CHANGE: Mattel and Hasbro ‘terrified’: Do kids want gadgets more than toys?

The 2012 holiday season may have been the worst for retailers since the financial crisis, with sales growth far below expectations, forcing many to offer massive post-Christmas discounts in hopes of shedding excess inventory. While chains like Wal-Mart Stores Inc and Gap Inc are thought to have done well, analysts expect much less from the likes of Barnes & Noble Inc and J. C. Penney Co. . . .

While hot toys such as certain Mattel Inc Barbie dolls performed well, toymakers worry that traditional children’s gifts may lose out long-term to high-tech gadgets.

“The top two guys, Mattel and Hasbro, they are terrified,” Sean McGowan, managing director of equity research at Needham & Company, told the Financial Times. “They should be terrified, but the official party line is they’re not terrified.”

They should be.