Global Smart Toys Market Size & Growth Trends Analysis Report

The popularity of smart toys has grown in the past few years owing to the growing use of connected devices and the Internet of Things (IoT), which may provide kids with engaging, customized, and educational experiences. The demand is also being driven up by parent’s growing awareness of the educational advantages of smart toys which frequently include STEM (Science, Technology, Engineering, and Mathematics) instruction. These smart toys are embedded with sensors and firmware for personalized interaction with the kids. These IoT embedded toys can also collect and use data from the internet making the toy more intelligent and an important asset for the kids. The development of increasingly sophisticated toys that can adjust to a child's behavior is made possible by advances in machine learning and artificial intelligence (AI), which improves learning outcomes and engagement. The market expansion is also fueled by parent’s increasing disposable income and their propensity to spend money on cutting-edge, technologically advanced things for their kids.

There are several obstacles facing the business, mainly data privacy and the security of linked toys that can gather and share children's personal information. The adoption of smart toys may also be restricted by the high development and acquisition costs, particularly in regions where consumers are price-sensitive. Moreover, producers face a hurdle when certain items quickly become obsolete due to the swift speed of technical advancements. Despite these obstacles, the market for smart toys has a lot of room to develop. Smart toys are becoming increasingly integrated with augmented reality (AR) and virtual reality (VR) technology, which presents new opportunities to improve interaction and engagement. Furthermore, the COVID-19 pandemic has hastened the growth of e-learning and remote education, which has increased demand for intelligent educational toys that enhance at-home learning. In emerging markets, where internet access is increasing and digital literacy is growing, there is also room for market expansion in the upcoming years.

The market for smart toys is regulated by several agencies, including the General Data Protection Regulation (GDPR) in the European Union and the Federal Trade Commission (FTC) in the U.S., which are in charge of protecting children's privacy under the Children's Online Privacy Protection Act (COPPA) and GDPR, respectively. Furthermore, groups such as the Toy Association establish safety criteria to guarantee that smart toys adhere to the necessary regulations.

The market for smart toys is seeing notable advancements from many firms & start-ups. Codable robots and teaching resources for STEM education are available from Sphero. Cognitoys creates toys with artificial intelligence that allow kids to interact and learn. PlayShifu offers immersive learning experiences with its AR-based educational gadgets. These upstarts are strategically placing themselves in the quickly expanding market by utilizing cutting-edge technology to develop cutting-edge products that meet changing consumer needs.

Impact of COVID-19

The global market for smart toys has been significantly impacted by the COVID-19 outbreak, both favorably and negatively. Positively, there has been an increase in demand for smart toys that combine entertainment and education because schools were closed and kids were spending more time at home. Toys that encourage STEM learning, creativity, and interactive play have become more popular as parents look for creative ways to include their kids in worthwhile pursuits. The market for intelligent educational toys that facilitate distance learning and cognitive growth was stimulated by the pandemic, which also hastened the use of digital learning tools and technologies.

However, the market for smart toys also faced difficulties as a result of the pandemic. The manufacture and delivery of smart toys were impacted by supply chain interruptions, factory closures, and logistical difficulties, which resulted in shortages and delays in the availability of the product. Additionally, several consumers restricted their purchases of non-essential items, such as expensive smart toys, due to the pandemic's lowered disposable income and economic instability.

Ultimately, COVID-19 positioned the market for future development as normalcy returns, even though it originally caused supply chain disruptions and financial issues. It also raised awareness and demand for cutting-edge, tech-driven toys that promote education and learning at home.

Segmentation

The global smart toys market is segmented into type, age group, and distribution channel. The type segment is further segmented into educational toys, interactive dolls, robots, and others. Companies like Sphero and Lego are well-known in the robots industry, providing programmable robots that engage children in play while teaching them STEM subjects like coding. Mattel and Hasbro are major players in the interactive doll market with products like "Hello Barbie" and "FurReal Friends" that communicate with kids using artificial intelligence. Leading brands in the educational toys market are LeapFrog Enterprises and Osmo, which offer smart toys that improve learning in science, math, and reading. Anki and WowWee have established themselves in the other smart toy markets with their cutting-edge products, which include interactive robots and cars with artificial intelligence.

The market is bifurcated by age group into 0–5, 6–8, 9–12, and Teens. Companies like VTech and Fisher-Price are at the forefront for the 0–5 age group, providing age-appropriate smart toys that emphasize early learning and developmental skills. For children aged 6 to 8, Lego and PlayShifu offer interactive toys that blend learning and enjoyment, such as robotic toys and augmented reality (AR). Companies like Makey Makey and Sphero, which provide more sophisticated educational toys and robotics kits that challenge older children, dominate the 9–12 age group. Companies like Ubtech Robotics and Raspberry Pi Foundation set the standard for coding, robotics, and electronics kits for teenagers. These kits are intended to foster greater educational engagement and prepare students for employment in the tech industry.

Based on the distribution channel, the market is split into online and offline. E-commerce behemoths like Amazon and Walmart rule the internet market, providing a wide selection of smart toys along with the ease of home delivery. Niche smart toys are also the focus of specialty internet retailers like The Learning Journey and Fat Brain Toys. Major retail chains such as Target and Toys "R" Us (in regions where it still exist) are vital to the offline category because they offer in-store experiences and demos that are critical to the sales of smart toys. The Entertainer and Hamleys, among other educational and specialty toy retailers, are major contributors to offline distribution.

