Toys and Nintendo games go together. So Activision Blizzard is combining the two into a single integrated product with its Skylanders Spyro’s Adventure game.

The integration of toys and games is a natural one, but it has never been handled well. Activision Blizzard’s game is an attempt to crack a hard problem. If it succeeds, the company may have another major money-generating franchise on its hands.

The Wii video game debuts this fall with a little wired device that is like a battle arena, hooked into your console. You set a toy such as Trigger Happy on top of it, and the character will immediately jump into your Wii game as an on-screen character. You can then play with the character, until you take the character off and replace it with another one.

The game will eventually have connections to PCs, smartphones and any mobile gaming device. First unveiled in February, Activision Blizzard recently showed it to a small group of press. I played the game with one of the cute characters. It worked as advertised, though the game itself was not very inspired. It reminded me of a normal hack-and-slash fighting game.

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But when you have a strong, leveled-up character, you can be more effective in attacks against big enemies. You can also swap characters in and out of your game as needed to handle the obstacle at hand.

The cool thing about the integration is that the toys have a little bit of memory too. So when you achieve certain things with the particular toy, the advancements are written into the memory of the toy. That’s a pretty cool feature. They’re toys with brains.

We’ll be exploring the most disruptive game technologies and business models at our third annual GamesBeat 2011 conference, on July 12-13 at the Palace Hotel in San Francisco. It will focus on the disruptive trends in the mobile games market. GamesBeat is co-located with our MobileBeat 2011 conference this year. To register, click on this link. Sponsors can message us at sponsors@venturebeat.com. To participate in our Who’s Got Game? contest for the best game startup, click on this link.

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