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But as other companies like Ives and American Flyer entered the market, Lionel started advertising its trains in magazines as "just what you want for Christmas." As train sets became more affordable, families began to recreate smaller versions of the department-store displays beneath their Christmas trees. In December, Lionel's Model Builder magazine usually included layouts for Christmas tree displays.
"There is no other toy associated more with Christmas than the model train," said John Sipple, editor of the Model Railroad News, a monthly publication with about 12,000 readers. "Every year, when the Christmas tree goes up, so does the train set around it."
Despite competition from more and more high-tech toys in recent decades, model trains have survived, mostly because they appeal to people of all ages. Electric toy trains particularly captivate children, who do not fully understand how they work, Mr. Sipple said. "Kids don't automatically know that the flanges on the wheels keep the trains on the track," he said. "They just love the fact that one car follows the next, that they go in and out of tunnels, and across bridges."
The introduction of the Thomas the Tank Engine trains in recent years has allowed very young children to build their own layouts. As they get older, they move on to electric trains, and when they become teenagers the sets are usually put away. "They come back when they start a family and their disposable income gets to the level to sustain a hobby," said Allen Pollock, president of the National Model Railroad Association, which has 20,000 members.