Toy Industry Dominated by Video Games

UNLESS he's still hooked on Nintendo video games, Junior may not be thrilled with the latest selection of toys this Christmas. With strong home video game sales expected this quarter, toy manufacturers may be saving innovative ideas for next year when video sales are expected to slide. ``This is the third year of Nintendo and it's still a monster year,'' says Richard Anguilla, former editor of Toy and Hobby World. ``Next year you'll probably see a huge amount of new products.''

The reason is that most products in the fad-driven toy industry have only a three-year life span, he says. The Nintendo home video system, introduced in the fall of 1986, is currently in its third year on the US market. Industry watchers predict toy manufacturers will be aggressively marketing new toys next year.

Toy industry analyst Steven Eisenberg of Bear, Stearns & Co. predicts that after a good fourth quarter this year, home video game sales could suffer a 5 to 20 percent drop in 1990. The decline will help the rest of the industry as nonvideo toy sales have recently been sluggish, he says.

Toys in the ``male action'' category, in particular, have been vigorous, he says. In addition, sales in the toy ``staples'' category could move in to fill the gap as well, Eisenberg says. Staples include traditional kinds of toys like Barbie dolls, Tonka toy trucks, and board games such as Monopoly and Clue.

Consumers, for their part, may be scared off by a slow economy and more hesitant about shelling out the $30 to $40 it costs to buy Junior a video game. ``Parents, faced with the economic slowdown ... will revert to low-priced products,'' Eisenberg says.

A drop in home video game sales could mean good news for companies like the Tonka Corporation. Tonka chairman Stephen Shank has high hopes for the company's latest male-action products. The company predicts that Hyper Driver, its new battery-powered super-fast racing car, will be a big hit. Other Tonka male-action toys that the company says will be successful include: ``Real Ghost Busters,'' a set of Ghost Buster action figures including miniature and life-size accessories; and ``Robocop,'' a line of futuristic police action figures; and vehicle accessories.

Tonka is also betting on robust sales for board games next year. The Tonka-owned Parker Brothers game company is gearing up now. ``Parker Brothers has aggressive marketing plans for 1990,'' says Robert Meek, director of corporate communications at Tonka.

Nintendo accounts for 85 percent of all home video game sales. With the company receiving $1.7 billion in home video sales in 1988 and an estimated $2.6 in sales this year, Nintendo is expecting another good year ahead.

But the company is also branching into new areas of video entertainment. Nintendo's latest product, ``Game Boy'' ($89.95) is a portable hand-held video game system with headphones. Although the toy is geared for regular Nintendo users - boys aged 8 to 15 - Nintendo hopes to tempt adults as well.

Company officials say 30 percent of its primary users are adults over age 18. To accommodate its growing adult audience, the company has introduced a new game called ``Tetris.'' The game is easy to play and can be learned quickly, says Bob White, director of public relations at Nintendo. ``You find yourself mesmerized,'' Mr. White says. ``You can't put it down. It's wonderfully rewarding quickly.''

Dolls continue to be popular toys for girls. Mattel's Barbie doll, now 30 years old, is still a favorite. This year the company is introducing the upbeat ``Dance Club Barbie,'' which includes a cassette tape with music. Mattel Inc. says another big seller is ``L'il Miss Makeup,'' a doll whose ``makeup'' appears by applying cold water to her face. When warm water is applied, the makeup disappears.

``By far the most dominant name for the girls' category has been Barbie and Mattel,'' says analyst Eisenberg.

Meanwhile, the big ``boy toy'' companies like Tonka and Tyco Toys Inc. are trying to tap into the girls' toy market. For example, Tonka has recently introduced ``Dress 'N Dazzle,'' a variety of child-size ``dress up'' items including jewelry, hats, gloves, and makeup. Tyco's ``Baby Bubbles'' new doll actually blows little bubbles. ``Precious Places,'' Fisher Price's latest girls' promotional toy, is a miniature Victorian-style village with shops and cottages. A special key can be used to move figures and turn on lights in different parts of the village.