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Playing around with toy ideas

Some of the most talked about toys at the recent American International Toy Fair were toys that weren't even there: video games. "The most important question facing the industry today is: Have video games peaked?" notes Richard Grey, president and chief executive officer of Tyco Industries Inc.

Toy makers are hoping that they have, but are worried that they haven't.

While video game sales grew more than 25 percent last year to $3.5-billion, sales of traditional toys grew only modestly for the fourth year in a row. The Toy Manufacturers Association this week said retailers sold $13.4-billion of toys in 1989, up 5 percent from $12.75-billion the previous year.

Nonetheless, toy makers aren't playing dead. They're unveiling thousands of new toys, including lots of dolls, movie-linked toys, and racing cars. "Perhaps we shouldn't be blaming Nintendo (the video game giant)," says Alan Hassenfeld, chairman and chief executive officer of Hasbro Inc. "I think we should shed some of our stodginess."

"Retailers, naturally, are tentative," says Steve Sandberg, who searches for exciting toys and distributes them to stores in New England. "Many of them can't pay their Christmas bills yet. They still have a lot of toys left on their shelves from the holidays."

But it's not all gloom and doom. Some toy makers are expanding their offerings of girls' toys, which have been hurt less by the video-game boom. An army of new dolls will hit the market this year. And there are even signs that companies will yet again try their hand at electronic toys, a market that so far has generally failed to live up to its promise.

Anxious to get the "Nintendo monkey off their backs," some toy companies may start taking risks, says David Galoob, president and chief executive officer of Lewis Galoob Toys Inc. For example, the midtown Manhattan office of high-tech toy inventor Abrams Gentile Entertainment Inc. has been noisy with major toy makers browsing in their laboratory loft. "Last year, we had to call them to come look at us," says partner Chris Gentile. "This year, they're calling us. They're ready to put up some risk money."

Toy makers also may borrow from the success of video games. A possible feature at next year's toy fair, say the inventors of Mattel's Power glove, a remote-control device for playing video games, is to add new applications so that a glove could open bedroom doors or even play tricks on electrical appliances by remote control. Other toy companies are looking at sophisticated ways of using light and sound waves to animate toys, Gentile adds.