Photographer: Yuriko Nakao/Bloomberg

U.S. Toy Industry Betting on Pokemon Go to Fuel Holiday Sales

Merchandise tied to game highlights list of hot products this season

Coming off its best Christmas in years, the U.S. toy industry is wagering that the Pokemon Go craze will command a lot of space on kids’ wish lists.

Pokemon-branded video games from Nintendo Co. and a plush Pikachu character that wiggles its ears from Tomy Co. highlight the Toy Insider’s Hot 20 list, an industry publication’s best guess at what items will be the most coveted this holiday-shopping season. The Pokemon Go mobile app, which debuted in July, has been downloaded more than 500 million times.

My Friend Pikachu

My Friend Pikachu

Source: Tomy

“Pokemon Go has definitely given us a fresh look at Pokemon,” said Laurie Schacht, publisher of the Toy Insider. “Both the toys and the video games are skyrocketing.”

In 2015, the U.S. toy industry grew 6.7 percent, according to NPD Group. That momentum has continued in the first half of this year: Sales gained 7.5 percent, with Star Wars, Hasbro Inc.’s Nerf, Shopkins and Pokemon among the biggest brands, according to the researcher.

Lego X-wing fighter

Lego X-wing fighter

Source: Lego

Walt Disney Co.’s release of “Star Wars: The Force Awakens” late last year -- the first film from the blockbuster franchise in a decade -- has been a big boost to the industry. And while another Star Wars movie, “Rogue One: A Star Wars Story,” comes out in December, just one Star Wars toy made the hot list. It’s a Lego A/S construction set of an X-wing fighter. The list also features only one item tied to “Frozen,” the gigantic Disney hit from 2013: a doll from Jakks Pacific Inc. that lights up and makes sounds.

Some toys without ties to major entertainment franchises may be poised to sell well. Moose Toys’ Shopkins, a popular collection of plastic figurines, has an item on the list. There’s also Hasbro’s Speak Out, a game that challenges people to talk while wearing a mouthpiece. The item comes after of the surprise success of a bare-bones game called Pie Face last year.

Air Hogs drone

Air Hogs drone

Source: Spin Master Corp.

Another trend this year is pricier items loaded with technology. The Toy Insider also released a list of top tech toys, ranging from $200 for an Air Hogs drone from Spin Master Corp. to Mattel Inc.’s Hello Barbie Dreamhouse for $300, which offers speech recognition.

Toys “R” Us Inc. Chief Executive Officer Dave Brandon says these technologically advanced items have a market, but manufacturers went too far last year, hurting the industry. This year, the retailer has been pleased to see the average price for toys decline, which should generate more spending, he said.

Barbie Hello Dreamhouse

Barbie Hello Dreamhouse

Source: Mattel

“If Johnny has a Christmas list, and the first item costs $250, then Johnny is going to get one item,” said Brandon, who joined the struggling retailer last July. “The manufacturers are seeing that there is a lot of ways to build sales and share through more reasonable price points that are more affordable and appeal to more families.”

TOY INSIDER'S HOT 20 LIST

  • Laugh & Learn Crawl-Around Learning Center (Fisher-Price): $49.99
  • Go! Go! Smart Friends Enchanted Princess Palace (VTech) $59.99
  • Disney Frozen Northern Lights Elsa (Jakks Pacific) $39.99
  • Disney My Time Singing Elena of Avalor Doll (Hasbro) $29.99
  • FurReal Friends Torch My Blazin’ Dragon Pet (Hasbro) $79.99
  • Lion Guard Training Lair Playset (Just Play) $59.99
  • Paw Patrol Monkey Temple (Spin Master) $49.99
  • PJ Masks Headquarters Playset (Just Play) $69.99
  • Pokémon My Friend Pikachu (Tomy) $29.99
  • Talk-to-Me Mikey (Playmates) $39.99
  • Animal Jam—Club Geoz Dance Party Playset (Jawares) $29.99
  • Hatchimals (Spin Master) $59.99
  • Hot Wheels A.I. (Mattel) $99.99
  • Snuggles My Dream Puppy (Moose Toys) $54.99
  • Shopkins Happy Places Happy Home (Moose) $29.99
  • Skylanders Imaginators (Activision Publishing) $74.99
  • Lego Star Wars Resistance X-wing Fighter (Lego Group) $79.99
  • Nintendo MarioKart 8 Quadcopter (Carrera of America) $99.00
  • Speak Out Game (Hasbro) $19.99
  • Pokemon Sun & Moon (Nintendo) $39.99
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