Playing for real in toytown

It's a cut-throat business being one of Santa's helpers, as ROGER FRANKLIN discovers when he delves into the toy game.

Once you have been encircled by clowns, hugged by Raggedy Anne, introduced to Tarzan and jostled through 6ha of crowded aisles patrolled by busty young women dressed as Barbie, there is really only one question: are we having fun yet?

By the final day of the New York International Toy Fair last month, the answer was written in thousands of thin, forced, slightly frantic smiles as the people who decide what will go under the world's Christmas trees faced the toughest decisions of their year.

"The pressure is crushing, just crushing," moaned Audrey Farel, a toy buyer for a chain of Midwest discount outlets who was agonising over a stuffed doll that goes by the charming name of Gus Guts. Could Gus be the next Cabbage Patch Kid, the one to wipe that smile off Tickle-Me-Elmo, or the toy that finally knocks Furby from its perch atop the pile of "must have" Christmas gifts?

In Farel's fantasies, she could see parents battling each other by the cash register, paying premiums, driving for ages to reach her stores to lay their hands on hard-to-get Gus. She would be a hero with head office, hailed for the acumen that led her to order an early and plentiful supply of the holiday season's hottest-seller. There would be glory, not to mention a hefty bonus. Best of all, there would be another blessed year of mortgage payments and job security in an industry famous for its dynamic instability.

But what if kids sneered at Gus?

Then it would be markdown prices and a boss with murder in his eyes. Not to mention the impossibility of explaining why, all those months ago in New York, it had seemed like such a good idea to buy 50,000 units of a toy that spills yards of luridly coloured, stuffed-satin guts into the laps of its little owners.

"He could have legs, he could move," Farel mused about Gus' sales potential as she stuffed kidneys, liver, heart and lungs back into the little chap's eviscerated abdomen. The manufacturer calls Gus "educational and fun" but Farel knows better.

"Just look at Harry Hairball," she began, citing another Toy Fair stomach-turner. "Boys love the icky stuff - slime and green goo - they're boy staples. Anything with snot, or that farts, they'll always sell. And girls, they're big on hair. Put hair on a pony - put hair on anything, really - and girls are interested."

But Gus? Well, after a lot of reflection Farel still didn't know if he passed the united brotherhood of little boys' "gross-out" test.

"Maybe there's some crossover potential with girls, too," she speculated. "But that could backfire and alienate the boys if their sisters start playing with Gus. There's just no telling which way things can go when you're dealing with new product."

For four days, those sort of doubts were at the centre of Toy Fair's die-moulded plastic heart. It is the world's biggest toy-biz trade show and the gold-leafed and marble headquarters of the United States Toy Manufacturers' Association headquarters on West 23rd St had been gussied up to reflect the importance of the event.

Outside, there was a 6m green rabbit on the sidewalk and a block's worth of cheerful hoardings plastered with 3m portraits of the Rugrats characters. Parents passing by with kids in tow kept pleading with the security guards to let them slip inside and take a look around. All were turned away because if there is one sure thing about this annual fair, it is that it has never been a suitable place for children.

By year's end, Americans will have treated their kids to a projected $US33 billion ($67 billion) of dolls, novelties, geegaws, jimcracks and gee-whiz recreational wizardry. With so much money at stake there was no time to spare a thought for the notion that toys might have some connection with the quaint concept of fun. The Toy Fair crowd is all business, and a ruthless kind of business at that.

On opening day, companies unveiled what each hoped was this year's megahit. Four days later, as the show was ending, the shelves were full of clones as copycat companies put their hastily produced imitations on display. Some of the flagrant cribs will inspire lawsuits, as was the case last year when New York's State Supreme Court was obliged to spend a week deciding if the Nadel company's "vibrating, spinning, screaming money" was a copyright infringement of Play-By-Play's "vibrating, spinning, screaming Tasmanian Devil." After much deliberation, the court concluded that any toy manufacturer is entitled to insert "a vibrator of standard design and construction" anywhere he can make it fit.

But piracy wasn't the cause of the tension that rippled through Toyland this time. The truth is that the toy industry takes intellectual theft for granted. The real cause for anxiety came when ailing industry leader Mattel unceremoniously dumped its president and chief executive officer, Jill Barad. It was Barad who revamped Barbie from a 60s relic into the $US2.4 billion-a-year cash cow that saved Mattel's bacon the last time the company almost went broke.

