The average price for the toys on the list is just over £26 - about £6 less than two years ago.
V-Tech's Kidizoom Multimedia Digital Camera is the most expensive item on the list, with a recommended retail price of £49.99.
"With licensed toys combining the fun and familiarity of popular characters as well as collectable, pocket money priced toys making a big comeback this year, we are in for an affordable, family orientated Christmas," said the association's chairman Gary Grant.
"The list also reveals a trend towards nostalgic characters and brands which have been updated with a modern twist. Consumers are reverting back to heritage brands which will last longer than the Christmas season."
SELECTION OF TOYS OF THE YEAR FROM DECADES PAST
Action Man (1966)
Rubik's Cube (1980)
Nintendo Game Boy (1991)
Star Wars (1982)
Peter Powell kites (1976)
Power Rangers (1994)
Hot wheels (1969)
Sylvanian Families (1987)
Ben 10 (2008)
The Toy Retailers Association has compiled a list of this type for more than 40 years, and looking back shows how some brands have endured.
The first Toy of the Year, announced at the start of 1966, was the James Bond Aston Martin Car, with the geometric drawing toy Spirograph, the Spyring board game and furry egg-shaped Gonks dolls also proving popular.
Another popular toy, the "V-rroom" roar maker fitted to bicycles, prompted complaints from the Noise Abatement Society, the association said.
The following year Action Man - the first doll for boys - was the Toy of the Year.
In 2009, toy cars that perform stunts across tightropes and an action car that shoots powder-filled capsules joins some of the more traditional toys in the top 12.
It marks a slight change from last year when the list included a Star Wars mask and a singing and dancing Elmo from Sesame Street.
Animals, such as hamsters and Peanut My Playful Pup, dominate the top 12 for girls. Dolls, including Barbie and the Sylvanian Families also feature strongly on the girls' Christmas list.
Action toys are common on the list for boys, which features "blasters", tanks and battle packs. The "Screature" toy also appears as the popularity of dinosaurs continues.
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