The team behind the original Furby — the must-have toy of 1998 that led to fistfights in store aisles — had high hopes of re-creating...

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NEW YORK — The team behind the original Furby — the must-have toy of 1998 that led to fistfights in store aisles — had high hopes of re-creating another big toy bonanza this year with a musical playmate called iZ, launched with big marketing fanfare.

The verdict? So far, iZ has generated strong sales this holiday season, but it’s not creating the frenzied excitement that its marketers had hoped for. Maybe that’s OK, given that gadgets like iPods have replaced toys as the new cultural phenomenon.

“The hot things always reflect the culture at large and right now, gadgets and tech are where it is for adults so it is natural that is where kids’ aspirations would be,” said Chris Byrne, an independent toy consultant.

The tale of iZ shows how difficult it is to create the one must-have toy of the season — no matter how much sweat and hard-core marketing tactics invested. It also highlights how hard toy marketers have to work to come up with an electronic toy that will catch the attention of children, who are more interested in iPods and other adult gadgets.

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“I don’t think you can create the one hot hit anymore. The consumer is educated better than ever before,” said Jim Silver, editor in chief of Toy Wishes magazine. “One toy doesn’t fit all sizes.”

The first toy from new company Zizzle — founded by Roger Shiffman, co-founder of Tiger Electronics, who was behind the Furby interactive pet and other popular items like Poo-Chi and Giga Pets — was launched with a billboard at Toys R Us’ Times Square store, a concert featuring such pop-music stars as Lifehouse, and a multimillion-dollar marketing campaign. According to Zizzle officials, stores have sold several hundred thousand iZ units.

“iZ is doing very well. It is definitely one of the top sellers,” said Silver. He ranked it among the season’s top 15 hits, which isn’t bad considering there are about 500 heavily marketed holiday toys.

But he noted that its rival I-Dog — a palm-sized sleek interactive pet that responds to music with lights, sounds and movement — is “the top dog.”

While I-Dog is scarce on retailers’ shelves, analysts say that iZ is easier to find at such stores as Toys R Us and Wal-Mart, Byrne said.

Says Sean McGowan, an analyst at Harris Nesbitt. “I-Dog is cuter and cheaper.”

The 9-inch iZ character — priced at $39.99, $10 more expensive than I-Dog — has bulging eyes and three legs and allows children to create their own music — from hip-hop to jazz — by manipulating its ears, antennae and other parts. Like the I-Dog, iZ can be hooked up to any music source such as an iPod.

Shiffman, now CEO of Zizzle, is re-entering the toy business at a time when the industry is struggling with sluggish sales. Children are growing out of toys faster and are more interested in gadgets like digital-music players. Shiffman said he “wants to bring back the fun in the toy business.”

Ernie Speranza, chief marketing officer at KB Toys, and Kathleen Waugh, a spokeswoman at Toys R Us, said sales are strong. Scott McCall, chief toy officer at Wal-Mart, which just started carrying iZ, reported that sales are just average.

Shiffman — who remained at Hasbro until 2001 — had been thinking about getting back into the toy business, after getting requests from retailers. At Thanksgiving 2004, he had a vague concept of a toy that would fuse music with play.

He met with long-standing partner Jeff Breslow, president of Big Monster Toys, one of the world’s largest toy-design companies. Breslow produced a mock-up, a crude-looking toy with three legs and two eyes that bopped up and down and was pieced together with plastic and hot glue.

The team scrambled to bring it to stores in time for the holiday season. It made a number of changes, such as fine tuning the character’s hip-hop gibberish and adding bodily function sounds and a DJ mode.

Shiffman requested a plug for an iPod or other digital-musical player to give the toy, aimed at someone 5 years and older, a broader appeal and to capitalize on the iPod rage.

Zizzle’s 20-member team, based in Bannockburn, Ill., is counting on iZ to have staying power, while making steps to round out its toy portfolio. The company is negotiating with various partners to market products such as apparel and develop an animated DVD film. Next spring, consumers will see iZ on millions of Kool-Aid packages.

It’s also developing a line of toys related to the movie “Pirates of the Caribbean: Dead Man’s Chest,” as well as radio-controlled vehicles and handheld games, all of which will be in stores next year.

“I only need a small piece of the [toy] business to be successful,” said Shiffman.