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Dino and Barney have a new purple reptile to contend with: Meet Spyro, the dragon that's capturing kids' imaginations while ushering in the future of physical and virtual play. Spyro is the star of Activision's video game Skylanders Spyro's Adventure and is one of 32 chip-embedded action figures that interact with whatever happens on the screen, whether it's a TV, computer, or handheld. Activision sold more than 30 million toys since its debut in late 2011, then released a sequel that adds 16 new characters. In a recent earnings call, Activision Publishing CEO Eric Hirschberg said the series, which has so far earned $500 million in U.S. sales, is "on track to become [a] billion-dollar franchise."

Illustration by Romualdo Faura