@rpiterman - not well versed on the specifics of game design; however, my hunch is that those skills are transferable to several fields, including animation. BTW, same goes for an illustration major, as long as you have enough technical proficiency to pick up whatever proprietary design program the studio is using.
Toy design is a subset of product design/ID so if your student feels they can branch out a bit due to the skill set (which will include design, material selection, and possibly market analysis skills) then it should be ok. One thing to check on would be how many toy design majors at Otis go on to graduate with this specialty (vs. transferring to another major or school) and then how many of those tend to start in the industry. Another would be to find out from Otis how transferable those skills are to another field in the event of a downturn (toys tend to be discretionary expenditures).