The business of play offers new technologies and innovations that are providing more applications for plastics and potential opportunities for processors.

Life-like dolls that move and feel like real people. Plush animals that speak and interact. Games and puzzles that serve as interactive learning systems.

These and many other innovations were exhibited at the International Toy Fair, held Feb. 15 to 18 at the Jacob Javits Convention Center (New York, NY). The 100th edition, organized by the Toy Industry Assn. (TIA; New York), featured nearly 6000 new products from some 1500 manufacturers, distributors, and sales agents from 29 countries. A number of categories using plastics were on display, from arts and crafts, building sets and dolls, to games/puzzles, models, and accessories.

Not all fun and games

But the business of play has been anything but fun lately. A weak economy, declining profit margins, and consumers buying toys on sale have contributed to flat market sales the past three years.

"It has been a particularly challenging year due to basic retail market trends and the wild fluctuation of material costs," observes John W. Gessert, president, American Plastic Toys Inc. (Hamilton, NJ). "Pressures from both directions have made it very difficult to adjust costs accordingly."

U.S. traditional toy market sales—which exclude video games, hardware, software, and accessories—stood at $20.7 billion last year, a 3% decline from 2002, according to Reyne Rice, a New York-based toy trends specialist and consultant. Despite a rocky start this year, Rice sees signs that suggest a turnaround is imminent. Noting the toy industry churns out new products every 18 months, new innovations are expected to hit the streets before Christmas.

Which is obviously good for processors, because nearly all toys contain some plastic components. "There is no sign of any alternative to plastic as the basic material for toys, although retro trends are calling for die-cast metal and wood," says Iqbal Padda, VP logistics for Lego Systems Inc. (Enfield, CT). "There is also a drive in the direction of using cheaper materials like polypropylene and polyethylene."

Shrinkage is good

One of the biggest trends impacting plastic parts usage is the shrinking size of housings for electronic components and fuses. Many plush items, such as stuffed animals, house plastic components and computer chips that allow these toys to "come alive." "Advanced chip technology, available in smaller sizes, also decreases the cost and the bulk of hiding these power-packed features inside of products," Rice says.

Products such as MicroPets, MicroDancers, and Microids from Tomy (Newport Beach, CA) have been extremely successful in this category. These animated electronic toys can be "taught" to speak and interact. "Products that combine the sophistication of teaching your ''pet'' to grow up, by nurturing it, have moved from TamaGotchi and Furby technology to a new realm," Rice notes.

Using chips that are either motion-activated, sight-sensitive, or light-powered add another layer of sophistication. As Rice explains, "Some plastic parts need to be sheer enough to allow the chips to react to light, or access light for activation through precise openings.

"Housings need to be small enough to hide and protect the components, but not be so hard as to detract from the child''s play experience." Examples of these products are Neopets from Thinkway Toys (Markham, ON), and Mattel Inc.''s (El Segundo, CA) new Batman action figure products that incorporate visually encoded light technology.

New opportunities

Two new technologies introduced at Toy Fair also stand to impact future plastics usage. One is a proprietary system from T-Ink Inc., a unit of Abrams Gentile Entertainment Inc. (New York), that combines conductive ink that can be applied to a variety of materials, including plastic. Once applied, the ink replaces buttons, wires, circuits, and switches to create non-wired, current-carrying circuits on a wide range of products, including toys (for a related story, see our Cover Story).

This would allow, for instance, an inflatable radio with volume and tuning controls printed on see-through plastic. "T-Ink uses a conductive magnetic paint or ink on some component of the plastic part, which is activated by a thin membrane magnetic plate or chip," Rice says. "The sophistication of this technology has many new and varied applications for play sets, doll houses, games, etc."

The second application leverages expectations that high-tech toys will increase the demand for small, inexpensive motors. One of the latest innovations involves the use of actuators for silent, life-like motion at a lower cost than conventional electric motors. NanoMuscle''s (Antioch, CA) small, lightweight actuators provide these benefits, among others, and are available in a range of configurations.

Made elsewhere

U.S. injection molders are hungry for such opportunities, as more than 70% of toy production is done outside North America. "We''re seeing more and more Chinese and Hong Kong producers become integrated one-stop shops, doing moldmaking and making products from start to finish," observed Tom Conley, TIA president. "That''s clearly affecting U.S. plastics processors." Nowhere was this more evident than at the Toy Fair, where international pavilions showcased goods and services from exhibitors located in China, Germany, Hong Kong, Spain, Taiwan, and Thailand.

Lego says the bulk of its molding is still done in Billund, Denmark. While Lego has not managed any facet of its molding production in the U.S. since 2000, it recently enlisted a U.S. partner to help manufacture the new Lego Quatro bricks, Padda says. "Our molding partner will use a high-quality polypropylene plastic that allows the bricks to be easily manipulated—stacked and unstacked—for young children with small hands." Padda declined to reveal the name or location of the partner firm.

Industry insiders report that OEM just-in-time requirements have significantly impacted production schedules. While increased service-level requirements remain a challenging aspect of the business, it also provides an opportunity for domestic toy producers to distinguish themselves from offshore competitors. Says Gessert, of American Plastic Toys: "Shorter lead times and molders'' ability to react can be exploited as competitive advantages for domestic toy producers."

Greg Valero [email protected]