I have seen the future of toys, and it is augmented reality.
That was my conclusion Monday after seeing Mattel's i-Tags, new technology that will be included with action figures the company will make for "Titanic" director James Cameron's new film, "Avatar."
For those not familiar with augmented reality, it's an overlay of digital information or imagery on top of real-world objects. AR, as it's known, "is a field of computer research that deals with the combination of real-world and computer-generated data (virtual reality), where computer graphics objects are blended into real footage in real time," according to Wikipedia.
Or, as Sean McGowan, a toy industry analyst with Needham & Company in New York called it, AR is "jet fuel for the imagination."
In the case of the "Avatar" action figures, AR is being implemented in the form of small plastic cards--the i-Tags--that kids can hold up in front of any Webcam. When they do, a fully 3D digital image is superimposed over the card on the screen. This can be anything from a simple set of information about a character from the film to a full-on, five-on-five shooting battle involving large military helicopters and flying dinosaur-like creatures called Leonopteryx.
The i-Tags, along with the "Avatar" action figures they're based on, will be released in October in advance of the December 18 release of Cameron's film.
There are five levels of i-TAGs, each of which corresponds to a specific level of interactivity with the AR. At level one--which will cost $8.95 per toy--kids who hold the card up to their Webcam will see some information on their computer screen about the character. At higher levels, though, they'll be able to "push" buttons on the card, allowing them to manipulate the digital character or vehicle that pops up (see video below).
And let's be honest about Mattel's implementation: it's cool, if fairly limited. At its best, two kids with Level 5 i-TAGs could put their "Battle Packs" to the test and watch as five warriors pop up on both sides of the screen and proceed to battle it out in, seemingly right in front of the kids.
And to be sure, for a 6-year-old, or even a 10-year-old, this could be pretty exciting. But I'm willing to bet a 15-year-old is going to get the maximum out of this system pretty quickly.
But to me, this isn't about today. This is about what's coming down the line, and what i-Tags and augmented reality making it to the retail market now means for the future of toys. And that's because this, as first-generation technology, is just scratching the surface of what's going to be possible in a year or two when growing public awareness of AR meets lower R&D costs and motivates developers the world over to see what's possible with this new medium.
"It's a very important thing, because the evolution of toys has been about solitary action," McGowan said. "We've had Web sites that interact with toys, but we've been missing the feedback with the toy...We've seen interactive toys 1.0, but nothing that goes back to the toy. I think augmented reality is creating a loop that makes two plus two equal five."
Think about it. The possibilities are just about endless, and could mean a whole new life for the kinds of toys that kids at first play with a lot, and then quickly abandon. By embedding special software in imagery that can be placed just about anywhere on a toy, toy makers will now have an incredibly wide range of virtual things to add to their physical toys.
Whether it's battling aliens or dancing dolls or branded pets, the sky's pretty much the limit for what could be done with AR and toys. And it's not about Mattel at all. Or at least not entirely about Mattel. It's really about the entire toy industry and the imaginative ways that toy designers figure out to build AR into their creations.
Indeed, it may be more accurate to say that, assuming the market is proved out quickly, the only limitations to how to deploy AR in or with toys could be what toy makers can think of.
To McGowan, there really is no limit to what can happen with this technology, but he thinks that it's important that a company like Mattel is taking the step of introducing AR to the market. Yet he also applauds the company for being subtle about AR in its marketing. In part, that's because of the state of the economy.
"Mattel is being smart, and downplaying" AR, McGowan said. "They're not trumpeting it as the hottest thing. They're not saying it's going to set the toy industry on fire. Why set it up that way?"
Yet this is extremely new technology and, so far at least, people don't seem to be putting a lot of energy into embedding AR into toys. Which isn't, of course to say that the technology won't be the next big thing.
McGowan believes there isn't any corner of the toy industry that won't benefit from new technologies like this, whether it's dolls or airplanes or anything else.
"With the concept of play, going back to the stone ages, kids emulate what they see in the world, and emulate what they see adults doing," he said. "It's their imagination that makes things real. And that imagination can be augmented...Every kid has always taken a little paper airplane and imagined they've been flying through the sky. Now that can happen a lot more realistically."