Has the toy industry screeched to a halt?

Some of the biggest attractions at the Toy Fair, which ran from Sunday through Wednesday at the Jacob Javits Convention Center, were Legos, action figures, Nerf guns, Barbie dolls, Klutz books, K-Nex building sets, and Transformers--all things that most twentysomethings and thirtysomethings would undoubtedly recognize from their younger years. Sure, some of the plastic pistols now have laser-sight features, and most of the action figures can talk, but these toys would still be far more recognizable to a child of the 1980s or '90s (or even '70s) than a Wii would be to a gamer who knew only the Super Nintendo system, or an iPod would be to a Walkman listener.

In short, the toy world seems to be evolving at a noticeably slower pace than the rest of this rapidly changing 21st-century world. And it raised the question for this reporter: is this a sign of healthy stability in the toy industry, or a sign that it may be losing ground to video games and the Internet?

Video and computer game manufacturers were entirely absent from the show floor at the Toy Fair, and the companies that were dabbling in tech-savvy toys tended to be major corporations with their own electronics branches. Hasbro, for example, was featuring a new online version of the Magic: The Gathering card game, the kid-oriented NetJet gaming system from its Tiger Electronics brand, and I-List, a party game for teens and grown-ups that involves searching for songs on MP3 players' playlists. But Hasbro's gadgetry, along with Lego's programmable MindStorms robots and a handful of toys with online tie-ins, were the exception to the rule.

Some toy brands, it seems, have adopted a strategy of churning out branded or modified versions of essentially the same product--themed variations of the Monopoly board game, Sea-Monkey aquarium kits with pirate or spy decorations--rather than innovating. To this reporter, it seemed like a sign of stagnation and perhaps an indicator that the toy industry has passed the innovation torch on to its oft-rivals in the video game and Web realms. Toy manufacturers, however, were quick to insist that their approach is intentional: continuity in a product line is a how they create and maintain brand loyalty. Playmobil, for example, has been making the same 3-inch-tall smiling figurines for decades and has no plans to alter the formula.

"If we were to constantly change the base, which is our figure, we would lose recognition," said Michelle Winfrey, marketing and public relations manager for Playmobil USA.

Winfrey indicated that Playmobil, with a base demographic of 4- and 5-year-olds, is not concerned about the possibility of video games encroaching upon its market share. That age group simply isn't old enough for high technology, she said, explaining that Playmobil is "based on imaginative play. Before any child gets to electronics, they have to pass through pretend play." And Winfrey added that she thinks even a precocious 4-year-old who's eager to master Wii Sports will still find time for Playmobils. "I think it's shared," she said. "Having watched my son grow up, he liked both."

But what happens when kids reach the "tween" ages of 8 to 12 years old, when video games and the Internet start to draw them away from toys? The growing popularity of gaming consoles and online activities is indeed a concern for companies that cater to that age group, including Klutz, which has made a name for itself over the past three decades by creating spruced-up activity book sets for everything from face-painting to magnetism. Sheryl Brunell, executive director of sales for Klutz, acknowledged that high-tech games and the Web are indeed "a distraction" to the toy industry.

"We vie for their time and attention along with video games," she added. But in Brunell's opinion, parents are concerned enough about issues like video game addiction and online safety that they're still interested in ensuring that their kids have some time with traditional toys too.

"One of the reasons that we've been in business and growing so strongly in these past 30 years is that parents are concerned," Brunell said. "Our parents are still tuned in. They're still concerned about what their kids do. The world hasn't changed that much. They want balance." Klutz, meanwhile, is still publishing many of the same activity sets that adults may recognize from their childhoods.

This isn't to say that toy manufacturers aren't willing to innovate. In fact, some of the biggest crowds at the Toy Fair were drawn by smaller toy manufacturers that had something legitimately "edgy" to offer--and there wasn't necessarily anything high-tech about them. Multiple companies were going for a gentle shock factor by showcasing toys that would've once been considered, well, inappropriate. There were chemistry sets designed to create a huge mess, spy gadgets that encourage eavesdropping, and Diet Coke and Mentos geyser kits that allow kids to live out a 21st-century parent's ultimate nightmare: re-creating something that they saw on YouTube. Plenty of parents might take issue with the concepts at hand, but the ubiquity of both spy toys and science kits with "gross-out" in their titles was a clear indication that some manufacturers are looking to compete with Sony and Nintendo by pushing the envelope.

One of them, the appropriately named Marshmallow Fun Company, has centered its brand on the age-old taboo of playing with your food. The company has created an extensive line of plastic weaponry that uses marshmallows as ammunition. The grown-ups attending the Toy Fair couldn't seem to get enough of the firing range that had been set up, and a sizeable crowd had gathered to test the array of marshmallow guns, bows and pistols. Marshmallow Fun Company president Johny de la Valdene, a father of five, called it "paintball without the pain."

But the Marshmallow Fun Company wasn't willing to stop at a line of food-shooting guns: de la Valdene explained that the start-up has also created board games, T-shirts and comic books. And a DVD movie as well as a game for Nintendo's Wii are in the works for later in 2007. They aren't just willing to deal with the gaming juggernaut; they're working with it, too.

When asked if he thought toy companies were "losing out" to video games, de la Valdene responded that he believes "a lot are. Now kids can just sit down on the couch and use their thumbs instead of playing hide-and-seek or tag."

The hurdle, he said, is creating something so different--and not necessarily high-tech--that it convinces kids to get up off that couch. It just might work. If I were an 8-year-old in today's world, the simple prospect of being able to terrorize my friends (or even better, younger siblings) with a marshmallow gun would probably be enough to make me put down the Wiimote. For a few hours, at least.