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The global traditional toy market is expected to reach USD86.9 billion in 2018, a 2.8% increase in constant value over 2017. Emerging markets and continued growth of licensed toys are top drivers of traditional toy growth, among others, but numerous factors will be at play to make 2018 the biggest year of traditional toy sales yet.
Source: Euromonitor International
Games and puzzles have grown rapidly in the US, reaching a new high of 15% growth in 2016, primarily due to the growth of hobby board games, such as Codenames or Days of Wonder. This growth signals an increased demand for toys amongst adults in the US, as these games are frequently favoured for parties and other social occasions. This adult toy market is not just restricted to the US; many other developed markets are expected to see higher traditional toy growth for adults than for young children. Millennials in developed markets are largely delaying or choosing not to form a family. With no children, many of these adults have more disposable income to spend on themselves than parents of the same age. As such, traditional toys and games makers have a major opportunity if they can appeal to this group of childless adults in 2018. This would include toys that hold a nostalgic appeal, such as retro toys or toys with older licenses, or toys that can played in a social setting.
Licensing is driving traditional toy sales in 2018, growing by 5% in constant value terms. While sales of licensed Star Wars toys will likely dip compared to 2017 due to the lack of a film release for the primary franchise, there will be numerous other major film releases that will help drive up demand for licensed toys in the year, such as Avengers: Infinity War. In addition, increased media access through a greater proliferation of smartphones amongst children as well as wealth of new areas to draw on for intellectual property, like local licenses and video games, will help continue to grow the influence of licensed toys.
Demand for toys that offer greater interactive play, namely interactive robotic toys, will likely be in higher demand in 2018, especially as the toys-to-life market begins to completely fade with the loss of both Disney Infinity and more recently Lego Dimensions. Interactive toys offer many of the reactive and responsive play elements that toys-to-life products became popular for and can integrate with smartphones and tablets and be used as an educational tool for skill development, in particular coding. As many parents increasingly see coding as an essential skill for their child’s future, interactive robotic toys as well as many other educational products will likely see a greater focus on coding in 2018.
Emerging markets are expected to grow faster than developed markets for toy sales globally, growing by 5% in 2018, and there will be a shift in which key emerging markets lead growth. China will continue to be a leading toy market, but with child population growth slowing toy sales in the country will increasingly be driven by income gains and more premium products. India will see high child population growth, which combined with income gains will help ramp up toy sales. Other markets, however, will not likely return to historic growth, such as Russia, which faces low child population growth prospects or Brazil, which continues to face macroeconomic
This article initially appeared in the February 2018 print issue of The Toy Book.