The toy industry is tough, but you can get in it. I have two toys that are still doing well even in this economy. One difference in the toy industry is that most of the largest companies, Mattel, Hasbro, etc all want you to present things to them via a toy broker. I was fortunate to get into several companies due to my website showing that I currently have other inventions on the market. So, they were open to seeing my submissions directly.
Right now most of the toy companies I am contacting are wanting to only see toys that will sell for $15 or less in the stores. They are playing it safe. Between the China screw up with lead in many toys and the magnet choking issue they took a big hit. Now add the low economy and you can understand their caution.
If you decide to submit to a toy broker be aware most charge a fee just to look at your idea. The fee seems to be from $125 to $300 per submission. This is just a review. It does not get you in the door of Mattel or the others. Be careful you can end up sinking thousands of dollars into your presentation before it is even shown to a company.