Concept 3: Magnetic Circuits
This toy is similar to the snap circuit toys and magnetic building rods. These magnetic building rods have a conductive element that allows them to be used to build more interactive objects, with modules that connect to the magnetic ball joints that can be powered by a power source by way of the conducting rods.
A child would interact with this toy by building interactive, wired buildings with lights, or fans, or other simple powered objects.
The materials would likely be hard plastic and metal, much like the existing products, but it would be necesarry to devise a safe power source and safe power transmission through the rods and ball joints.