BBC News Online: Business: The Economy

Toy Story: The Christmas hits

They are cute, cuddly and have a mind of their own and they promise to drive weary parents round the bend.

They are Furbies, and these gurgling, giggling and belching toys are set to become a Christmas best-seller.

Queues have already formed in Hamleys' famous Regent Street toy store to buy the amazingly life-like pets, which cost £34.99 and are so advanced they use chips like the ones which powered the first Apple computers.

But with only 350,000 Furbies available in the UK before Christmas, some children are bound to end up disappointed.

The rush for Furbies heralds the start of the traditional Christmas toy battle that this year promises to be even more heated than usual.

The UK toy market is worth more than £1.6bn a year, with almost two thirds of sales occurring over Christmas.

As UK shoppers are staying at home dreading a possible recession, this battle has rarely been so important.

Experts believe that this year there is all to play for, with a large number of toys vying for children's affections and the top spot in the best selling league.

"It is a very open year. We know that the most fought after toy is Furby, but supplies are limited," said Gerry Masters, secretary of the British Association of Toy Retailers.

The Furbies are facing strong competition from a more traditional form of entertainment.

It could be yo-yo-yo rather than Ho! Ho! Ho! this Christmas.

The humble yo-yo has taken the UK by storm since last summer.

Top of the range yo-yos, which are made from aluminium normally used to build aircraft, sell at Hamleys for £110.

Then there are Beanie Babies. The US craze for the loveable bean bag cuddly toys has crossed the Atlantic.

Perennial favourites like Action Man, Barbie and Lego - which is now computerised - will feature prominently. They remain popular with children and nostalgic parents alike.

And the Telly Tubbies, which topped the charts in 1997, should have another good year.

Interactive toys are expected to be especially popular. A 'Babe' pig, spin-off from the cinema success, which talks when you touch its trotters, is already a good seller.

An outside bet

There are also some outsiders coming up on the rails, which could yet pip Furby to the winning post.

Dancing Babies are proving a huge hit.

Popularised by the US television comedy Ally McBeal about a frustrated single twenty-something, they originated on the Internet when they were commissioned by a software company, Kinentix, to advertise its products.

Dancing Babies have become a cult on the web, spawning a host of new sites devoted to the infants who gyrate to popular tunes.

And now Dancing Babies have moved from online to on the shelves.

Computer whiz kids

Surprisingly educational toys are also proving popular.

VTech has created a range of computers for kids that could turn out to be best-sellers.

"People are now very concerned that their kids get into computers as soon as possible - because it is so important," said Mr Masters.

The list of potential best-sellers goes on: Gus Gutz is a soft toy that was invented by a New York lawyer to relieve stress; children can stick their hand down the doll's mouth and pull out its innards. Colourful construction sets produced by K'Nex are selling fast. Bounce around Tigger, is another contender - it's a bouncy puppet modelled after the energetic tiger of Winnie the Pooh fame.

Recession looming

Beyond the pre-Christmas hype there are real fears that toy shops will have a difficult year.

The UK economy is heading for a sharp slowdown and retail sales have fallen as workers become more concerned about job security.

Hamleys' profits have already been hit this year and City analysts believe that Christmas '98 may turn out to be a damp squib for the toy industry.

"It (the toy market) is a bit patchy. In the North (of England) things aren't very good because people are worried about job losses. We can only hope that people will think 'to hell with all this gloom and doom' and go and buy something."

Happy Christmas?

It is still too early to say whether it will be a Happy Christmas for the toy industry.

The scramble for toys does not get underway in earnest until the end of November.

But whatever happens, it is clear that the Internet is becoming more important to the industry.

The example of the Dancing Babies shows how the Internet can have a significant influence on the wider toy market.

And the Beanie Babies official web page (run by the manufacturer Ty) has generated a staggering amount of interest, recording more than 2bn page views at the last count.

Some limited edition, or 'retired' Beanies Babies now change hands for thousands of dollars in Internet auctions.

Meanwhile the race to become the Christmas number one toy is likely to go down to the wire.

Relevant Stories

Pester power rules (19 Nov 98 | UK)
Christmas blues hit high street (18 Nov 98 | The Economy)
Trouble in toy town (06 Oct 98 | The Company File)
Yo-yo no-no (29 Sep 98 | UK)

Internet Links

The Furby official website
Kinentix.com
An unofficial Dancing Babies website
British Association of Toy Retailers
VTech
Beannie Babies official club
Lego
K'Nex

The BBC is not responsible for the content of external internet sites.

In this section

Inquiry into energy provider loyalty
Brown considers IMF job
Chinese imports boost US trade gap
No longer Liffe as we know it
The growing threat of internet fraud
House passes US budget
Online share dealing triples
Rate fears as sales soar
Brown's bulging war-chest
Oil reaches nine-year high
UK unemployment falls again
Trade talks deadlocked
US inflation still subdued
Insolvent firms to get breathing space
Bank considered bigger rate rise
UK pay rising 'too fast'
Utilities face tough regulation
CBI's new chief named
US stocks hit highs after rate rise
US Fed raises rates
UK inflation creeps up
Row over the national shopping basket
Military airspace to be cut
TUC warns against following US
World growth accelerates
Union merger put in doubt
Japan's tentative economic recovery
EU fraud costs millions
CBI choice 'could wreck industrial relations'
WTO hails China deal
US business eyes Chinese market
Red tape task force
Websites and widgets
Guru predicts web surge
Malaysia's economy: The Sinatra Principle
Shell secures Iranian oil deal
Irish boom draws the Welsh
China deal to boost economy
US dream scenario continues
Japan's billion dollar spending spree