From Google+ post
I recently had to babysit my five year old nephew while all the other adults were out of the house. So, I did what any enthusiastic Uncle would do. I spent two hours drawing cars, playing a board game, playing hide and seek, and setting up an experiment from a science kit project. After two hours, I did what any rookie babysitter would do and collapsed on the floor and let him play with my iPad. My nephew then starts playing with a Cars 2 Book App.
Like any five year old Cars 2 fan, he was instantly addicted. His favorite characters were at his fingertips; he loved listening to the story over and over again; and most importantly, there was a race track that he could race against other cars.
What happens next is interesting…
I ask him for the next ten stars he gets for good behavior would he like to get another Cars 2 toy like the one I bought for him two weeks ago or another iPad Book App like the one I bought for him today.
He chose the iPad Book App.
Okay, any teenager would pick a video game over a toy, but a five year old child? The toy is pretty amazing…
Here’s the thing. The iPad App costs $7 and the toy costs $33. As a parent, the value proposition is clear. The App wins. Now a $500 iPad is an expensive toy for a five year old, but what happens when the iPad 3 comes out and parents can buy a used iPad 1 for $200? And I think the two bigger questions are:
1) What happens to the physical toy market when more and more younger kids have Tablet devices that their parents give them for edutainment?
2) What happens when a child starts valuing virtual objects more than physical ones? Especially at such a young age? Is building a virtual lego set different than a real one? Will these virtual consumers want to spend more on a virtual cup of coffee one day instead of a real cup of coffee?