Barbie pulls Carmen Sandiego

Barbie is an American Icon - a particular delight with girls everywhere as well as a certain subspecies of male homosexual. The Register admits also to a certain affinity to the dolls - from time to time we take time out from our My Little Pony Abbatoir to dust down the office Barbie collection. Favourites include: Stepford Barbie - she does everything you want without you even asking; Artie –Transexual Barbie – you can’t even see the joins; Dolly John Deere Barbie – half tractor, half sheep, wholly genetically engineered.

Unfortunately, Barbie sales are tumbling in the US. Barbie’s owner, Mattel - the Microsoft of the toy industry - blames inventory slashing by Toys R Us and other retailers, rather than a switch in affections by prepubescent girls (and a certain subspecies of...) to other toys or leisure pursuits. Mattel can’t grow its market share very much bigger - without attracting the attentions of regulators in Europe or in the US. Competition concerns stop it from swallowing up second-placed rival Hasbro.

So it’s doing the second best thing and moving into an almost entirely new market, with the $3.8bn stock acquisition of The Learning Company. Mattel is already in consumer software in a small way - but with the Learning Company, it moves to the top of the tree. TLC titles include Carmen Sandiego, National Geographic, and successful games titles Riven and Myst. TLC is Numero Uno in consumer software by default, of course. No-one else really wants to be in this heavily loss-making market, and TLC has hoovered up the interactive units of dozens of publishing companies and software houses - that have played and lost the consumer software game. Each year thousands of interactive consumer software titles are released - and most of these soon end up in OEM bundles or retailer bargain bins.

Truth is, for all but a handful of titles, consumer CD-ROMs sales suck. The Learning Company and Microsoft own most of those handful of titles. TLC already has the retail distribution channels sewn up – dealing directly with big multiple retailers, and working through specialist distributors to handle overstock, education, book and OEM markets.

Mattel won’t really open up much in the way of new distribution outlets of existing software. But think of the cross-selling opportunities - Riven demos stuck on the side of Barbie doll boxes; the interactive software brand extensions - Reader Rabbit squeals under Hot Wheels; the toy merchandising possibilities - Check out the Carmen Sandiego detective kit. It will probably go horribly wrong.®