Gotcha!

That's the name of one of the hottest, and most controversial, toys of the 1987 Christmas season. It may also be the cry of satisfied customers, because Entertech's Gotcha! -- a gun that shoots exploding paint capsules ($29.99, plus $12.99 for refills) -- looks like the Toy Most Likely to Cause Consumer Panic (not to mention Parental Paranoia) in 1987. Even if the manufacturer claims it's Not A Toy.

If you like, you can tape that consumer panic on Fisher-Price's PXL 2000 Deluxe Camcorder System, a $225 portable video camera designed for "creative teens." The PXL 2000 uses a regular high-bias 90-minute audio cassette to record 10 minutes of black-and-white video images in a process called Pixelvision; you also get a 4 1/2-inch mini-TV for playback, so no other VCR or television is needed.

Or you can sit out the panic with your a-peeling new friends, the Couch Potatoes (Coleco Industries, $29.99) -- soft, pillowlike creatures that come wrapped in their own sacks and wear an appropriately dazed expression. "A great little fad," says Rick Anguilla, editor of Toy and Hobby World, the leading industry journal. "It's a neat concept and American consumers are always willing to jump on a concept like that and Pet Rocks."

Which is why there's Wisecracking ALF (Coleco, $39.99); Mr. Game Show (Galoob, $99.99), several games run by 14-inch host Gus Glitz, who proudly displays his "oversize ego and patented insincerity"; and inevitably, Talking Cabbage Patch Kids (Coleco, $99.99) to go along with Cabbage Patch Kids Splashin' Kids ($24.99) and Cabbage Patch Kids' Pets ($9.99). This and all other prices listed in this article are those currently charged at a local Toys R Us.

Also hot: video games in general and the Nintendo Entertainment Center in particular; Captain Power, the TV-interactive toy line; all kinds of radio-controlled toys, especially Tyco's Super Turbo ($129.99) and Nikko's Malibu Beast ($189.99), which, like so many real cars, are made in Japan; Hasbro's Pogo Ball ($13.99), a big bouncing rubber sphere with a Saturn-like disc to stand on; the Games Gang's Pictionary ($30), a new adult board game in which charades are played out through sketches -- no letters, words or numbers allowed; and high-tech versions of traditional games, like Electronic Battleship (Milton Bradley, $39.99).

Everything old is new again.

"Look at Teddy Ruxpin and Lazer Tag," says Anguilla. "In a sense, they're updates of traditional toys -- a bear, but the bear talks, and a gun, but a gun that shoots an invisible infrared beam. There's not a lot of room for innovation in terms of totally new items. You look for innovations in updating though new technology."

Which means more talking dolls and plush animals full of sensors, microchips, audio tapes and other high-tech innards. "That's a problem with dolls today," says Anguilla. "You show them to kids and they say, 'But what does it do?' "

For instance, does it shop for Christmas toys?

Santa's Workshop Talk

Today's the first day of the Christmas daze. The toy industry does as much as 70 percent of its business in the last quarter of the year, and the next five weeks are "the real heat of the season," according to Anguilla. He predicts that 1987 sales will advance only slightly -- maybe 1 percent -- over last year's $12.5 billion total, and that many toy manufacturers will suffer earnings declines or losses because of a series of earlier market flops.

No, the flat market wasn't caused by Wall Street's October egg. Stock market volatility, Anguilla says, traditionally doesn't affect toy sales. "You'd probably not buy for your significant other before you would not buy for your kid."

This year's toy market, according to Kidder Peabody analyst Gary Jacobson, "is not a disaster, but it's soft. The new toys introduced for 1987 were generally disappointing, and that's where growth comes from." During 1984 and 1985, Jacobson explains, "toy companies were able to introduce products that instantly became what I'd call megahits" -- like Cabbage Patch Kids and Trivial Pursuit -- "in the $250 million range in revenues."

That didn't happen last year and is not likely to happen this year, either.

"There's no clear standout like there has been in the past," says Eileen Nechas, executive editor of Children magazine. "That's why Barbie and G.I. Joe are still Number 1 and Number 2. In fact, there's a back-to-basics trend with a high-tech twist -- battery-operated toys are up this year."

Jacobson notes that many companies overextended and had to cut back when business didn't live up to expectations. For instance, Worlds of Wonder, which came up with both Teddy Ruxpin and Lazer Tag, is going through a major reorganization -- "I don't think it'll be around in its current form after the Toy Fair" in February -- and canceled one of its 1987 offerings, Wondervision, a robotlike modular unit with a 13-inch color TV, VHS player, AM/FM radio, cassette player, headphones and remote speakers priced at $795.

