http://www.latimes.com/technology/la-fi-games29nov29,1,3913789.story?coll=la-headlines-technology
Video games seen benefiting from toy scares
Kathleen Buczko a mother of three, is the toy industry's Grinch this year, with plans to cut back spending on toys by 25%.
To the video game industry, she's like Santa -- because she's boosting her games budget by 600%.
The chief reason, the San Pedro resident said, is that she wants to protect her 5-year-old son from another toy crisis. Two of his favorite playthings -- a Mattel Inc. die-cast car made by Mattel Inc. and a Thomas the Tank Engine train by RC2 Corp. -- were recalled this year because of lead contamination.
"It was emotionally difficult to have to take those toys away," Buczko said. "I know there must be thousands of kids who had to go through the same thing."
There were, and that's part of the explanation for what industry analysts expect to be a very good year for video game sales and a flat one, at best, for toy sales. Games stand to benefit from the troubles in toyland: the hangover from the infamous recalls of dozens of Chinese-made items containing lead and other toxins.
Game-makers' revenues are forecast to climb 19% or more, according to Wedbush Morgan Securities, fueled by lower prices for consoles, a plethora of must-have games such as "Super Mario Galaxy" and the popularity of Nintendo Co.'s Wii and hand-held DS consoles, which appeal to a broad age range.
At the same time, retail toy sales are expected to decline by 2%, to $23 billion, said Gerrick Johnson, an analyst with BMO Capital Markets.
"There's definitely money leaving that sector," he said. "It's logical to assume that video games might be viewed by some parents as an alternative."
The recalls are contributing, but only modestly, to the growth in games, said Anita Baker, analyst at market research firm NPD Group. "Video games really kicks in for the 8- or 9-year-old," Frazier said. "The bulk of toy sales is for kids younger than that, so while they do overlap somewhat, they mainly serve different audiences."
What's driving game sales is console prices and the abundance of blockbuster games. Sony Corp. lowered the price for its PlayStation 3 consoles by $200 this fall and Microsoft Corp. dropped the price of its Xbox 360 by $50.
"Consoles are now vastly more affordable," said Michael Pachter, an analyst with Wedbush Morgan, who estimates worldwide game industry revenue to top $40 billion this year, up 19% from 2006.
Fears over a stagnant economy may also be playing into the equation.
"People are feeling the pinch from higher gas prices and uncertainty over the mortgage crisis," Pachter said. "When you're not sure about the economy, you tend to pull back. What you pull back into is the home, and things you can do at home like renting movies or playing games."
Buczko, who keeps meticulous track of her holiday budget on a spreadsheet, said she would spend $188.75 on toys this season, down 25%, and $454 on games, a sixfold increase. On her list are such titles as "Carnival Games," "Guitar Hero III" and "Brunswick Bowling."
"Our family has such a big gap in ages that it's really hard to get something that everybody can get into," said Buczko, a communications consultant whose other children are 11 and 15 and who bought a Wii this summer. "It has games for everyone."
