Toys are getting smarter

That means action figures that talk back, robots that follow kids around and dollhouses that resemble smart homes will become increasingly common holiday and birthday presents.

• "You can go to Target and find a whole aisle that is almost entirely smart toys," says James Zahn, senior editor of the trade publication The Toy Insider.
• "These are products that start at preschool age," and some of these small toys have the sort of advanced tech capabilities that our smartphones have, he says.

What's already out there:

• KidKraft and Amazon have partnered on a toy kitchen and market set that is Alexa-enabled.
• PlayShifu has a smart globe that comes with an app and tells kids different facts about the world when they tap on different places.
• Huge! Play has an animatronic figurine called GameBud Talking Tom that talks in real life but also interacts with kids in mobile games on their devices.

"The demand is really driven by parents, especially younger parents," Zahn says.

• Kids are spending more time on screens than they ever have, and parents want to engage them with exciting, tech-infused toys that often have educational value instead of leaving them to browse the internet on iPads, he says.

But smart toys come with the same data privacy concerns as the rest of the internet of things ecosystem, experts say.

• "These toys can come with cameras or microphones, they can connect kids to the internet or other users, and they can create personalized online accounts for kids," says Hannah Rhodes, a consumer watchdog associate with the U.S. Public Interest Research Group. All of these functions require careful parental oversight.
• While adults know how voice assistant technologies work, "children ... may not understand that they should be careful about what information they share with the toy," says Melanie Subin, director of consulting for the Future Today Institute.

• As a result, they "could give out details such as their address or date of birth that pose a risk if the toy company's systems were ever compromised."

That has happened in the past. For example, in 2015, the smart toymaker VTech had a data breach that exposed millions of kids' data.

• Still, "toys are more regulated in the U.S. than almost anywhere else in the world," Zahn says. And that regulation is likely to ramp up as smart toys get smarter and more popular.

The bottom line: Smart toys can delight kids and teach them things.

• But as toys are increasingly connected, "it will be imperative for toy manufacturers to be held accountable for data privacy and security measures, especially when catering to tiny customers who can't yet protect themselves," says Subin.