$795?

"There's a fine line between brilliant marketing and people saying 'What?' " Anguilla explains. "You have to maintain that thinking that Fisher-Price and Hasbro and Mattel have of 'Let's see what we can get price-wise but let's make sure that as consumers they'll see it as being price efficient.' A toy for $225? Automatically, people think you're crazy. But tell them it's a video camera and they can play back 10 minutes of black-and-white tape without a VCR, right then you start to justify it."

Toyflation

Where Black Monday may have an effect is on high-priced toys, and those prices have been getting higher and higher in the past decade, and will probably continue to go higher, at least through this Christmas.

"The magic number 10 years ago was $9.99," Jacobson says. "If you could get it on the shelves for that price, you'd do very well."

All that started changing with Trivial Pursuit and Cabbage Patch and the original onslaught of video games six years ago, which "prepared people and showed they're willing to pay," says Anguilla. "Before Trivial Pursuit, you never had a board game for more than $10 and all of a sudden here's a game for $30 and people are buying it by the truckload. And $50 for Cabbage Patch Kids was unheard of at the time.

"It opened people's eyes because American consumers have gotten to the point where if something has the perceived value of a talking doll versus a nontalking doll, they'll pay for it. People expect to pay for things in this country." In 1987, Anguilla says, they will spend "about $200 per child" on toys.

Which may be why Fisher-Price, which has a long history of producing durable and simple electronics equipment for the preschool set, is jumping into the teen-age market for the first time. The PXL 2000 represents the company's largest investment ever in a single toy, but it may soon have company in the kiddy camcorder market. Sony Corp., itself a leader at making electronics smaller, is now making its smaller electronics for smaller consumers, breaking into the American toy market with My First Sony, a line of durable audio products geared toward 12- to 14-year-olds but with function buttons that can be operated by children as young as 4.

Sony's kiddy line includes unbreakable cassette players, a Walkman headphone stereo tape player and a walkie-talkie headset (prices range from $35 to $60). Parents take note: The Walkman even has a device that keeps it from being played at high volumes. If the Sony line does well, look for the company to expand to black-and-white televisions and camcorders for kids.

When Is a Toy Not a Toy

No toy has created as much controversy this year as Entertech's Gotcha!, which is proving to be hot among teens and adults. A spinoff from the technology of mock war games and survivalist training programs, the plastic snub-nosed machine gun shoots brightly colored liquid pellets that explode on contact. It's already been attacked as unsafe by the Consumer Product Safety Commission and the Consumer Affairs Committee of Americans for Democratic Action, who say it not only leaves a mess but poses a danger to players' eyes. The kit comes with 25 bursts of ammo (additional rounds are $12.99), plastic goggles and a manual, which recommends a protective outfit (available for $10), suggests the game be played outdoors and advises that the gun not be fired at a distance of less than five feet.

Additionally, Gotcha! is not recommended for people under 16, and Entertech has tried to shift the safety burden to retailers by printing a warning on the box saying, "This is not a toy."

"Then it should not be sold in toy stores," says Ann Brown, chairwoman of the ADA consumer committee. "If a person is not wearing goggles and shoots too close, it could easily put out an eye." Some stores are limiting access to Gotcha!, including Toys, Etc. in Potomac, which has tacked a sign near its Gotcha! display saying, "Due to the violent nature of the Gotcha! gun and the mess it makes, you must be a mature 16 years or older to purchase this item. You must be able to prove your age by photo ID, or have a parent, not an older brother or sister with you. Sorry. No exceptions. Thank you."

Gotcha! is not being advertised in television's traditional "kiddy programming" hours (though it's on the front page of a recent ad supplement for Toys R Us). "Controversy aside, it's a pretty interesting toy," says Anguilla. "You can look at it as a reflection of society, where parents go away to those 'weekend warrior' type events for $500. It reflects reality. If there's no market for it, if the American people don't want it, they won't buy it. You can't fault manufacturers for it."

Of course, the whole toy gun field is going through some changes. Last week Toys R Us, with 19 stores in Maryland and Virginia and 15 percent of the nation's market, announced it would stop selling realistic-looking toy guns after its current inventories were depleted. Legislation has been passed in some communities banning sales and use of realistic toy guns following a spate of accidental deaths and crimes in which replicas were used. (A bill that would ban toy guns in the District died in committee last year.)

