I have 8 year old twins (boy and girl) and since they got Skylanders for Christmas last year they are OBSESSED!! They LOVE the game and all the characters. They wanted the entire collection! We have it for the xBox but it is available on most game platforms. There was a BIG problem last year with the company being able to keep the supply up with the demand. Seems better this year with the Skylanders Giants release.
Last year I had some of those Toys 'R Us gift cards promos they gave with certain purchases and they expired before Christmas, so I used them to buy the Skylanders game for free. That "free" game cost me hundreds$$ in buying characters, etc. There are 30 characters for the first game and they are $8-10 a piece.
The new game has more characters costing $10-15 a piece.
I'm sure your 7 year old will love it. The characters are grouped in elements (air, fire, undead, water, earth, tech, magic, and life). You mostly need at least one from each group. The character is placed on the portal and appears in the game. The character's wins are stored on an RFID chip. The characters can be used on any game system. Just be warned it can get $$$$. Game is a lot of fun, though.