Mattel, Inc. (MAT), Hasbro, Inc. (HAS): Make Way For The New Toys On the Block!

While The Walt Disney Company (NYSE:DIS)’s idea sounds similar to Skylanders, Infinity takes the formula one step further by offering an open-ended sandbox mode, where users can play with a virtual toy in the digital world, combining racetracks, soccer fields and other pieces to create their own mini-game playgrounds. Different combinations of pieces and characters can yield dramatically different results.

Infinity’s creators claim that the idea for the toy box came during the filming of Toy Story 3, and the influence is clear – just like Andy, gamers can play with toys in any way they choose. Game worlds can be collaborated on, and the virtual playgrounds can be saved by the session host.

Disney is counting on Infinity to turn around its Disney Interactive Media division, which is still operating at a loss, despite an 8% year-over-year revenue increase last quarter. Disney has notably scaled back on its video game operations, closing down Lucasfilm’s Lucasarts video game division and handing over the reins of its Star Wars game franchise to Electronic Arts Inc. (NASDAQ:EA).

If Infinity can replicate some of the success of Activision’s Skylanders when it is released this summer, then Disney could have a big hit on its hands and the segment could finally return to profitability.

The Foolish Bottom Line

Kids are lucky these days. Not only do they play some of the most graphically polished video games in history, but they also get interactive hybrid toys that blur the line between physical and digital toys.

Exciting times for kids also create exciting opportunities for investors. Activision Blizzard, Inc. (NASDAQ:ATVI) and Disney, which both generate their core revenue elsewhere, have very little to lose and plenty to gain if Skylanders and Infinity succeed. Meanwhile, I wouldn’t be surprised if Hasbro, Inc. (NASDAQ:HAS) and Mattel, Inc. (NASDAQ:MAT), which are looking for ways to stay cool and relevant with young boys, started creating similar products of their own.

Even though the battle has evolved, human nature remains the same. Whether or not it’s a cardboard box being spilled on a bedroom floor, or fancy NFC-equipped figurines being placed on console-connected pedestals, kids will always love to play and create new worlds, and there will always be a market for it.

The article Make Way For The New Toys On the Block! originally appeared on Fool.com and is written by Leo Sun.

Leo Sun owns shares of Walt Disney. The Motley Fool recommends Activision Blizzard, Hasbro, Mattel, and Walt Disney. The Motley Fool owns shares of Activision Blizzard, Hasbro, and Walt Disney. Leo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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