Continue to Explore and Embrace Joy: An Analysis of Trends and Opportunities in the Toy Market

Toys have been an integral part of a child’s life for centuries, offering countless hours of play and fostering imagination. They play a vital role in a child’s development and learning, contributing to cognitive and social skills that significantly impact a child's growth and well-being. With the holiday season approaching, we anticipate a notable increase in toy sales. Today, we will explore emerging trends in toy development and the evolving preferences of parents, aiming to identify new opportunities within this industry.

Global toy market overview

In the continually evolving landscape of play, 2024 has introduced a new era of toys that mirror our changing society, technological advancements, and global influences. The toy market is categorized by product types: games and puzzles, video games, construction toys, dolls and accessories, outdoor and sports toys, among others. The games market is experiencing growth, driven by increased disposable income and the active participation of millennials and Generation Z.

Global Market Size

The global toys market is projected to reach a valuation of USD 295.2 billion by 2029, increasing from USD 206.6 billion in 2024. According to Mordor Intelligence, the toys and games sector is anticipated to register a compound annual growth rate (CAGR) of 9.91% during the forecast period.

Beyond the annual figures, it is essential to acknowledge the resilience of the toy industry. This sector has consistently demonstrated its ability to adapt and thrive, even when faced with various challenges.

The toys market remains highly competitive and is primarily dominated by several key players, including Mattel Inc., Hasbro Inc., LEGO Group, and Spin Master Ltd, among others. These key players are predominantly located in Europe, North America, China, and Japan. Their products and brands account for over half (53%) of the global toy market, as illustrated in the accompanying graphic.

Toy & Games Industry Revenue

The global market is projected to generate a revenue of approximately US$129.5 billion in 2024. In terms of per capita income, it is anticipated that each individual will contribute about US$16.71 in revenue in 2024. When comparing global figures, the United States is poised to lead in revenue generation, with an estimated revenue of US$40.11 billion in 2024. Despite the challenges posed by the global pandemic, the toy industry in the United States continues to flourish, particularly with a notable increase in demand for educational and interactive toys. In terms of revenue from various product types, the most profitable categories include toys for toddlers and kids, plastic toys, and construction sets and models.

Regional Comparison

Regionally, North America and Europe are experiencing consistent growth, fueled by government initiatives and heightened consumer awareness. The Asia-Pacific region, particularly China, is at the forefront of the global toy market, driven by strong domestic demand, favorable policies, and a solid manufacturing base. These areas represent the three largest markets for toys and games as well.

Retail Sales Overview

Middle-range toys and games represented the highest sales in numerous countries. Outdoor and sports toys made a significant contribution to the analyzed market, followed by dolls. In terms of product segments, activity toys dominate with a share exceeding 43%. Regarding applications, the primary demographic served is children aged 6-8 years, accounting for over 40% of sales.

Additionally, with the rise of e-commerce and online retail channels, the availability of toys and games has broadened, enabling consumers to explore a wide variety of products and make purchases conveniently from home. Given these trends, the Toys and Games market is expected to experience continued growth in the coming years. Over the past six years, online toy industry revenue has displayed an upward trend, with a 2%-3% increase from 2018 to 2023. This growth trajectory is projected to persist over the next five years, potentially reaching 36.4% by 2027.

The real toy shoppers and their preference

Consumer preferences evolved throughout 2023 across various product categories, with three out of the eleven supercategories monitored by Circana experiencing growth. Building Sets led the way with the most significant dollar increase, followed by Plush and Vehicles. While Outdoor & Sports Toys remained the largest super category, it also encountered the most notable dollar decline. Although the primary users of young toys are children, the actual consumers responsible for the expenditure are adult parents. Parents of children under 12 years old predominantly belong to the Millennial and Gen X demographics, making their purchasing habits a key consideration.

Sale Trends in Key Toy Categories

In 2023, Drivers of Change Building sets experienced the most substantial dollar gain of $220 million and the highest growth rate at 8%, with LEGO Icons, LEGO Disney Classic, and LEGO Speed Champions leading the category's expansion.

Plush toys ranked second in dollar gains, achieving an increase of $31 million, or 1%. Key contributors to this growth included Pokémon, Furby, Harry Potter, ZURU’s Snackles, Sesame Street, and Moose Toys’ Cookeez Makery.

