L.A. Toy Companies Put On Their Thinking Caps

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Remember those night vision goggles that were selling for $80 during last year’s holiday season? This year, Malibu toymaker Jakks Pacific has lowered the price for the new improved model to $60.

That’s just one example of L.A. toymakers trying to stimulate consumer spending by cutting prices. Companies are also emphasizing items such as cars and dolls because they’re in the lower price category. And some are focusing on products that kids won’t forget the next day, such as a Mattel game that players control with their brain waves.

All the toymakers are expecting the upcoming holiday season will be better than last year’s.

“We are definitely looking at giving the consumer great value this holiday,” said John Ardell, senior vice president of marketing for Jakks Pacific Inc., “whether it be improving the quality of our night vision goggles and taking the price down $20 dollars or offering items that people can play with for a long time and have fun for the entire family.”

Jakks Pacific also cut the price on its game console by $50, from $79.99 to $29.99.

Last year’s economic crisis caused consumer spending to fall during the 2008 holiday season, and U.S. toy sales dropped 3 percent from $22.3 billion in 2007 to $21.6 billion in $2008, according to market research firm NPD Group Inc. What’s more, toy sales dropped 5 percent for the fourth quarter of 2008 from the same period in 2007. Toymakers make at least a third of their annual revenue in the fourth quarter.

Industry analysts said they expect to see an increase in sales this holiday season as the economy shows signs of a turnaround.

“The general feeling is that this year will be better than last year, when the consumer was in a state of panic over what was happening with the stock market and economy,” said Jim Silver, editor of Time to Play Magazine, an online trade publication.

But retailers aren’t as optimistic.

“Right now, retailers are not placing orders,” said Sean McGowan, an analyst at Needham & Co Inc. who follows Mattel Inc. and Jakks Pacific. “They are deciding whether or not the orders they’ve placed are high enough or low enough.”

Back to basics

Mattel is promoting toys that are priced at $30 and under, which make up about 80 percent of its product line. Investors seem keen on the prospects for the holidays and 2010: The El Segundo toymaker’s stock price has been steadily increasing since March. Mattel was trading at $17.97 on Sept. 24, a 42 percent increase from its low of $10.45 on March 5.

Mattel’s big sellers are expected to include its Barbie Doll Fashionistas. The dolls are slightly more grown-up looking than traditional Barbies, they can do more than 100 poses and come with a purse or other fashion accessory. The dolls are scheduled to hit store shelves in October and will retail for $11.99.

Another new entrant into the fashion doll category is the Moxie Girlz line by MGA Entertainment Inc., the closely-held Van Nuys toymaker engaged in a protracted legal battle with Mattel over the popular Bratz fashion dolls.

Moxie Girlz, which bear a resemblance to Bratz, with more modest clothes and less exaggerated facial features, range in price from $10.99 to $29.99, began appearing on store shelves nationwide in August.

Jakks Pacific is pushing its low-priced new line of toy cars dubbed GX Racers. The cars, which start at $5.99, feature technology that allows them to hit higher-than-usual speeds that enable them to do extreme stunts such as Evel Knievel-esque jumps.

Ardell said the company is looking to revive the toy category with its GX Racers.

“It’s bringing innovation into a stale category,” Ardell said. “The GX racers have fairly advanced technology in them that make them go fast for a cheap price.”

Toymakers are also looking toward entertainment-related licensed items to generate business.

Mattel created a one-of-a-kind doll inspired by the Walt Disney Co.’s upcoming animated film “The Princess and the Frog.” The doll is expected to be a big seller when the film is released in November.

Local companies are also betting on a few innovative gadgets that can be played with by users of all ages. Mattel, the world’s largest toymaker, is launching one particularly noteworthy toy.

Mindflex, which retails for about $80, is a game that requires a user to wear a brain scanning device that challenges them to maneuver a sponge ball through a number of hoops. The brain scanning device powers a fan that makes the ball float through the hoops.

Jakks Pacific launched its EyeClops mini projector in August. The pocket-sized projector, which retails for $99.99, uses LED technology to project movies, television shows and video games up to 60 inches in size from any multi-media device. By comparison, mini projectors sell for about $135 to $850 depending on the brand and retailer.

Needham’s McGowan said parents are not only looking for more affordable items, but for toys that their children can play with more than once.

“I think consumers are not only sticking to products that are a good value,” he said, “but they are also sticking with games and toys that you would enjoy if you were staying at home rather than going away.”

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