Mattel Gambles on Pricey Elmo for Holidays ($60 Elmo doll)

WSJ ^ | 10/10/08 | Nicholas Casey

[SilvieWaldorfMD]

For nearly two years, designers at Mattel Inc.'s Fisher-Price toiled to hide a maze of copper wires and microchips under the plush red fur of the company's newest Elmo toy. The resulting "Elmo Live" is its most advanced ever, able to cross its legs, flap its arms and fluidly mimic the famous television Muppet.

All that wizardry, however, comes at a steep price. When Elmo Live arrives in stores on Tuesday, it will cost $60 -- about a third more than last year's model, and above the $50 tag that once was the high-water mark for most toys. Elmo Live hits stores as economic uncertainty is gripping consumers and prompting retailers such as Wal-Mart Stores Inc. and KB Toys Inc. to pitch low-cost toys to lure customers.

Higher prices are an inevitable consequence of toy makers' attempts in recent years to compete with videogames by embracing sophisticated electronics. Coupled with rising transportation costs and labor inflation in China, the result may be the untimely release of high-priced toys.

There is an unusually rich slate of expensive items coming to market this Christmas. In addition to Elmo, Mattel is bringing out a duo of robotic dinosaurs: a $150 toy called D-Rex and another priced at $130 called Spike. Hasbro Inc. is offering a $180 robotic dog called Biscuit that responds to voice commands and wags its tail. Jakks Pacific Inc. is selling a new pair of night vision $80 goggles that let kids see in the dark.

"When we were talking about it even a year ago, the economy was in a different place," concedes Mattel Brands President Neil Friedman. Elmo Live still costs "less than a tank of gas," says Robert Eckert, chairman and chief executive of El Segundo, Calif.-based Mattel.

[SilvieWaldorfMD]

Would you spend $60 for a talking Elmo doll in this economy?

[IbJensen]

Would you spend $60 for an NPR, Chinese Elmo Doll that has been dipped in lead?

[Coldwater Creek]

Would you spend $60 in any economy for a 4 year old to drag through the yard?

Not me!

[bikerman]

able to cross its legs, flap its arms and fluidly mimic the famous television Muppet.

Sounds like NoBama.

[ari-freedom]

Times have changed

[CriticalJ]

Mortgage Me Elmo

[Think free or die]

I guess I could afford a $60 Elmo if I didn’t pay my mortgage. . .

[fieldmarshaldj]

Tickle me wallet.

[ari-freedom]

I could afford a $60 Elmo because I saved a lot of money by switching to Geico!

[avid]

Haha, I dig it:

http://www.youtube.com/watch?v=dVUPTTkIBVI

[Vaquero]

a young Algore checks to see if this earlier Mattel product is loaded.

[kenth]

ROFL

[absolootezer0]

if it were an animal, kermit, gonzo or a rowlf, maybe. but i can’t stand elmo.

[Vaquero]

http://www.youtube.com/watch?v=7DpDtQ_uews&NR=1

[Right Wing Assault]

I bet there are people standing in line at the toy stores already.

[Anti-Bubba182]

How about:

Johnny Mortgage Banker!

[Virginia Ridgerunner]

This is indeed pretty stupid, Silvie. I've got a three-year-old son with more toys than he can possibly ever play with (courtesy of grandparents, friends, co-workers, etc.) Some of them are quite sophisticated and take some dexterity and thought to operate. Needless to say, those are the ones that sit at the bottom of his toy chest.

Instead, he LOVES his $.97 Hot Wheels cars and various rubber balls, which he can throw and kick at will. We also have a couple of foam pirates swords that I got real cheap at Kay-B-Toys for our nightly light saber battles in Mommie's kitchen. :)

$60 Elmo? No thanks!

[ClaudiusI]

Government Bailout Elmo? “Ha ha ha, we’re all socialists now. Ha ha ha, tickle me again, comrade.”

[RU88]

Sales of these dolls will fall like a drunk on a three day bender.