The Vehicles category saw a sales increase of $6 million, or 0.3%, primarily attributed to Hot Wheels, The Fast and The Furious, and Ninja Turtles.

Youth Electronics experienced an 11% decline, mainly influenced by decreases in Osmo and Kidi. However, Spin Master’s Bitzee and WowWee’s relaunched Fingerlings demonstrated significant gains.

Games & Puzzles faced a 2% decline, primarily driven by reduced sales in Connect 4, Pokémon, and Warhammer within this super category. Arts & Crafts also declined by 8%, with declines observed in Crayola, Kinetic, and Cra-Z-Art.

The Action Figures & Accessories category experienced a decline of 13%, largely attributed to decreases in Funko Pop!, Mattel’s Jurassic Park/World, and Marvel Universe offerings. Infant, Toddler, & Preschool toys declined by 9%, with significant reductions from Fisher-Price, CoComelon, and Little Tikes, while Tonie Box, PAW Patrol, and Bluey reported the largest gains.

Explorative & Other toys saw a 12% decline, led by ZURU’s 5 Surprise, NBA, and NFL. Conversely, MGA’s Miniverse and Bonkers Toys’ LankyBox achieved notable growth within the category.

Dolls recorded a decline of $554 million, down 16%, with the most substantial losses stemming from L.O.L. Surprise!, Disney Encanto, and Rainbow High. In contrast, Monster High, Disney Princess, and DreamWorks Trolls experienced the most significant dollar growth.

The Outdoor & Sports toys segment witnessed the largest dollar losses, decreasing by $879 million or 16%, primarily due to declines in Little Tikes, NERF, Jetson, Razor, and Bunch O Balloons.

Movies, TV series, and Animation IP Derivatives

Consumer interest in movies and cartoons significantly drives the sales of action figures and accessories. The release of new films or animated series further enhances these sales, contributing to the segment's status as the fastest-growing.

Data analytics specialists at The NPD Group have identified a correlation between Netflix’s “Barbie Dreamhouse Adventures” and the sales of the Barbie Dreamhouse. Following the premiere of the new season on Netflix, viewer hours for Barbie titles nearly doubled from February to June 2020, resulting in a substantial increase in sales of the Barbie Dreamhouse.

In 2023, the top-performing toy properties, including Pokémon, Barbie, Squishmallows, Star Wars, Marvel, Hot Wheels, Fisher-Price, LEGO Star Wars, Disney Princess, and Melissa & Doug, all correspond with popular movies and animated series featuring related figures.

Teaching toys

Looking ahead, several trends are anticipated to influence the growth of the Toys & Games market. The increasing popularity of educational toys that promote STEAM (Science, Technology, Engineering, Arts, and Mathematics) learning is expected to drive demand, as parents and educators increasingly seek toys that effectively combine enjoyment with educational value. Engaging toys with educational benefits are highly sought after by parents. Statistics indicate that this trend is likely to persist beyond the coronavirus pandemic. The educational toy market was projected to grow by more than $24 billion by the end of this year. Thames & Kosmos, a creator of science toys since 2001, experienced a significant surge in demand for their products during 2020, with sales up 80% over 2019 as of December 2020.

Rise of Adult Toy Consumers

The adult toy market has gained significant attention since the pandemic and continues to represent a promising area of opportunity. Individuals aged 18 and older generated over $1.5 billion in sales in the first quarter alone, surpassing the 3- to 5-year-old segment to become the most critical age group for the toy industry. Notably, 43% of adults reported purchasing a toy for themselves in the past year, with the primary motivations being socialization, enjoyment, and collecting.

Play with kids, parents and kidults—Strategies for toy brands

Additionally, niche toy manufacturers are emerging to cater to specific interests and segments of the market, enhancing diversity within the industry landscape. Eco-friendly and sustainable toys are gaining traction as consumers become increasingly environmentally conscious, resulting in a heightened emphasis on responsibly sourced materials and manufacturing processes. Licensing agreements with popular franchises and characters from movies, television shows, and books will remain a pivotal strategy for toy manufacturers to capitalize on brand recognition and drive sales.

