Toy story reveals sad decline

The technology downturn has meant that the famous Techno Play pavilion at the American International Toy Fair last week was so small it occupied only a tiny room in the basement.

Accounting for a mere 20 of the conference's 1,600 exhibitors, this prompted analysts to wonder whether hi-tech toys are a thing of the past.

Key technology players have quit the market for gadgets as the sales of consumer electronics declined overall and toy sales experienced meagre growth.

Matthew Wu, senior sales manager at 3i Techs Development, a Taiwan-based maker of embedded speech technology, explained that the pavilion was all but deserted. "Last year, Intel was here. Sony had that whole stage for its robot dog," he said.

Sony has denied that it is retreating from the toy market. "The timing just didn't work out for us this year," said a spokesman.

However, the company has had to slash prices. It first sold the robotic dog for $2,500, but now offers comparable models for $1,500 and $1,300. A new Aibo, aimed at a younger audience, retails for $850.

Intel has said that it cannot see the long term profitability for PC-connected toys. In the past it has created such products as the Digital Movie Creator, which recorded, edited and even animated video, and the QX3 computer microscope.