Power Plays

Another of the hot toy lines of 1987, Mattel's Captain Power and the Soldiers of the Future (from $9.99 to $29.99), has had its share of controversy since its introduction in September. Last year, Lazer Tag was the hottest new item, with its infrared light beams capable of shooting at sensors 100 feet away; it was a much copied angle, though it never took off at the levels some industry observers had predicted. Now Captain Power uses that technology to transform television viewing from passive to active.

"I think it's an evolving technology," says Anguilla. "Lazer Tag was rudimentary ... Captain Power is the next generation. You're able to actively interact -- you shoot at the TV and it shoots back at you." I'm sure that next year's stuff will be a lot more sophisticated."

Critics of Captain Power and its inevitable successors say such interactive toys not only nurture violence and reflective aggression, turning television into a video shooting gallery, but create two classes of viewers: children who have the interactive toys and those who don't. And interactive toys further tighten the much-criticized connection between programming and products -- to play, you have to buy the product.

In the wings: World Event's Saber Rider and the Star Sheriffs (the television show started in September, though the toys won't be available until next year; the show is prepping for the toys in six languages, 70 markets and 40 countries). Anguilla predicts that these toy lines are just the early manifestations of a new genre of interactive products; in the next few years, he says, there will be many more adult lines in the form of games and educational programs.

For anti-interactive parents, there are some low-tech options. Water guns are back, from Multi-Toy's Water Laser Glove ($9.99, with a 20-foot range) and Entertech's Water Grenade Set ($11.99) to Coleco's Blast Force Water Blast Power Cycle ($24.99), which looks like a Big Wheel with a water cannon capable of shooting 30 feet.

"It's real symbolic of a parallel growth of high-tech and low-tech," says Anguilla. "Basics will have a very strong year. It's not like high-tech is the story for 1987. It's more of a realignment ... Fisher-Price, Lego, building blocks, Matchbox cars, G.I. Joe and Barbie will continue to prosper.

"For instance, Fisher-Price introduced a new line, Fun With Food {$9.99 to $19.99}, an updated version of play food, and it's selling tremendously well. But it's more realistic. Kids are more sophisticated, so now when you put the spatula on the skillet of the kitchen set, it sizzles."

Veni, Video, Vici

But it doesn't sizzle like video games. The success story of 1987 is also the comeback story of the year.

"Cabbage Patch in its peak year, 1984, did $600 million," says Anguilla. "This year Nintendo will probably end up the big dollar winner. Nintendo of America estimates their 1987 sales at $650 million and that's just one product: a video game and entertainment system, plus the games that are available for it." The annual North Pole Poll, a survey of 200 toy retailers around the country, predicts that the Nintendo Entertainment System ($139 plus software) will bring in the most money this holiday season.

Jacobson thinks Nintendo's sales may actually push past $700 million, which would make it the single largest toy, bigger even than Barbie. "It's an excellent product with superior graphics and software, and the games are interesting," he says. This from a product line all but written off by the toy industry a few years back.

"The American consumers never gave up on the video game business," says Anguilla. "It was the American manufacturers and retailers who were understandably reluctant to stay in a business that had caused such great losses ... Nintendo came in 1985 and test-marketed {its product} in major cities and did pretty well, but when they were shopping it around, they met a lot of resistance from retailers who were just finished cleaning out two years' worth of inventory."

In this boom-to-bust-to-boom story, Nintendo dominates the market (up to 70 percent, Jacobson says), followed by Sega and Atari (the Master System and the XE-2 being at the top of their respective lines).

The success of these video systems has had a noticeable impact on the market for boys' "action figures," which Jacobson thinks will dip further as "a lot of boys'-action dollars will be going into video." Anguilla agrees, adding that "toy-based TV programming has largely disappointed people, and the perception that you put a show out and action figures will sell isn't true anymore. There's just too many of them out there and not enough room for them to all be popular."

Pictures and Words

Last year marked the emergence of VCR games, mostly titles based on mystery and sports. The big hits were NFL VCR Quarterback (VCR Enterprises) and Clue (Parker Bros., which actually came out the year before). Not surprisingly, this year's potential hits include Clue II: Murder in Disguise (Parker Bros., $39, with 18 new mysteries) and 221-B Baker Street (VCR Enterprises, $44, 10 adventures).

Other entries include Agatha Christie: The Scoop (Spinnaker Software, $19.95) and Murder Mystery Video Party Games (J2 Communications, $30), the latter based on the latest fad for mystery buffs, acting out the crime. The mystery VCR games tend to be more interactive, while the sports tapes are basically glorified board games. There are VCR College Bowl Game (Video Cassette Games, $45), VCR Top Rank Boxing Game (VCR Enterprises, $45) and Let's Go to the Races (Parker Bros., $30). There's even the multisport ABC Sports Winter Olympics (Mindscape, $50).

