10 years later, a new ticklish Elmo tops the 'hot toy' list

On a late September morning this year, Betsy Smith rolled out of bed with a mission: Buy the new Elmo doll, the hottest toy this holiday season. Caring for her 2-year-old daughter and 6-year-old son slowed her pace, but not enough to stop her from securing a place in line at an Aurora, Ill., toy store before it opened.

Ms. Smith's sister tagged along so they could make the most of the "two Elmos per customer" rule. The day before, Smith had assured the manager that she had "an entire posse of Elmo-deprived toddlers at home," she says.

Looking to create the "perfect" Christmas experience, many parents scramble to buy their children the elusive toy marketers have deemed "a must-have." This year's toy story is similar, only a bit more "extreme."

After successfully snagging her Elmos, Smith jumped back in her car and drove home. But did she hide the toys away, anticipating the rapture on her children's faces when they unwrapped the boxes on Christmas morning?

Not at all.

She immediately put them up for sale on eBay. And so did her sister.

"It's fun to have what other people want," says Smith, laughing. A former social worker, she has made a full-time job out of buying, reselling, and blogging about her strategies at resalequeen.com. "You have to get [to the store] early if you really want something," she says.

This season, plenty of parents want the upgraded red Sesame Street monster dubbed Elmo TMX, which stands for "Tickle Me Extreme," or "Tickle Me 10," a nod to Tickle Me Elmo's 10th anniversary.

Parenting blogs overflow with stories of finding Elmo serendipitously or narrowly missing out on one after spending hours in line at a store. Moms and dads upload pictures and videos to the Web, showing their kids joyfully embracing the toy or scurrying away in fear. Elmos are auctioned off at fundraisers and given away as raffle prizes. Elmo is resold, stolen, and even burned to ashes in a YouTube video.

The toy, aimed at children ages 2 and up, retails for $39.99, but stores keep selling out. About 250,000 Elmos flew off the shelves on the toy's Sept. 19 launch date, says Jim Silver, copublisher of Toy Wishes magazine. "No one expected the dolls to sell at this rate," he says. "The only thing similar is the launch of a video game system."

Gina Sirard, vice president of marketing for Elmo's parent, Fisher-Price, won't reveal sales numbers, but says they have exceeded all expectations.

On eBay, Elmo TMX currently sells for about $100. The site's popularity tracker indicates that more than 21,200 dolls have changed hands – 10 times more units than the next toy on the list.

Smith sold her pair in late October for $195.99, or nearly 2-1/2 times what she paid for them. Reyne Rice, a toy trends specialist with the Toy Industry Association, says Elmo is on track to be the best selling toy of 2006. Furthermore, says Ms. Sirard of Fisher-Price, the ticklish figure set the company's (and probably the industry's) record for opening-day sales.

Elmo owes its commercial success to a combination of brand recognition, innovative engineering, and clever marketing. The doll's various incarnations since the original Elmo came out in 1996 have done well, but this anniversary edition isn't called Extreme for nothing. Elmo not only giggles when tickled, but he also drops to the ground, pounds the floor, and rolls around in a routine accompanied by hysterical laughter. When it's done, the 14-inch red furry machine stands up by itself – with the help of six AA batteries (included).

Neat, toy analysts say, but it wouldn't have been such a big hit without the marketing.

TMX was a secret project. It wasn't shown at toy fairs, a common practice in the industry. The few insiders who saw it were under a "giggle gag," says Ms. Rice. The toys are sold in boxes that you can't see inside. The first units had stickers marked "top secret" on them. Prospective buyers could lift a flap to try to see inside, but the opening showed only Elmo's eyes and when the flap was lifted, Elmo would reportedly say, "Ah ah ah! No peeking!" and giggle. (Now the Elmos say, "Elmo feels very ticklish in here!" and giggles when the peekaboo flap is lifted.)

Most retailers did not see the toy until the first box came off the delivery truck. In anticipation, stores displayed banners showing a shadow Elmo and the release date.

Yes, Elmo is hot, and parents may elbow one another for it, but is it worth the trouble?

"Just because it's a hot toy, it doesn't mean it's for your child," says Stephanie Oppenheim of independent reviewer Toy Portfolio, which publishes a yearly guide.

Ms. Oppenheim and her mother, Joanne, were partly responsible for the success of the original Tickle Me Elmo, a sleeper hit they endorsed. "We loved the original Elmo. It was a soft huggable doll."

The Oppenheims don't like the new Elmo. Its body is hard beneath the fur, so the monster doesn't have the "huggability" of its predecessor. And it's not just that, Oppenheim says. Children need to be at the heart of the playing experience, not the other way around.

"Elmo does all the playing, and the child just watches," Oppenheim says.

Toy industry analyst Rice admits that the new Elmo probably isn't plush enough for a child to take to bed. Still, she likes the toy for its engineering feats, adding that it engenders interaction between children and adults as they go bananas watching it.

Fun or not, Elmo is laughing all the way to the bank, cashing in not only for its designers, but the industry overall. Toys are a $22 billion empire, according to research firm NPD Group, but the industry hasn't had a "hot toy" in years, while video game makers have chipped away at traditional toymakers' share. For now, Elmo's giggly self is leading a rebirth of sorts, creating buzz and bringing shoppers back into toy stores. NPD estimates that shoppers looking for gifts will spend on average $157 on toys this holiday season, $16 more than they did in 2005.

Smith probably won't be one of the big spenders. Her children aren't getting Elmos this Christmas – "they haven't been that good," she jokes, then continued, "Why would I get my 2-year-old a $100 toy? It's just another toy she'll throw in the heap."

What are the kids getting, then? "Some used stuff from Goodwill," she replies. Smith believes one needn't spend a lot of money to give kids a great play experience.

And here's a tip from toy-reseller Smith. She predicts that the next hot toy on eBay could be Mumble the Penguin from Build-a-Bear. The cartoon character from the hit movie "Happy Feet" is bound to be a star with the kids, she says.

If you have given up on finding Elmo or aren't interested in it, many, many more toy options are available. Here is some toy-buying advice from several reviewers and industry analysts:

• "Understand that hot toy lists are just guidelines," says Chris Byrne, who calls himself the "Toy Guy," and is also a contributing editor at Toy Wishes magazine. Buy things consistent with your values, he says, and don't forget that the success of the market begins or ends with your pocketbook.

• Get to know your child's interests before you set out on your search, says Reyne Rice, a toy trend specialist for the Toy Industry Association. See what they play with and what they enjoy doing. Then, do some research on the Internet to figure out what toys would match those interests. Otherwise, Ms. Rice adds, you will be overwhelmed once in the store. (Shopkeepers at independent, nonchain toy stores tend to be good at helping customers make toy choices. They have to be good to still be in business, given all the discount toy sellers today.)

• Make sure the toy is age-appropriate, especially if it may present a safety hazard to younger children. Toys that are too complex for younger children are likely to frustrate them.

• Look for toys with lasting play value, such as blocks, art supplies, or trains. These may not sound like seductive choices, but it's the "child that will add the bells and whistles," says Stephanie Oppenheim of Toy Portfolio, an annual toy-buying guide. Also, look for toys that foster interaction between parents and children, such as board games, she says.

• If at the end of the day you can't find what your child wants, give them an IOU – and make good on it. After Christmas, supplies invariably catch up with demand.

For other specific toy recommendations, check out the latest issue of Toy Wishes, the Toy Insider list at thetoyinsider.com, or the Oppenheim Toy Portfolio at toyportfolio.com.