up at toy stores early in the morning to get the latest variety.

Interactive/robotic playmates and pets (for example Poo-Chi the robotic puppy, #2-ranked traditional toy in 2000).  This trend peaked in 2000 and included a wide variety of creatures, such as puppies, kittens, birds, bugs and battling robots, accounting for approximately $240 million in retail sales in the peak year. 

? In recent years, electronic learning toys have been a major growth category.  For example, Leapfrog´s LeapPad items were the #1 and #2-selling traditional toys in 2001 and 2002.  Other manufacturers have also capitalized on this trend by adding "electronic learning" features to other types of toys, such as construction toys, plush toys, etc.  Parents and grandparents feel good about toys that not only entertain, but help children develop and get a head start in life.

In 2003, some electronic toys categories were again posting strong growth, both year-to-date (as of October) and for the most recent 12 month period vs. the prior 12 months, while toy sales overall have been flat or down in the same period.  Categories seeing improved sales include:

? Preschool electronic learning toys
? Electronic learning toys for school-age children
? Youth electronics & communication toys

In the 12 months from Nov.?02 ? Oct.?03, electronic learning toys for all age groups accounted for over $750 million, or 4 percent of total traditional toys (up from 3% in the prior 12 months).  Leapfrog has launched several new items in 2003, targeting age groups from toddlers to Tweens.  Fisher-Price has responded with its new Powertouch Learning System

Youth electronics & communication toys are growing their share of the market through the continued strength of the Karaoke category, ?spy? toys, and take-along music and video clip systems from Tiger Electronics/Hasbro?s Hitclips and Video Now brands.

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