I have divided all my kids toys up into tubs. The boys have three tubs: one has their favourite toys that get played with ALL the time, and the rest of their toys are divided into 2 tubs which I rotate through. They get so excited when I get the other tub out.
DD who is going on 7 her toys are down to one tub as she is really starting to grow out of so many toys and more into crafts/drawings/writing.
I have used under their beds for storage too.
When a toy is broken it's thrown out straight away now. As soon as they start growing out of a toy and as long as it is in good/clean condition I donate it.
I have started being ruthless - sadly it's only the thing to do.