Innovation and echo in parents’ childhood

New product development is the preferred strategy in the toys and games market. Major players are launching their products and games on both online platforms and in the retail market. E-commerce websites, including eBay, Amazon, and Walmart, offer a variety of construction toys, puzzle games, dolls, and other gaming options. Companies are also creating video advertisements for their products and distributing them on social media platforms. Nowadays, children are increasingly active on social media, engaging with and playing games online. These factors are expected to contribute to the growth of the market over the forecast period.

Global toy industry experts predict that sales of classic toys may offset some of the losses experienced as children turn to video games at younger ages. For instance, a recent report by The Washington Post noted that sales of the Tonka Mighty Dump Truck increased by more than 250% year-over-year as of late October.

Grab kidults market driven by content, especially movies

On the positive side of the declining birth rate, there exists a significant opportunity to engage with the growing number of adults who have the potential to purchase or gift toys. This demographic can help bridge the gap left by decreasing numbers of children. We can expect that Kidults will increasingly turn to well-established licenses. Furthermore, Kidult products are not limited to hipster merchandise collectors and model makers; there are numerous other segments to explore.

A passionate global fandom is bringing anime to the forefront in 2024, and its influence on the toy industry is projected to reach new heights. This rising enthusiasm, along with the enhanced accessibility of anime via streaming platforms (such as Crunchyroll, Netflix, and Max), has transitioned the genre from a niche market into a mainstream phenomenon. This cultural shift is not only affecting entertainment and adult audiences but also extending into various consumer product categories, including children's toys.

Sustainability

According to a survey conducted by the Toy Association, 45% of parents under the age of 40 consider the environmental impact of toys when making purchasing decisions. As we move into 2024, toymakers should prioritize sustainability, viewing it not only as a commitment to utilizing eco-friendly materials but also as a comprehensive approach that reflects the changing values of consumers. A Deloitte report on sustainable consumer behavior from 2023 indicates that durability is the most important factor for consumers when it comes to sustainability and product purchases, with 58% of respondents highlighting this aspect.

This trend goes beyond environmental considerations; it emphasizes the importance of toys and brands that offer longevity. Focusing on craftsmanship, heirloom qualities, extended play value, and the ability of a toy to evolve alongside children as they grow will be essential in meeting consumer expectations.

Toy subscription. Studies show Americans spend $6,500 on toys over a child’s lifetime. Toy subscription services are taking advantage of this fact. And offering an alternate business model that's already eating into traditional toy companies' market share. The basic premise is that parents rent toys instead of buying them. This approach appeals to parents who are environmentally-conscious and want to cut down on the waste that discarded toys create.?? This model has proven popular in the US, UK, and China in recent years. ?And sales numbers continue to trend upward.

Blind boxes

Toy companies are now designing highly elaborate packaging to enhance the unboxing experience for children. The blind box selling strategy exemplifies a probabilistic sales approach, where retailers offer products without disclosing specific information, presenting them as additional purchase options. This strategy assists retail brands in achieving various objectives, including driving customer conversions, increasing repurchase rates, and clearing inventory.

If you are interested in expanding your presence in the toy market this upcoming holiday season, please do not hesitate to reach out. Let’s play together!

Reference

The Toy Association reveals 2024 toy trends, Toyworld

Toy Market Analysis 2024: Industry Revenue, Future Demand, and Regional Growth Prospects to 2032, IndustryResearch

State of the Industry: Resetting Expectations — The U.S. Toy Market Sets Its Sights on More Correction in 2024, by JULI LENNETT, Vice President, Industry Advisor, U.S. Toys, Circana (formerly The NPD Group)

Global Toy Market Size, Share, Trends, COVID-19 Impact & Growth Forecast Report – Segmented By Type (Action Figures, Building Sets, Dolls, Games and Puzzles, Sports and Outdoor Toys, Plush and Others), Age Group (Up to 5 Years, 5 to 10 Years, Above 10 Years), Sales Channel (Supermarkets and Hypermarkets, Specialty Stores, Department Stores, Online Stores, and Others) and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) - Industry Analysis (2024 to 2029), Market Data Forecast

Top Toy Trends 2024: From Eco-Warriors to Anime Dreams (a Playful Revolution!)

7 Top Toy Industry Trends (2024 & 2025)