Competition: Toyland's Savior?

The man who brought you Furby is back and getting ready to launch yet another cute little electronic gadget. When Roger Shiffman walked away from his job as president of worldwide marketing for Hasbro in 2001, having earlier launched such blockbuster toys as Giga-pets, Poo-Chis and the chatty Furby, the industry was stunned. The former CEO of Tiger Electronics had pioneered the development of high-tech toys and then gone on to help Hasbro steward its branding strategies. But at 48, Shiffman decided to leave toyland behind. For several years he took cruises and worked on his golf game. After successful surgery for a brain tumor, he was even more determined to settle into retirement--except that he got bored. So Shiffman, who endorsed Hasbro's purchase of Tiger for $335 million in 1998, is jumping back into the game with a new company called Zizzle and a mysterious new toy, iZ (pronounced is).

Some say the return of the toy world's storied visionary is not a minute too soon. Toys "R" Us, hurt by price cutting from rivals, recently went private, and FAO Schwarz's parent company twice filed for bankruptcy. Meanwhile, consolidation among toymakers means Hasbro and Mattel have ever more control over what toys get sold. But even those huge toymakers feel added pressure over what to produce, thanks to the growing buying power of such huge distributors as Wal-Mart. "We need a shake-up in toys," says toy designer and Marvel Studios CEO Avi Arad. "I'm sure Roger has a couple of tricks up his sleeve."

Shiffman argues that things aren't so bad. "It's still a $20 billion industry," he says. "The challenge is to make products people want." He hopes the answer will be iZ, which will hit stores at the end of September, and he offered TIME an exclusive first peek. It's an inviting-looking 8-in.-tall, armless, posable animatronic DJ of sorts that plays infectious beats when you poke his belly. By twisting his ears, you create cool musical leads and rhythms. A dangly, antenna-like protrusion above his head triggers more sound effects when you flick it. Dozens of musical combinations are possible from iZ, whose charms include giggling, burping and farting. "He has his own edgy personality," says chief marketing officer Marc Rosenberg.

Unlike the big toy companies, which rely on market testing and focus groups to refine their new offerings, Shiffman developed iZ by following his gut. He hired Jeff Breslow, president of Big Monster Toys, the Chicago design firm, to create the new toy. "He told me, 'I want another Furby,'" says Breslow, whose team produced the prototype three months later. iZ's blinking beak adds $1 in costs, but Shiffman insisted on keeping it. He incorporated a jack so that users can hook up their iPod to play their own songs pumped up with riffs from iZ. Suggested retail price for iZ: $40.