Phones ring off the hook at Toys-R-Us. Game manufacturers are besieged by frustrated consumers. Toys with battery-operated brains are on the cover of Newsweek and, across the nation, millions of computer chips tucked inside items like Simon, Merlin and Electronic Football promise to make this the most electronically synapsed of holiday seasons ever.

While manufacturers of electronic toys and games are struggling to meet the demands of chip-crazed consumers, ginzmo designers are completing plans for some of next year's truly futuristic introductions.

"What we've seen so far," says Joe Sugarman, head of the vanguard electronics marketing firm JS&A in Chicago, the company that first popped the electronic calculator on an unsuspecting nation through ads in the Wall Street Journal seven years ago, "has been a kind of first generation of electronic items, calculators and watches and then games. We've already seen a plateau in the pocket-calculator market, and I think next year we'll begin to see some sophisticated micro-processor devices for the consumer."

Those living in the woods will not know that Simon is a device akin to the flying saucer in "Close Encounters of the Third Kind," replete with lights and tones offered in an increasingly difficult sequence that must be repeated exactly by the player; Merlin is a little red fellow who looks like a Touch-Tone phone, sounds like R2D2 and provides his master with a choice of six games including blackjack and tick-tack-toe; Electronic Football, returning from last Christmas' toy-store dominance, keeps time, score and yards to go ON DIGITAL DISPLAY AS THE PLAYER TRIES TO ELUDE ITS ELECTRONIC DEFENSE.


ALL OF WHICH IS A LONG WAY FROM 1971, WHEN THE FIRST POCKET CALCULATORS BIT THE U.S. market. Eventually, the little electronic intelligences that sparked the units crept into other devices: digital watches, micro wave ovens (as timers), automobiles (fuel monitors), supermarkets (cash registers) and even McDonalds (instant inventory control).

Last Christmas micro processors hit the jackpot with hand-held electronic games. Although they were novelty items, stores sold $30 million worth of units called Comp IV, Code Name Sector and Electronic Football.

"What it did," says Bill Bederman, Washington area manager of six Toys-R-Us stores, "was revolutionize the toy industry. We'd never seen anything like it before-thousands of people demanding $30 items-and this year we're seeing electronic toys follow through to dominate the business."

But already this Chirstmas is obsolete.

For example . . . the home computer.

In January, at the increasingly important Consumer Electonics Show, Mattel will introduce its $500 home unit, a device that some industry observers think will genuinely alter America's concept of electroncis and computers.

Let's assume you had trouble reaching a toy shop this month to find out whether Kenner's delightful, remotely controlled R2D2 unit was available for $50. The phone lines were busy, and finally, a harried, brusque clerk said the item was in stock. You hurried down to the store, only to discover the last droid had been sold minutes before you got there. In short, as one vexed Washington parent put it, "the annual dread of toy shopping, the crossing of the River Styx."

With a home computer, the story could be different. Via special telephone lines, your computer would query the store's won computer to find out models and varieties of items in stock. If an R2 unit was available, you could immediatley reserve one; if the item was back ordered, the computer would say when it was expected. Eventually-and this aspect is still several years off-the two computers would instruct your bank's computer to transfer funds from one account to the other. Talking Toys

Another example . . . voice response and synthesis. One of this year's most intriguing toys is Texas Instruments' Speak & Spell, a small calculator that spells about 240 different words an then pronounces them electronically -recreating the sound of human speech from information digitally stored in three chips the size of thumbnails, without using tape or any moving parts.

"Speak & Spell," says Milton Bradley's George Ditomassi, "amazed the industry." Says Sugarman: "It's really bot as a computer with certain human-like functions, notably here, speech."

Several toymakers are guardedly predicting that next year will carry the robot motif one step further, and bring the introduction of voice-responding toys. Say "Stop" and a model car will stop, "Go" and it goes, "Left" and it turns-and so on, responding to a few basic commands that will be expanded in later years.

"We're not that far from being able to build a real R2D2," says astrophysicist and Merlin inventor Robert Doyle, conjuring up the image of a little mobile computer with verbal input and output devices.

"To a lot of people that sounds scary, dealing with a computer. The thing to always remember is that it's not the computer you're confronting; it's no more or less than the intelligence of the person who programmed it." Big Bytes

Doyle says the home computer, toy and game frontier is expanding rapidly.

"First of all," he says, "we're seeing a tremendous increase every year in the amount of memory available. Last year we had 1,000 bytes ("a combination of eight bytes, or the amount of binary information needed to retrieve one letter form a memory bank; four bytes or one-half of a byte, equal one nibble . . .). A typical game requires about 700 bytes just for the overhead of setting up the play. So we had 300 left. Now this year we had 2,000-byte capacity, which gave us a lot more to work with once the basic functions were taken care of." The "Speak & Spell" unit has two 16,000-byte memories.

Beyond voice response and expanded memory, Doyle sees alterable memory banks and more complex display screen technologies radically sophisticating computer items in the future.

"On Merlin, for instance," he syas, "we have 48 bytes of RAM, or read and alter-random access or changeable - memory. Until this year we only had ROM, or read only (unchangeable) memory. You can program 48 units of musical information into Merlin and he'll play the notes back. (Enough to play part of Beethoven's 9th). The problem is that once you turn off the switch, he forgets. That's called volatile memory. Once you get non-volatile RAM, you can have a game that can remember something about the personality of the player, and address each one differently.

"The TI 'Speak & Spell" unit shows how this could be taken even further, say to identify the child by name. I don't think we're that far from a bank teller machine that will know your individual voice print, and greet uou with something like: 'good morning Joe, do you have a cold today?" -something already done by Michael Freeman, designer of this year's 2-XL Robot in a much more sophisticated schoolroom robot that analyzes the voice patterns of the students and remembers their particular areas of weakness."

"Most individuals really have no frame of reference for computers," says Mattel's Jeff Rochlis. "They've been solutions looking for problems. One of the obvious applications was games, because of the challenge function. I think people are going to be amazed at what our little home computer will have in store for them."

Already, JS&A is offering for January shipment "space paging" systems that will tie into home computers without wires to randomly alter room lights in empty houses, control thermostats, turn on appliances and program the family Betamax. The company even has a pocket-sized $200 Craig translator, with five foreign language modules, that gives the user access to a 1,500-word vocabulary spelling words on the tiny, but simple, key-board.

"This is a surprisingly complex unit," says Sugarman," and I expect that in two years we'll be seeing a talking model. But it's still very limited compared with the home computer. Let's say you're looking for a fact-you'll just access into a data base by telephone. Or, some night your're at home and there's a certain video game you want to play. You dial into a software base and that computer will load the program for the game right into yours, or order anything out of the Sears catalogue."

The computer could also monitor news-service wires for bulletins on selected topics, or even phone an investor at his office when it detected that an earmarked stock was about to slip above or below a predetermined price.


Meanwhile, today's rather limited computers are still plagued by some uniquely human gliches.

"Simon, Simon, Simon," says Milton Bradley's Ditomassi. "We've never experienced anything like this. It started out as a blessing but now it's driving me crazy. We allocate these units, and people hear that there are 15 at a particular store and they show up half an hour before the place opens and run to the toy department and get into a brawl over who's going to get them."

It's the same at Kenner, where the 8-inch tall remote control R2D2s are being bought up faster than they can be manufactured.

"I'm hearing from all sorts of old friends," says public-relations director John Beck, "who're just wondering if there's any way we have a spare unit around because their 10 year olds really want an R2D2 for Christmas."