Bill Gates held Barad in such high esteem that he installed her on the board of Microsoft. Last week, as manufacturers, toy inventors and buyers cruised the crowded aisles, the sobering consensus was that if a star like Barad could get the chop, nobody was safe.

When Barad had control of Mattel snatched from her manicured fingers last month, three Barbie dolls were being sold every second. But even that, in the end, was not enough to save her.

"The toy business is maybe the last of the ruthless, piratical, one-slip-and-you're-dead kind of businesses to survive," said one insider.

Wayne Miller, who chronicled how Mattel's chief rival, Hasbro, danced back from the brink of bankruptcy in his book, Toy Wars, said: "Trading commodities in the pit of the Chicago Mercantile may be just as cut-throat but that job ends when the market closes every day.

"With toys, well, the pressure never lets up. The future of your company, your employees, your family's fortune is all riding on a 6-year-old's whim. Make one bad call and it's curtains."

Which is what happened to Barad, who last May sank $US3.6 billion of Mattel's money into the acquisition of the Learning Company, an educational software manufacturer whose CD-ROMs include MathStorm and Where in the World is Carmen Santiago, which is also the licensed inspiration for a cartoon series.

The software titles were bestsellers when the deal was done. But six months after the ink dried, America's kids turned their collective backs on Barad's latest purchase. Not even Wall Street's savvy analysts foresaw retailers sending back truckloads of unsold CDs, or the way the TV show tanked in the ratings.

Barad struggled to survive, axing a slew of vice-presidents while simultaneously trying to squeeze the most out of poor, overworked Barbie. According to Dollzine, the industry newsletter that broke the scandal, Mattel had been producing up to three times as many "limited edition" collector's Barbies as it admitted. As Dollzine's editorial thundered, this represented a "fraud and betrayal" directed at those trusting souls who had been shelling out as much as for $US400 for Pink Vinyl Ballgown Barbie.

It was Toyland's own Watergate, and the collector market nosedived - as did Mattel's stock, which has dropped from last year's high of around $US50 to $10. Barad was out the door, albeit with a reported $US20 million golden handshake.

Which put her in some august company because the United States Toy Industry Hall of Fame - yes, there is such a thing - is full of tributes to smooth operators who spent their careers flirting with disaster.

Consider industrial designer Marvin Glass, who bought the rights to wind-up chattering teeth in 1941. It doesn't sound like much of a coup but almost six decades later a company called Fun Inc stills sells around $US5 million of the leaping plastic dentures every year. (Toy Fair is a treat for anyone interested obscure and arcane statistics. "Gag vomit is an American tradition," one brochure boasted. "Since 1933, enough rubber and plastic vomit has been sold to cover every inch of the mall in Washington D.C. from the Lincoln Monument all the way to Capitol Hill.")

Glass also had his odd ways, once delivering a speech at a toy industry dinner in which he attributed his success to a strict policy of only hiring mental defectives. "Only a lunatic could love this business the way I do," he explained.

At his Chicago design studio, Glass began every day by placing an ampoule of cyanide on his desk and loudly asking his staffers, "Is this the day I finally swallow it? Come on, tell me why I shouldn't!"

In his circle it wasn't considered unusual behaviour. One of his model sculptors, the man credited with perfecting the Mousetrap board game, was in the habit of running to the window and screaming, "I spit on you, world!" which he would then do to the peril of any pedestrians unfortunate enough to be passing.

Glass, who made and lost several fortunes before dying a rich man in 1974, knew what he wanted from a toy - even if the buying public did not always share his enthusiasms. That is more than can be said of the Toy Fair crowd, which was anxious to inspect any new trend but eager to put off a commitment until the last moment.

"It's a fickle, fickle business," said Teresa Gibbons, a rep for Hoberman Designs, which makes educational geometric games.

Back in New York after globe-hopping the international circuit of toy fairs in Hong Kong, Germany and Britain, she still had the energy to marvel at how quickly the business reacts.

"A springer spaniel won the Madison Square Garden dog show and it was on all TV news," she observed. "The next morning, all the plush toy exhibitors were featuring their own white and brown springer dolls. They must have had them run up straight after the show.

"It's the quick and the dead in the toy business."