Next to fire was Toys "R" Us. Earlier this week, Toys "R" Us announced it was hiring 35,000 seasonal employees nationwide. It was a signal that they felt the toy business would do just fine this holiday season.
The toy store chain put LEGO sets on sale at 30 percent off, a brand that is rarely marked down. They also offered extras with any Disney Princess purchase.
Then Target stores got into the fracas. They said they will match any toy discounts with their competition on identical items. Then Target took it one step further slashing prices on most of their toys by as much as 50 percent.
This is one war consumers don't mind being a part of.
"The competition and the price cuts are very nice. It definitely helps," said consumer Rebecca Duffield.
It's three months before Christmas, but already these are types of deals you only see after Thanksgiving.
"We're in tough times right now and I think that it's smart," said consumer Gerald Gates.
With the economy in the sour shape it's in, manufacturers have picked up on the trend towards lower prices.
Thirteen of the top 20 hottest toys are less than $30, including the Smart Builders Piano from Mega Brands, the Club Penguin Limited Edition Plush from Jakks Pacific, the U-Dance game from Hasbro and the Handy Manny Transforming Tool Truck from Fisher-Price.
Retailers are hoping they don't run out of toys, but manufacturers have cut back on production because predictions are retail sales will be down.
If this toy war continues up until the holidays, you can be sure the most popular toys will be flying off store shelves even before Thanksgiving.