Regional Analysis

Due to its high disposable wealth, tech-savvy parents, and emphasis on early childhood education, North America is a market leader for smart toys. Key markets for the widespread adoption of interactive and instructional smart toys are the U.S. and Canada. This region is dominated by businesses like LeapFrog Enterprises, Mattel, and Sphero, which use cutting-edge technology like augmented reality (AR), machine learning, and artificial intelligence (AI) to make unique and captivating goods. Growing the market is made easier by the robust presence of e-commerce behemoths like Amazon and Walmart, which make a large variety of smart toys easily accessible.

Europe is a sizable market, fueled by growing parental interest in STEM (Science, Technology, Engineering, and Mathematics) education and growing awareness of the educational advantages of smart toys. Leading nations in the adoption of smart toys that promote language acquisition and cognitive development include Germany, the UK, and France. The prominent companies in this region, such as Osmo, Clementoni, and VTech, are benefited by government programs that support digital literacy and education. The well-known toy producers and distributors that meet the market's increasing need for creative and secure items are also beneficial.

The Asia-Pacific region is seeing the strongest growth in smart toy sales due to its sizable and quickly growing population, rising disposable incomes, and greater recognition of the value of early childhood education. The major markets are China, Japan, South Korea, and India, where parents who seek interactive and instructional toys are tech-savvy consumers. Businesses like PlayShifu, Xiaomi, and Ubtech Robotics are leveraging this region's growth potential by providing competitively priced, locally customized products. The demand for app-connected smart toys is also increasing due to the region's quick adoption of smartphones and internet access.

Due to increased middle-class earnings, urbanization, and internet access, Latin America is a growing market for smart toys. Growing consumer awareness of the educational potential of these items is the main driver of the market for smart toys in this region. Businesses like Anki and Sphero are becoming more popular by releasing inexpensive, interactive toys that satisfy the demands of a customer base that is price-conscious. However, market expansion is hampered in some places by inadequate infrastructure and unstable economies.

Due to expanding disposable incomes, more digitization, and growing interest in educational toys, the Middle East and Africa are also an emerging industry. Parents in leading nations like South Africa, Saudi Arabia, and the United Arab Emirates are always looking for new and creative ways to get their kids excited about studying. Businesses like WowWee and Ubtech Robotics are growing their influence in this region by providing a selection of smart toys that suit regional tastes. However, low consumer awareness and problems with cost in some areas of the region are limiting factors in the market's growth.

Every region offers different chances and difficulties for businesses in the smart toy industry. Asia-Pacific, Latin America, and the Middle East & Africa offer significant growth potential due to rising disposable incomes, increasing digital connectivity, and a growing focus on education. In contrast, North America and Europe are known for their high consumer spending and advanced technological adoption.

Competitive Analysis

The key players in the global smart toys market are Playmobil, Pillar Learning, Sega Toys Co. Ltd., LeapFrog Enterprises Inc. (Vtech Holdings Ltd.), Mattel Inc., LEGO System A/S, Hasbro, MindWare Inc., and Sphero Inc., among others.

In 2024, The KIMIT Ragdoll, a robot pet that resembles a cat and uses cutting-edge AI technology to simulate real-life cat behaviors, was introduced by Sega Toys in February 2024. KIMIT Ragdoll is an industrial robot that was developed in partnership with Elephant Robotics. It is capable of lifelike actions including waving its tail and opening its eyes in response to sounds. This robot pet is intended to provide emotional support and companionship, especially to people who are unable to keep live pets due to allergies or living in areas where pets are prohibited.

Pictionary Vs. AI is a cutting-edge iteration of Mattel, Inc.'s beloved drawing game Pictionary, which was released in September 2023. With the integration of AI technology, this is the first traditional board game where players draw on a tablet or digital screen and the AI attempts to predict what they have drawn. This updated version makes quick-draw more interesting and appealing to a tech-savvy audience by fusing the timeless fun of the game with contemporary technology. The game adds a new competitive and participatory element to family game night by utilizing AI's ability to read human sketching, which improves traditional gameplay.

Hasbro brought back Furby, the well-known interactive toy, in June 2023, adding new features fit for a contemporary user base. The new Furby has over 600 reactions, including lights, noises, and ten songs, and comes with five voice-activated modes. The toy reacts to different hand movements, such as pats and hugs, and it lets kids feed it electronically, style its distinctive "furhawk," and dress it up with trendy accessories like clip-on beads. By incorporating these new capabilities, Hasbro hopes to develop an engaging, interactive playmate that sparks kids’ imaginations and involvement, introducing the beloved Furby experience to a younger audience while retaining its nostalgic appeal for more mature fans.

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The global smart toys market is segmented as follows:

By Type (Revenue: USD Billion, 2019 – 2031)
●    Educational Toy
●    Interactive Doll
●    Robot
●    Others

By Age Group (Revenue: USD Billion, 2019 – 2031)
●    0-5
●    6-8
●    9-12
●    Teens

By Distribution Channel (Revenue: USD Billion, 2019 – 2031)
●    Online
●    Offline

By Region (Revenue: USD Billion, 2019 – 2031)

● North America
o U.S.
o Canada
o Mexico

● Europe
o U.K.
o France
o Germany
o Italy
o Spain
o Rest of Europe

● Asia Pacific
o China
o Japan
o India
o South Korea
o South East Asia
o Rest of Asia Pacific

● Latin America
o Brazil
o Argentina
o Rest of Latin America

● Middle East & Africa
o GCC Countries
o South Africa
o Rest of Middle East & Africa