Girls Rule This Holiday Season: 5 Toy Companies to Consider

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Analyst Gerrick Johnson, who covers toys and physical games at BMO Capital Markets Equity Research Group, recently told the Wall Street Transcript that tablets and smartphone applications have impacted the physical games market, even more so than video games such as Xbox or PlayStation consoles.

In fact, Sony (NYSE:SNE) has come out both guns blazing with sales of its new PlayStation 4 system, reporting that more than 1 million units were sold in North America in the first 24 hours following the launch on November 15. Sony is forecasting that it will sell 5 million consoles by the end of the first quarter of 2014, outpacing the launch of its third iteration of the popular system in 2006, when 3.55 million units were sold during the same period after launch. Sony is also hoping that by keeping a lower price tag ($399) for its new console that it will generate more sales than rival Xbox One, which Microsoft (NASDAQ:MSFT) introduced on November 22 for $499.

The fact is that consumers appear to be keeping a tight rein on spending this Christmas, with a recent Gallup poll showing that Americans plan to spend $704 on Christmas presents this year. That’s down from $770 at this time last year, the lowest amount since 2010 and the fourth-lowest amount so far this century. What this likely will equate to is parents making the decision to buy one larger-ticket item and several lower-priced items for their children this year.

In the girls segment, BMO’s Johnson noted that the hottest category is fashion dolls. Fashion dolls have jumped back onto the scene with the iconic Barbie doll from Mattel Inc. (NASDAQ:MAT) losing traction in recent years to even Mattel itself with the emergence of its brands like Monster High and Ever After High.

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