Milton Bradley offers VCR versions of Candy Land and Chutes and Ladders ($25 each), while Disney offers Movie Classics and Cartoon Classics games (at $20 each).

Traditional board games, of course, continue to be a staple of the toy industry. "Milton Bradley and Parker Brothers will both have record years," predicts Jacobson, and most of the traditional games -- Scrabble, Monopoly, Clue and late bloomers like Trivial Pursuit -- continue to do well.

There are lots of variations on word games this year, several of them based on bluffing your opponents with invented definitions. They include Winning Words (Games Gang, $30), by longtime Readers Digest columnist Peter "It Pays to Enrich Your Word Power" Funk; The Dictionary Game (Us Productions, $30), an adventure in wit, wordplay and imagination that originated in France 50 years ago with surrealist poet Andre Breton (a big hit in Canada, it comes in both French and English versions); You Said It! (Innovations of Dallas, $19.95); Uncommon Sense (Us Productions, $29.95); and Twenty Questions (University Games, $25). And then there's Outburst -- The Uncommon Game of Common Knowledge (Western Publishing, $19-$24), in which something is named and contestants free-associate words and get points for matching 10 authorized choices (i.e. -- "noses -- Durante, Nixon, Hope, Streisand, etc").

Tired of wordplay? There's Raise the Titanic (Houle, $20), a strategy game in which people compete to salvage a logbook and other artifacts from a model ship held down by a spring action; as valuables are removed, the Titanic slowly starts coming up, and players race to arrive in port with the most money.

There's also Platoon (Avalon Hill Game Co., $16), with the movie's characters still pawns to battlefield strategy (no, there are no figures representing HBO Pictures and Hemsdale, whose conflicting market strategy has kept the "Platoon" video out of the stores).

If politics is your cup of tea, you can go pro or con. Hail to the Chief! (Aristoplay, $25) recruits you for the highest office via delegate votes, while Corruption: A Game of Backroom Politics (J.W. Small Co., $26) sends public servants scrambling up the political ladder while lining their pockets with bribes, payoffs and kickbacks.

Buys and Dolls

Among dolls, Talking Cabbage Patch Kids will do well, and other talkative entries include Max Backtalk (Milton Bradley, $39.99), an electronic update of Simon; and Baby Heather (Mattel, $109.99), who can be programmed to wake up and ask for food at certain times (if only babies could be, too). Heather also matures "verbally" and "esthetically" (from a six-month-old infant to a 1-year-old baby to a 2-year-old toddler), has 30 different behaviors and even gets sick. And Worlds of Wonder's Julie ($119.99) uses simulated artificial intelligence to hold personal conversations with a child. A 126-kilobyte computer memory and full animation make this Julie mighty realistic.

Back in the land of silent dolls are the soft-bodied but "standable" Wanna-Bes (Wanna-Be Inc., $50), role model dolls -- doctors, executives, teachers, soldiers -- that come with informative coloring books, certificates of education from Wanna-Be U, and a toll-free number for kids to call about the educational requirements of each doll. Surprisingly, there's no Madonna Wanna-Be doll, but for hip tykes and teen-agers there's the Express-It Answer Machine (Class Act, $39.99): Hang it inside your school locker and people sidle up to leave messages.

Ugly toys come and go, but this year boys (ages 7 to 11, the major market) and girls can create their own with Mattel's The Mad Scientist Monster Lab, ($15.99) which comes with both flesh compound and ice compound, for making ice monsters. Tired of them? Throw them into the Monster Vat and watch them bubble away. You can also get a Dissect an Alien kit with 12 puzzle parts but, alas, no ALF.

On the other hand, precomputers and electronic tutors geared to 2- to 6-year-olds remain a very hot, though unsexy, corner of the market. According to Children magazine's Nechas, research shows that half the families in America with children from 3 to 11 have at least one electronic tutor in the house already.

Which, of course, just puts more pressure on parents trying to chose the right thing. In some circles, there's concern that the more a toy can do, the less the child does; that the current emphasis on realism erodes the use of imagination, which is so important to a child's play and development; and that some toys overly structure playtime simply because they are programmed.

Still, with any toy, the true test of worth comes in midwinter, when the novelty has worn off.

"When you buy toys for a child," advises Nechas, "you want to get a variety that stimulates the creative mind and promotes physical ability, some that are appropriate for social interaction and some for solitary activity as well. Look for safe toys, and most importantly, for what your individual child is going to like.