The action figure category was the weakest segment of the toy business in 2006, according to information released by the NPD Group.  Action figure sales were around $1.25 billion last year, representing a 9% decline.  The severity of the decline in action figure sales can be ascribed in part to the fact that 2005 was a strong year for the action figure category thanks to the release of the final Star Wars film.

NPD expects better action figure sales in 2007 thanks to a number of blockbuster films with strong licensing potential.  Hasbro will reap most of the benefits; it has action figure rights for three big films:   Spider-Man 3, in May; Fantastic Four: Rise of the Silver Surfer in June; and Transformers in July.   

A strong holiday season boosted over-all toy sales for 2006 to $22.3 billion, a slight .34 percent gain over 2005.  As might be expected, youth electronics led the charge with a gain of 22%.