In one corner is Mattel Inc's Max Steel, who arrived in stores last month.He is a 12-inch bionic dude who leads a double life as an internationalespionage agent and as a college student named `Josh McGrath'. A buff 19-year-old with blue eyes and giant pecs, Max is into snow-boarding,rock-climbing and scuba diving.

Max's rival is Hasbro Inc's Action Man, due in stores starting in July. Theson of a counter-terrorist, he's an adventurer with bright-blue eyes, ruddyskin and a pink scar on his right cheek. Also 12 inches tall, Action Manskateboards, skydives, climbs mountains and performs other extreme feats.Both figures come with fancy sports vehicles and fancy price tags, startingat $9.99 and reaching as high as $30 with accessories.

Unlike predecessors from Superman to the Teenage Mutant Ninja Turtles, thenew action figures deal in what one Mattel executive calls "believablefantasy." "Kids are tired of men in tights, loin cloths and capes," saysMatt Bousquette, president of Mattel's boy's toys division. Mattelinterviewed scores of children and their parents in the US and six othercountries as part of Max Steel's development. Hasbro interviewed 300 boysfrom across the US. "They want somebody who is cool and hip and youngenough to identify with. They don't want to pretend to be something theycould never be, like Batman," Bousquette says.

Mattel found from the ages of two to five most boys still thrive onimagining and acting out the exploits of fantasy heroes of the Batman ilk.But today, by about six, boys start to outgrow those fantasies and shift toreal-life heroes, especially sports stars. With the retirement ofathlete-idols such as Michael Jordan, Wayne Gretzky and John Elway, Mattelsays it saw the chance for a believable action-figure toy to fill the void.Indeed, both Mattel and Hasbro are hoping to attract boys as old as 11 -significantly older than the age at which most boys lose interest in otheraction figures, about eight, Bousquette says. "You have to recognize yourtarget audience is a little more sophisticated" than in the past, he says.

In a year when analysts are forecasting slow growth in toy sales, Mattel andHasbro hope their miniature muscle men will deliver a healthy pop in sales.In years past, action figures could deliver hefty sales: Bandai Co. Ltd.'sPower Rangers rang up $360 million at retail in 1994, its peak year. Thisyear, in the best of scenarios, Action Man and Max Steel might each generatesales of $100 million to $150 million.

Still, Mattel and Hasbro have a lot riding on their action men. Mattel ishoping to turn Max Steel into a boys' franchise with the staying power of aBarbie. Hasbro, meanwhile, already a major force in action figures with its"Star Wars," Batman and GI Joe lines, is hoping to give Action Man a secondchance at the US market, following an unsuccessful attempt in the mid-1990s.

The boys' market is notoriously fickle, and even the most successful superheros - He Man and the Masters of the Universe in the early 1980s, followedby Teenage Mutant Ninja Turtles and then the Power Rangers - had a life ofabout five years before dying out, executives say. And Mattel and Hasbroalso face formidable competition from two hot Japanese imports: Digimon, apopular line of "digital monster" figures, cards and stuffed animals fromBandai, and licensed merchandise from the violent "Dragon Ball Z" animatedTV series.

With the two new action figures so strikingly similar, success will hingealmost entirely on marketing and the popularity of the TV shows. Even thoughMattel has an almost six-month lead, some analysts give the edge to Hasbro,whose action figures make up about 50% of the US market. "We're really theleader," says Perry Drosos, Hasbro's vice president of marketing for boy'stoys. "We know what boys want." Mattel, in its research, pitched to the boysvarious story lines, ages, names and sizes for the character, ranging fromfantastical superheroes to "totally realistic figures with no specialpowers," Bousquette said.

They found boys prefer a realistic hero with "something special to set youapart," he says. Hasbro, in its research, came up against boys' interest inprofessional wrestling and saw in it a desire for reality-based heroes.Hasbro first launched Action Man in the United Kingdom in the 1960s as afatigue-clad cousin to GI Joe. Hasbro tried introducing Action Man in the USin the mid-1990s but yanked him because of tepid sales. Drosos says thestarting price of $15 was too high and the marketing plan was weak.

Hasbro relaunched Action Man in England five years ago and says he nowgenerates annual retail sales in Europe of about $300 million.

For the US relaunch, Action Man will have a $10 entry price. He also hasbeen redesigned, made younger and more muscular. Now, he wearsbright-colored Lycra clothing, not stodgy fatigues. Max Steel's Saturdaymorning cable-TV show, produced by Sony Corp's Sony Pictures Entertainmentand appearing on Time Warner Inc.'s Kids WB network, made its debut twoweeks ago, coming in third behind Pokemon and Digimon shows.

Mattel also says it will sponsor snow-boarding and other extreme sportsevents around the country. Action Man is slated to star in his owncomputer-animated TV show, on News Corp.'s Fox Kids Network in May. Hasbrois planning a major marketing campaign for Action Man, including sendingCD-ROMs with computer-game "missions" and snippets of the TV show to as manyas three million kids this summer, drawn from lists of households that haveboth purchased action figures and also own computers.

-- The Wall Street Journal