AS TOY FAIR OPENS, MANUFACTURERS EYEING A PIECE OF THE $29 BILLION U.S. MARKET ARE FINDING IT HARDER TO PRODUCE BIG HITS. WITH WRESTLING, POKEMON, AND LICENSED CHARACTERS ALL COMPETING FOR ATTENTION WITH SOCCER AND BAND PRACTICE, WHO WILL BE CROWNED THE NEXT MUST-HAVE MONSTER?

It has Furby's soulful eyes, Barbie's bouncy blonde hair, a Teletubby's jolly chubby body, and Amazing Ally's 40 megs of memory. It's one of a "set" of 400, and it's the star of its own TV show, with a feature film in development, not to mention the sequel possibilities.

Does this product sound like a winner? Maybe, and maybe not. If there were a magic formula for creating a sure thing, a toy that kids would clamor for, parents would agree to buy and retailers would rush to stock, it would be worth its weight in gold. But creating toys that strike a proper chord and surrounding them with just the right marketing messages in just the right venues to reach kids that are, in many ways, vastly different from any others that have ever lived, is indeed the search for the holy grail.

Competing in that arena has become tougher than ever, with a new set of market conditions, a handful of powerful retailers who control what products get shelf space, and a new consumer, a kid who grows out of dolls and action figures by 8 years old, can multi-task like mad, and is weaned on sophisticated computer software.

"Kids now are hardwired with a new set of DNA strands than kids of the past," said Ivy Ross, Mattel's svp-worldwide girls design. "They react quicker, they pick up new things quicker. Stimulating them is an enormous challenge."

Manufacturers ask themselves a host of questions: Does the toy satisfy a basic kid need? Is it well-executed? Is there room for it in the marketplace? Is it current and capable of starting a trend? Does it have the right amount of marketing muscle behind it? And the list goes on. Checking off those elements is a 24/7 pursuit, but it's far from a guarantee for success. Some toys that seemingly have the key building blocks fall flat, while others, sad-looking Cabbage Patch doll in a world of beautiful baby replicas, for instance, take the market by storm. Though Pokemon's U.S. debut was well-orchestrated by Nintendo, Hasbro and others, industry mavens are still hard-pressed to explain exactly why the property has caught fire. Others that flopped, despite formidable pedigrees, elicit the same type of head-scratching.

"This is not a science. You can't say if you do X,Y and Z that you'll have a hit product," said Gina Beebe, svp-mar keting at X Concepts, the Escondido, Calif.-based maker of the enormously popular Tech Deck brand of mini-skateboards that has expanded to include mini bikes, snowboards and wakeboards and micro-skateboards. "It's a fashion business."

Many industry executives say it isn't one element that puts a toy over the top, but instead a combination of factors. "It's the gestalt of the whole thing," said Perry Drosos, Hasbro's vp-marketing, boys division. "It's everything considered in total."

Because of the plethora of choices, "it all comes down to the 'wow' factor," said Marc Rosenberg, vp-promotions at Hasbro's Tiger division. "It must grab kids' attention, first and foremost."

In Furby's case, the toy was a never-before-seen melding of computer-chip innards, modeled after Giga Pet and Tamagotchi technology, and a soft, cuddly exterior at a low price point. The chattering toy which "learned" new words as kids talked to it, sold 4 million pieces in its first year and tripled that number in '99. The brand extensions keep coming, with Furby Friends launching this year, after Furby Babies sold about 2 million units.

Key to success, said Julie Halpin, CEO of The Geppetto Group, a New York-based kids advertising and marketing agency is "a combination of the timeless and the timely." The timeless taps into an underlying emotional, psychological need or growth stage that children have always had, like creativity or a sense of accomplishment. The timely relies on current social trends and social-economic factors. "Put those two together and you've got a home run," she said.

It's the getting there that's tough. Still, manufacturers have to start somewhere, and they often do in research and development, trying to fulfill one of many basic play patterns: nurturing, problem-solving, collecting, empowerment or role-playing.

Paddy Cake, Paddy Cake

The debate continues around the issue of age compression, with some observers arguing that kids today are fundamentally different than kids of the past; they are growing up quicker, and their needs are a world away from what their parents' were at the same age.

Consider the case of Hasbro's relaunch of G.I. Joe in 1982,which was aimed at an 11- to 14-year-old target.

What a difference 20 years makes. "My God, in the year 2000, the idea of a 14-year-old playing with an action figure is ridiculous," said Paul Kurnit, president of Hasbro ad agency Griffin Bacal, New York, and founder of its Kid Think consulting division. "They're living a very different lifestyle."

Industry research bears some eye-opening fruit: 75% of a child's weekday is programmed now, compared to 40% in 1981. Kids have less free play time, so toy manufacturers are competing against the Internet, friends, TV and soccer practice--a complete world of stimulation.

"Children are looking for a certain experience of fun in anything they do;' Gepetto's Halpin said. "You can find things that act like toys in the photo section, in health and beauty aids, even food. It's not a discrete world anymore

And their toys must keep pace. In fact, industry watchers say there has been a shift away from toys as traditionally defined toward "leisure products" for kids. Mattel's just-deposed leader, Jill Barad, had been touting a strategic shift from a toy company to a "global children's products" maker, and others seem to be thinking along similar lines.

"The elusive question is, what will be the paradigm for tweens that used to be in the toy space?" Kurnit wondered. "What can we borrow from? Things like music and sports and technology Vendors and toy companies alike are thinking about how to harness that and put in into a product in a box that kids would want to play with."

It begs the question: Would a pogo stick or hula hoop have a snowball's chance of success anymore?

They might, but it's likely that a younger-than-expected kid would play with them. "At S or 10, kids have a sizeable disposable income, and they decide how to spend it," said Ron Hayes, a Kenner and Warner Bros. Toys veteran, who now heads his own company, N2 Toys. "They might rent a movie, buy food, go to an arcade. We have to understand the threshold of where our toy category demos begin and end."

Tiger's Rosenberg argues that kids' core needs have not changed one bit. "The technology and flow of information have changed, they're exposed to much more, but their needs are the same as they've always been. They're still watching TV, hanging out with their friends looking for fun stuff to do," he said.

It's about creating a balance in what you offer them, added Mattel's Ross. Watch what kids play with for hours, and you will see the same play patterns, just modernized.

"Thank God we have that--we need that grounding," she said. "You can really blow out the play pattern in the broadest sense. Discover the roots of the pattern, build on it. Add the cosmetics that make it contemporary."

There's more social play now, because two-parent working households rely on daycare and playdates, where kids of yesteryear often played by themselves. Now, play has to engage more than just one kid at a time, causing shifts in the types of toys that are popular, Ross said.

In a complicated world, simplicity has its place, notes Charlotte Stuyvenberg, svp-worldwide marketing at Hasbro's Wizards of the Coast, makers of Pokemon card games. If kids can quickly pick up a product, "figure it out on their own without a lot of information being shoved down their throats," and still find some depth, the toy could find a place in their hearts.

Classic play patterns that have been ignored for a while are fertile ground for updates, said Matt Bousquette, who heads the boys/entertainment division at Mattel. Polly Pocket, for example, filled a hole in the market for miniature doll play "No one was there. It was a sweet spot that had been ignored for a while, and products can work if they come back around and hit it," he said.

For all its mystery, Pokemon does have some explicable play patterns. Laurie Klein, vp-management supervisor at Stamford, Conn.-based Just Kid Inc., which specializes in research, product development and communications for the kids market, said the property has it all: the attainment of knowledge and power, plus collectibility