Two years ago, American toy manufacturers thought they'd captured invisible lightning in a bottle.

At the center of all this high-tech hubbub was Mattel's Captain Power and the Soldiers of Fortune, a line of toys designed to operate in conjunction with a specially produced TV show of the same name.

Using $45 "power-jet" guns that reacted to invisible signals coming from the syndicated program, youthful viewers would fire away at targets on their TV screens. When their weapons connected with the signal, viewers scored a "hit"; too many misses and a miniature "pilot" was electronically ejected from the gun's "cockpit." "It's exciting, it's magic," gushed Mattel president Thomas Kalinske, whose company had spent two years perfecting the technology--called "interactive television"--that enabled the toy to react to encoded broadcast TV signals. "It looks and smells like the next trend in the toy industry." Dazzled by Mattel's techno triumph, toy-biz insiders couldn't have agreed more. Axlon Toys revealed plans for TechForce and the Moto-Monsters, an interactive television show that would enable junior commandos to participate in TV-triggered robot duels right in their very own rec rooms. The creators of Teddy Ruxpin, meanwhile, announced they were working on a TV show in which signals would interact with computerized stuffed animals. And in a bizarre juxtaposition of old and new, the Disney Channel talked of a souped-up version of Winky Dink and You, the pioneering cartoon show from the Fifties in which kids simply drew on a plastic TV screen with crayons.

Perched on the brink of this interactive volcano, Mattel optimistically predicted Captain Power sales would reach $200 million by the time the TV show premiered later that year. But when the futuristic shoot-'em-up finally hit the airwaves in the fall of 1987, hardly anyone was firing back except critics who sniped that the slam-bang adventure show was actually a thirty-minute commercial for Mattel.

"The program was designed to sell the toy, which should be illegal," says kidvid watchdog Peggy Charren, president of Action for Children's Television. "We think the word `advertisement' should have been running along the bottom of the screen the whole time the program was on the air."

But who or what really pulled Captain Power's plug? Industry observers cite a variety of contributing factors ranging from poor product performance to a prohibitive price tag. But most seem to agree that Mattel's target market was simply too busy playing Nintendo video games to be bothered with a rival TV toy that could only be used once a week.

"People are willing to invest in Nintendo, I suppose, because the quality of the product is so high," says Jodi Levin, communications director for the Toy Manufacturers of America. "It's got a proven track record and it really will absorb kids." By all accounts, Captain Power was considerably less captivating. "The bang-for-the-buck was really low," claims Levin. "These children were occupied for the thirty minutes the show was on and that was it. These toys are not where the American consumer seems to want to put his or her dollars."

But at least one manufacturer is convinced that interactive television can still be a rich and rewarding experience: Interactive Systems, the Oregon-based company that developed the interactive technology used in Mattel's ill-fated Wheel of Fortune console, is currently developing an interactive pay-per-play system which will let armchair game-show fans around the country compete against one another for actual cash and merchandise.

With the exception of encoded Wheel of Fortune broadcasts (which will continue emitting signals through next fall), interactive tube toys are history.

The Captain Power failure effectively killed the industry's enthusiasm in high-tech TV tie-ins, and today a spokeswoman for Mattel, which started it all, curtly reports that the company "is currently out of the interactive toy business."

Mattel's target market was simply too busy playing Nintendo.