Here's my version of the ever present magnetic fishing game. I made mine out of fun foam, which technically means you can play with them in the bathtub, or the pool, or a basin of water. They'll float. I wrote the letters with fabric paint, and attached a metal paper clip. For the pole, I actually just used the Dollar Tree fishing poles leftover from the fishing games the kids played at V's party.
The kids fish out a letter, and then we discuss what the letter is called, and what sound it makes.
Several other ideas I had were
*Make each fish a different color, and then go fishing for colors with your toddler.
*Go fishing for shapes.
*Go fishing for numbers.
The kids liked this one, and played with it a good while. L requested that I make another set of letters, so he could spell words with them in the future.