Toyfare Magazine - Chips are Down

In just a short time, toys have come quite a long way. Just three or four years ago, no one was learning Furbish or raising electronic ferrets and robotic puppies. Your Han Solo figure couldn’t even talk, and Interactive Yoda wasn’t around to criticize your Force-manipulating abilities.

But those days have passed, and new toy technology has your favorite wrestling toys trash talkin’ just like on TV. Little plastic Darth Maul can now utter his only two lines from Episode 1 while conversing with the equally evil Darth Sidious. Just stroll through any aisle in the toy store and it’s impossible to escape the horde of motion-sensitive, sound-activated, interactive toys. And it’s thanks to the microchip that our toys are now so much more advanced than the motionless stuffed animals and speech-deprived action figures of the not-so-distant past.

The toy industry is far from the only one relying on microchip technology for its products. With everything from hand-held computers to the ubiquitous cell phone and kitchen appliances relying upon this new technology, the all-important microchips are currently in short supply. So what does that mean for toy collectors? Will the toy industry be compelled to stop making nifty interactive toys and bring us back to the Dark Ages of silent, dull and immobile products? Will the new age of technologically enhanced toys come to a premature end before ever reaching its zenith? And, perhaps most importantly, will there be enough PlayStation 2 consoles to go around after its long-awaited US release in October?

The shortage will probably not mean the end of the electronic toy renaissance, but it could very well sideline the new technology for the near future. For instance, Mattel, Inc. typically orders microchips 30 to 45 days early for its products, but with the chip manufacturers unable to ship on time, Mattel faces production chaos. “We calculate on a specific timeline,” Mattel’s spokeswoman Lisa Marie Bongiovanni said, “and all of a sudden it’s doubled. How do you fit that into your production schedule?” Mattel’s preschool and infant toy departments were most affected by the shortage, and Mattel stands to lose a whopping $100 million in holiday sales.

Mattel is not the only company feeling the pinch of the chip shortage. Hasbro’s Interactive Yoda Furby was postponed for several months because of it, and it may also delay several new products in the second half of the year. Sony will only be able to ship 500,000 PlayStation 2 units this October, far less than initially planned for the eagerly anticipated smorgasbord of technology, with its all-in-one game console, CD/DVD player, and Internet provider. Another video game maker, Radica Games, Ltd. announced that their shipments would be also be jeopardized by the shortage.

Playmates, the creator of the Simpsons figures and other microchip-enhanced dolls, has cut down on the quantities of some of their upcoming products, like figures from this December’s Jim Carrey/Dr. Seuss flick, The Grinch.
“Some of our Grinch items we produced less of than we would have liked,” said Playmates’ Jeff Trojan. “But a delay just means you can make less of [the toys] than you want this year before the holidays. You don’t delay everything until the spring, you just have to make a choice of whether you want to get it out or not.” Playmates had already ordered most of the chips they needed after the Amazing Babies line received positive fan reaction from the Toy Fair.

So while larger companies have had to delay products or ship fewer than was originally anticipated, toy companies are fortunately still managing to survive the shortage. And while an Associated Press report noted that the chip shortage would delay JAKKS Pacific’s Real Sound Arena, the California-based manufacturer claims it will still be able to layeth the smackdown. “We really planned ahead, so we didn’t see any effect from [the chip shortage],” reported JAKKS Pacific’s Jenna Goldberg.While JAKKS may currently be unaffected by the shortage, delays and limited quantities could plague the toy industry for the next year and a half. “Things are tight,” Trojan confirmed. “If there’s one hot electronic toy that sells out, that’s probably where it affects you.”But don’t despair just yet, toy fans. This latest shortage doesn’t signal the death knell of toy technology; fans may just have a harder time finding that hot new interactive toy for a while. Just make sure you ordered that PlayStation 2 in advance.

[photo coming soon]