Children ditch Barbies for iPads this Christmas as toymakers feel the squeeze

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Toymakers are likely to see their Christmas sales squeezed this year, as children ditch traditional dolls and board games for Kindles and hand-me-down tablet computers, according to analysts.

Mattel (NasdaqGS: MAT - news) , the world's largest toymaker by revenues, makes toys including Barbie dolls and Hot Wheels cars. However, a source told the Financial Times that its top selling product this Christmas was a mobile phone case.

While tablet sales continue to rise, some analysts have slashed fourth-quarter revenue forecasts for the world's largest toymakers.

"The top two guys, Mattel and Hasbro (NasdaqGS: HAS - news) , they are terrified," Sean McGowan at investment bank Needham & Company told the paper.

Hasbro, which makes Action Man and Play-Doh, is also concerned about the rise in popularity of tablet computers among children, who are spending more and more time on electronic devices.

"Clearly, young people have an aptitude for an expectation with digital platforms that we need to recognise," said John Frascotti, Hasbro's chief marketing officer.

Mattel almost went bankrupt in 1983 when it posted a $394m loss following an ill-advised venture into video games. The company got back on track in 1987 when it decided to focus on core brands.

Apple (NasdaqGS: AAPL - news) sold 14m iPads in the three months to the end of September, while Google (NasdaqGS: GOOG - news) 's Nexus (Xetra: 522090 - news) 7 tablet is selling close to one million units a month.

According to retailer Toys R Us, the most popular toys this Christmas will include Lalaloopsy Silly Hair dolls, LeapPad Explorer tablets and Lego Ninjago sets.