• The Wall Street Journal, Wednesday, December 19, 2007 11:30 AM

With one weekend left before Christmas, the toy industry finds itself competing with the resurging popularity of entertainment systems from Nintendo, Sony and Microsoft along with recently released videogame titles. Then add Apple's iPhone to the picture.

It all adds up to the toy industry's ongoing struggle against "age compression," the phenomenon of young children reaching for items used by older kids or even adults. These days, kids are grabbing for more adult experiences at ever younger ages, making it ever harder for traditional toys to capture children's imagination.

According to market-research firm NPD Funworld, children begin playing with computers at age 5 1/2; CDs and DVD players around 6; and music players around 8--all slightly younger than two years ago. Parents often use and share the same items, which are often far more expensive than the average toy and therefore lock up a lot of the holiday budget.

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