Film world's cast of toys teleport into digital playground

LOS ANGELES Fri Aug 1, 2014 8:00am EDT

LOS ANGELES Aug 1 (Reuters) - Those ubiquitous Angry Birds flew from the mobile screen to the toy store, hooked up with Hollywood, and are headed back to the digital world thanks to the telepod.

That is toymaker Hasbro Inc's answer to merging the physical and digital worlds of children's play in what the industry calls "toys-to-life." And like another leading toy company, Walt Disney Co, they are finding fans among the fervent audiences for action and superhero films.

Hasbro's Angry Bird telepods were a big attraction last weekend at San Diego's Comic-Con, an annual gathering of 130,000 comic and entertainment enthusiasts, with fans lining up to preview new Transformers-themed bird figurines containing miniscule codes that can be read by tablets.

The Angry Birds Transformers telepods, featuring "Autobirds" and "Deceptihogs," is due out on Oct. 15, spinning off the success of Paramount Pictures' June box office hit, "Transformers: Age of Extinction."

Licensed toys have become a key to extending the entertainment content revenue stream, with U.S. retail sales in 2013 of $5.3 billion, according to research company The NPD Group.

In the first quarter of 2014, the top licensed toys included Disney's princess lines and "Frozen" toys, which helped Disney bring in $885 million in consumer products revenue, about 8 percent of the company's overall revenue during that time.

The new "toys-to-life" category grew 47 percent in a 12-month period ending June 2014 to $437 million in sales in the United States, according to NPD's gaming analyst Liam Callahan.

Retail analyst Stephanie Wissink at Piper Jaffray estimates that by 2018, 25 percent of toys will incorporate a digital component or integration with electronic devices.

'MOVING SEAMLESSLY'

"Kids enjoy both analog and digital play and they like moving seamlessly between the two," said John Frascotti, Hasbro's global chief marketing officer.

Using the bird and pig characters from Rovio Entertainment's Angry Birds mobile game app, consumers can place the physical figurine onto a plastic block and put it on a tablet's reader, which then recognizes the character via its magnetic code and imports it into the digital game.

Frascotti said Hasbro's 2015 line of Transformers robot toys will incorporate a digital element. The company is also likely to partner with Disney on toys tied to next year's anticipated "Star Wars" film, and Star Wars is already a top seller in the licensed toys market.

Disney made a loud entrance into the toys-to-life market with Disney Infinity, an interactive master game to which new characters and adventures are added.

With Marvel's "Captain America: The Winter Soldier" and "Guardians of the Galaxy" making a big splash at the box office this year, Disney is catering to the feverish demand for all things superhero by incorporating Marvel characters into Disney Infinity as of Sept. 23.

Consumers can buy collectible figurines of Disney characters such as Elsa from Oscar-winning hit "Frozen" or Marvel's Captain America, which have discs embedded with data chips that when placed on the Infinity Reader, can import the figure in the game. As characters advance through the digital game, the information is saved into the figurine.

"Physical toy sets are definitely not fading out," said Peter Phillips, senior vice president and general manager of Marvel's digital media group.

"The fact that we integrated a toy line as part of the game just shows that the two can work hand in hand very closely together." (Additional reporting by Lisa Richwine; Editing by Mary Milliken and Ken Wills)