I was, for the second year in a row, speaking at Engage! Expo, the virtual worlds conference in New York. As I looked out at the audience, I noticed that there were almost no familiar toy industry faces. As a result, I decided to ask this question: “How many of you in attendance today were present at the recent New York Toy Fair?” To my great disappointment, despite the growing incidence of virtual play as an adjunct to traditional toys, very few hands went up.

I spoke with the few members of the toy industry who were in attendance and we all shook our heads in disbelief. Where was everyone?

The question we asked ourselves was this: “Are we, as an industry, making sure that virtual play becomes firmly anchored as a core component of the toy industry?” I sure hope so, because we cannot afford to let yet another form of play leach our customer base and revenues the way video gaming has.

Virtual worlds provide not only expanded play value for end users but can potentially provide new sources of revenue for traditional toy makers. Many of these sites are generating impressive revenue streams through subscriptions, advertising and micro transactions by which participants pay real money to purchase virtual (and sometimes real) products.

By comparison, the modern toy industry is really not so modern. Established in the late 19th century and nourished in the 1950s and ’60s, the industry has repeatedly failed to grasp its own changing nature. (Ironically, one major reason for our inability to embrace change may lie in our great strength: multi-generational family businesses. In many cases, those who grow up in a family business actually experience the world as their parents did. They grow up with the prior generation’s worldview and sensibilities.)

Beyond the toy business’ tendency to look back more than it looks forward, what has me even more concerned when it comes to virtual worlds and other forms of technology-based entertainment is that the hugely popular Nintendo Wii has captured the full attention of moms. Moms see Wii as a way of bringing the entire family together around one play platform. This is a looming threat to the traditional toy industry. It is one thing to lose teenage boys to video games, it is another to lose mothers, the driving force in dollars spent on family entertainment.

So to ensure that we keep virtual play as a part of the toy industry, we need to bring these two industries together under one roof. One way this merger can be accomplished is by creating one trade show that aggressively seeks out and embraces both the toy and virtual world industries. The most obvious candidate for such a show is Toy Fair.

By bringing the varying aspects of play together in one place at one time, these trade shows will prosper as will the industry. More importantly, we will create a milieu where chemistry happens and the industry grows.

Exhibitors will be able to come in contact with those who not only design the look of these powerful websites but more importantly meet those who design the “plumbing.” After all, creating virtual world sites is a challenging and costly exercise. Expertise is required to make sure that they function correctly and that economic transactions are easy, quick and safe. Such an environment will allow toy companies to meet the people who know how to do it and do it right.

Here are some other benefits from partnering more closely with the virtual world community:

• Attendee counts will go up. Toy retailers and other members of Toy Nation will be drawn to a joint event by the chance to get more bang for their buck.
• Costs will go down for exhibitors and attendees. There will be no more having to make the redundant investments in travel, display, time and hotel costs necessary to be present at multiple shows.
• New and better ways to profit from play will arise. Through cross-pollination, Toy Nation will get the chance to make vital contacts and to learn best practices, from building virtual worlds to how to increase revenues through virtual websites.
• A new generation that really “gets it” will be drawn to and subsequently enter the toy industry. The toy business’ new blood will breathe virtual air and have whole new ideas on how to integrate online with real-world play in more nuanced ways.
• The media will be there in abundance. The press love technology. As a result, the toy industry will get dramatically expanded media coverage and as a consequence, passionate interest from the toy and technology consuming public.
• Investors will come. Angel investors see virtual worlds, unlike traditional toys, as hot investment opportunities. By including virtual play in our trade shows, we will draw those who have investment money and a will to take a risk on spending it—maybe even on a toy company or two.

We are living through extraordinary times. Not just in terms of a troubling economy but in the promise of technology and new means of entertainment. A toy industry that fully embraces change will be an industry that makes the 21st century its best century yet.