We Versus Wii

As this issue went to press, the industry's official 2007 annual sales numbers had yet to come in, but the general feeling we've been hearing in the new year is that, considering everything that went on in 2007, things could have been a whole lot worse this past holiday than they turned out. Many specialty toy retailers have reported stronger-than-expected gains. And while many mass merchants reported ho-hum sales overall, the most important mass marketer to us, Toys “R” Us, managed to see its same-store sales grow by approximately 3 percent, an impressive accomplishment in a toy-averse environment. Details of the rise weren't announced, but I'm going to guess that much of TRU's success was fueled by video games, an assumption based on the astounding success of that business in 2007.

According to The NPD Group, the U.S. video game market grew an astonishing 43 percent in 2007 to a record high $17.9 billion. No doubt, one of the major drivers of that sales jump was Nintendo's Wii, possibly the most compelling video game system yet created. It has been single-handedly bringing family-friendly play back to video games in a way long absent from a market that is too often focused on whose hardware had the most horsepower or whose game could be the bloodiest. Thankfully, Wii seems well on its way to redefining digital entertainment much like the way Apple's iPod influenced the way people buy and listen to music. It has certainly made people who never would have willingly considered buying a game console, rethink that position. And toy stores are taking notice—even the specialty ones.

In the past month, we asked retail visitors to our website what they expect to stock in greater amounts in 2008 and, to our surprise, video games ranked much higher on the list than in the past. (Actually, making the list at all was a surprise considering how reticent many specialty toy retailers remain to the idea of stocking electronic entertainment.) When taken alongside Youth Electronics, the combined 18 percent showing for the two categories tied the survey's top segment, Games and Puzzles, for the category retailers said they'd beef up if they could only stock up on a single product category in 2008.

Similarly out of character were the 13 percent of respondents who said they'd stock up on action figures, the third most mentioned category of the group. Personally, I'm not so sure this is an “action figure year,” but if action figures can help independent retailers attract more boys (and they can), specialty stores should consider grabbing a piece of that business. (Oddly, another largely male category, vehicles, won't be getting the same shot. It placed second to last among respondents despite vehicles being the only traditional toy category with double-digit sales growth going into 2007's fourth quarter.)

Of course, talk about Wii could change once people get to Toy Fair this month and see what clever concepts toymakers have come up with this year to temp retailers away from even considering it as a viable alternative to stocking a more traditional plaything. In the meantime, for deeper insight into the minds of specialty toy buyers prior to the show, see our 2008 Retail Forecast story on page 26.

Parting note: Like most major cities, New York's a tough place to be an independent children's products retailer. But it's made even harder if you're both far from the steady stream of Euro-toting tourists flush with exchange rate riches roaming Times Square or SoHo, and off the beaten track of the traditional “nanny neighborhoods” farther uptown. It's in that context that we at Playthings note with regret the closing last month of one of Manhattan's few remaining specialty toy stores, Geppetto's Toy Box, a small but always impeccable shop that managed to defy the odds and bring a bit of family fun to the corner of Christopher and Gay Streets in Greenwich Village for the past 12 years. It was a store we often visited when something particularly specialty oriented was needed for a photo shoot on short notice.

As former customers, we're sorry to see it go.