Toys are staging a comeback.
The U.S. toy industry is expected to have its strongest year in at least a decade after several years of kids choosing videogames and mobile apps over Barbie and stuffed bears.
Annual toy sales are projected to rise 6.2 percent to $19.9 billion in 2015, according to The NPD Group Inc., a market research firm that tracks about 80 percent of the U.S. toy market. That's up from a 4 percent increase last year, and the biggest increase in at least 10 years since the group has tracked toys using its current system.
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The increase factors in brisk sales during the final quarter of this year, when sales are expected to be up 5 percent to $9.6 billion, a stronger pace than last year's 3.6 percent gain.
The growth is being fueled by increasing popularity of collectibles, toys based on Hollywood blockbuster films and better technology that allows toys to do things like talk back to children. It comes after sales slowed and sometimes declined in the past 10 years as children — much like their parents — became more enthralled with technology.
Now, toymakers are using chip technology, which is getting cheaper and more powerful, in toys. They're also focusing on grabbing the attention of the long-ignored but increasingly influential preteen crowd.
"The selection is much greater than in the past," said Jim Silver, editor-in-chief of TTPM, an online toy review site. "Technology is much better in the toy aisle, and it's really inspiring young kids to play but also bringing older kids to things like radio control and role play items."
What's giving toys a boost?
Surging demand for all things "Frozen" helped the toy industry achieve a rare gain last year. Toys related to the blockbuster about a princess who sets off to find her sister with icy powers were popular. In fact, "Frozen" was the top toy brand last year, reaching $531 million in sales, according to NPD.
And the Hollywood infatuation is expected to continue with the release of the "Star Wars" movie on Dec. 18: Hundreds of products, from puzzles to action figures related to "Star Wars," are expected to exceed Frozen's success.
Marty Brochstein, who's with the International Licensing Industry Merchandisers Association, says the $199.99 LightSaber from Hasbro, which features motion sensor-controlled sound effects, already are on backorder. He says "Star Wars" appeals to both kids and adults.
"It's multi-generational," Brochstein says.
Hasbro, the nation's second largest toy company, reported a jump in second-quarter profit last month, helped by toys related to "Star Wars."
Hasbro has the major merchandising licensing rights to make Star Wars toys from now until 2020. It's also teaming up with Walt Disney Co.'s consumer products division to make "Frozen" dolls in 2016. That deal froze out Mattel, which sells the dolls based on "Frozen" characters.
Toys R Us' new CEO David Brandon says the retailer is placing big bets this holiday season on brands like "Star Wars" to help boost sluggish U.S. sales.
"It will be very interesting to see at the end of the holiday season where the growth comes from. And how much growth there is," Brandon says.
Toy companies are pushing remote controlled cars and droids controlled by smartphones. And robotic creatures are becoming more life-like with voice recognition features.
Hasbro's StarLily My Magical Unicorn, for example, responds to voice and touch with more than 100 sound and motion combinations. Mattel, the nation's largest toy company, also is hoping technology will help it reverse years of slumping sales.
"You want to make sure that you give them enough that they're going to want to walk away from their iPads and phones," said Mattel's Executive Vice President Geoff Walker.
Mattel's new Barbie features speech recognition and can have a two-way conversation with girls. And its Fisher-Price brand has "Smart Bear," an interactive plush bear marketed as having the brains of a computer without the screen — and is linked to a smartphone app. Fisher-Price also is pushing a robotic dinosaur.
"The best thing about it is that it shoots from the front and it shoots from the back," says Matthew Fic, a 6-year-old who recently played with the toy.
TARGETING THE PRETEEN SET
The 8- to 12-year old group accounts for 22 percent of toy sales, according to NPD, but has been ignored because they're the biggest users of mobile devices.
Now, toy makers believe they can keep older kids' attention because features like voice recognition are more affordable.
For example, Spin Master's Meccano Meccanoid G15 allows kids to build and program their own personal four-foot-tall robot that records and plays back audio and it learns from them. It has more than 1,200 parts and features 64 megabytes of memory.
And Hasbro spiffed up its Nerf gun to cater to the 14-plus crowd. Nerf Rival shoots balls 100 feet per second. Think paint ball meets Nerf.
Still, it could be a hard sell.
"It's fun. But I don't know how long I would play with this until I got bored." said Jackson Roberts, 14, from Manhattan, referring to Nerf Rival. On Roberts' holiday wish list: a 3-D printer and a droid that takes pictures.