Just spoke to Nintendo...absolute useless waste of my time and money on call (10 mins on hold).
they just refer you to Activision who will then tell you your console is faulty.
Round in circles we go!
Back to the shop with Skylanders for a refund....hope everyone else who has problems follows suit. If these two companies get a shedload of returns it might wake them up into checking that their products are compatible and work!