If that sounds depressing don’t forget that life is full of fantastic amazing things that do really exist and can really be experienced. As such, some of the best toys are not toys at all, they are the means of expressing our own imaginations. Why not get your children to grow a garden, find and classify animals and observe their behavior, paint, compose music, build robots, cook, write, program, etc.
For me intelligence is very much a function of the amount of time spent mentally incubating on an issue with the ability to frequently test your ideas against reality. Think of the hours of mental incubation (spanning over years) that a child loses to dead-end make-believe. This exposure must serve to keep the child in a state of confusion about how the world actually works.