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Fe, fi, fo, fum, we smell the coins of dads and mums. Since its first release on consoles last year, Skylanders has exploded into a multi-million dollar franchise and a children's favourite. What would have been a fairly standard hack-and-slash game by itself was taken to new heights thanks to a clever reliance on collectable figurines. Perhaps wisely, Skylanders Giants doesn't stray from last year's successful formula, but offers up a few tweaks.

The basic concept of Skylanders is that playable characters are represented by actual plastic toys. Place one on a special plinth, the Portal of Power, and it'll pop up in the game. Each of the well-built toys has different in-game abilities, a unique look and can be given a special nickname. All toys from the first game can be used with Skylanders Giants, though be careful when buying the newer figures – some, such as Giants, won't work in Skylanders: Spyro's Adventure. The latest toys can now reach level 15; the first lot peaked at level 10.

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The smartest thing is that statuettes track statistics, which allows you to bring up your own personalised Skylander in any version of the game. Play some of the game with your favourite character on Wii, then pick it up and take it over to a friend's place and all your abilities will carry over with you to their PlayStation 3 version, for example.

Skylanders Giants' actual game is a pretty simple affair: you charge around levels smashing up anything in sight, gaining experience while hunting out loot and collectables so that you can keep upgrading your character and solving the occasional easy puzzle. You can switch characters at any time by swapping the figure on the Portal of Power. If a character runs out of health, it's no longer usable for that level unless the chapter is restarted, which can leave you stuck if you're short on figures.

The big new additions are, of course, the titular Giants; these Skylanders are twice the size of the normal lot, both on screen and in figure form. These hulks boast massive physical power, so they can pick up rocks that would make Spyro sweat just to look at, smash down walls that others can only overcome with a bomb and dive through cracked flooring to access new areas. The lumbering beasts can walk straight through any destructible objects and reduce them to rubble effortlessly. Crucially – and dangerously for parents' wallets – the bigger toys have fancy light up parts that glow whenever they're placed on the Portal of Power. Tree-Rex's neon blue eyes are far more cool than they have any right to be.

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The starter pack comes with everything you need to play the game: a USB Portal of Power, with a mercifully lengthy near-three metre long cable, and a trio of character figures of numerous types. The aforementioned Tree-Rex makes up the Giant demographic, while hawk-with-a-handgun Jet-Vac and ghost-summoning dragon Cynder represent the Flight and Undead categories respectively.

The combination of these characters is enough to get you through the core game, but there are sectioned off areas that can only be accessed with certain types – you'll need one toy from each of the eight types to uncover every secret. There are sneaky collectable Soul Gems that are little more than in-game advertisements; grab one and you unlock a new ability for a toy you might not yet own, and get the chance to watch a quick video clip showing off their skills. You can practically hear the wails of a thousand pleading children.

Skylanders Giants has enough about it to shield it from complete cynicism, however; even putting aside those little lumps of plastic, it's a good game in its own right. There's clearly a fair bit of care put into making it not only suited to children but also one that won't bore any watching parents, and multiple difficulty settings ensure it can suit everybody. Levels are generally straightforward affairs, progression never far away thanks to a hint system that shows you where to go next without being overbearing, but they each hide secrets, side-paths and extra objects to discover.

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There's plenty to get your claws on: treasure chests filled with gold and trinkets, story scrolls, sapphire wings that give you discounts in the shop. There's also a collection of hats, which both enhance the statistics of the wearer and look funny – you've never seen a tree monster until it's wearing a birthday cake for a hat.

Additional hats can be bought in the shop, but you might prefer to save your money for power upgrades. Thrust your money into the pockets of a pixie and she'll unlock new skills and boost existing ones. Cynder, for example, can have her lightning beefed up, learn to fly and adopt a ghostly friend with enough coins. There are separate upgrade paths, too, to emphasise different sides of their move-sets.

There's a decent amount of variety to cater to those roaming attention spans, and not just from the vast range of uniquely skilled characters. The usual sorts of levels are in there – ice world, grassy world, you know the sort – as well as more inventive ones, such as a particularly attractive diorama-style stage early on. Frequently you're invited to take part in mini-games, such as square-rotating puzzles to unlock doors and an addictive little board game called Skystones, where the winner is the one with the most stones left on the slab at the end.

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The main play style is interrupted by shooter sections that use the Wii Remote pointer, and you often find yourself in arena battles against large numbers of enemies. Many of these activities are available whenever you want from the hub boat, where you can also find extra one-off Heroic Challenge levels, where you're set tasks such as rescuing a choir of warbling geckos or racing around a track against a time limit.

There's support for two player local co-op throughout the entire campaign. It's a shame there's no online functionality, but local-only makes sense with the figure aspect: it's intended to be played by parents and children, or friends taking their toys around to each other's houses. If you've only got a few statues sessions might not last long, though; characters still become inactive for the duration of the level if their energy is depleted in co-op, so the 'lives' are essentially shared between both players.

The multiplayer battle modes are a riot as well; again, two player offline only, and here each player is only allowed one Skylander. The best of the bunch is Arena Rumble, an all-out battle to the death where each player must take advantage of their character's skills, bounce pads, teleporters and randomly generating items such as the self-explanatory rocket hats.

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Similar is Ring Out, except the aim is to weaken the opponent before trying to knock them out of the arena, Smash Bros. style. Sky Gems has players racing to be the first to pick up five gems, stealing jewels by attacking each other. The final mode is Skygoals, which pairs Skylanders for a game of simplified American football in a battle for points against the clock. It's easily the weakest of the four; the action ends up taking place entirely around the uprights while the rest of the map goes ignored.

The great CGI cut scenes dotted throughout the lengthy story have a real cartoon vibe to them, and that feeling is supported by the comical writing. It's very much aimed at children, but with each character voice acted and some fun references it's reasonably entertaining for grown ups too. The fantastical art style looks good, with accurate shadows, reflections and a few particle effects helping out. It is blighted somewhat by more slowdown than we'd like, though, which can leave the pace distinctly sluggish at times, especially when there are loads of characters on screen. The animation can be a little inconsistent too: Tree-Rex, for instance, seems to move much more smoothly than Cynder.

Conclusion

Skylanders Giants is, at its core, a child-friendly dungeon crawler with simplistic smash-everything gameplay, but what elevates it is its understanding of its market. There's plenty of variety to keep kids entertained and loads of things to collect, all wrapped in an appealing package – and the toy aspect is still a stroke of genius, an undeniably cool idea that speaks directly to kids and big kids alike. If you or a younger member of your family is a fan of the series, this could be another expensive Christmas.