The Wall Street Journal reported that more than 90 percent of app toys fail around the same time Activision announced that Skylanders’ sales exceeded $500 million. Among the failed app toys were Barbie Dolls and Hot Wheels cars with special conductors to control games on a tablet from Hasbro, Disney’s Cars AppMates, and a version of the Game of Life from Hasbro in which players spin a wheel on an iPad rather than a physical wheel. Yet, Activision’s physical virtual goods continue to sell incredibly well, driving Activision’s profitability. This interesting juxtaposition of news shows the value of using the equivalent of in-app purchases rather than the business models designed around retailing, distribution and manufacturing processes from the last century.
What is wrong with App Toys?
The biggest problem with app toys is that the toy makers are simply trying to move the same product to a new platform. The toy companies do not understand what creates compelling experiences on tablets (or consoles or phones, for that matter). Instead, they are replicating the same experience people have with the physical goods in the virtual world, which is not what consumers are looking for. They are competing with (thousands of) native games and products that are created to meet customers’ needs. It becomes obvious why the app toys cannot compete. Continue reading “Why app toys fail and Skylanders soar”
Although this is by no means a prediction based on any scientific data, I am already seeing big trends this holiday gift season that will impact game companies significantly. By talking to my children and their friends, visiting major retailers and getting virtually every online retailers newsletter, it is becoming clear there will be some big winners and losers this holiday season that also show how the industry will continue to evolve.