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The dynamics and growth trajectory of the Smart Toys market are shaped by a multitude of key factors. Quick technological development is one of the main forces. Smart toys develop in complexity, interactivity, and consumer appeal in tandem with developments in AI, the IoT, and augmented reality. Smart toys' usefulness is improved and the market is expanded as a whole by these technical improvements.
In the Smart Toys industry, consumer tastes and habits are king. Parents are on the lookout for toys that cater to their children's tech-savvy surroundings, as digital engagement and screen-based activities continue to grow in popularity. To meet this desire, manufacturers are creating smart toys that combine pleasure with learning through interactive elements.
Social and cultural movements are important, too, for the market. Smart toys which facilitate children to evolve skills in STEM subjects are getting increasingly popular as the value of STEM education grows. Parents are also focused on toys that can both keep the children occupied and instill new knowledge, which is possible in the current structures and living styles such as two-income families.
Smart toys' distribution channels are vice versa important market features indicating how easy or difficult it is for customers to obtain them. Upon e-commerce birth a number of alternative products and convenient opportunities that made buying toys a easy task showed up. For all that, physical stores are still the most influential when it comes to experiential shopping, where toys are profiled and children touch them before they buy. The attraction of markets and customers based on their distribution channels is affected by the balance of online and offline distribution.
One of the most important trends in the Smart Toys industry is the growing concern for the environment. Sustainable and eco-friendly items are becoming more popular as people become more conscious of environmental challenges. Companies are taking action by making smart toys with recyclable materials and using eco-friendly production methods. Businesses that put an emphasis on sustainability not only help preserve the environment, but they also attract customers who are concerned about doing their part to protect it.
The Smart Toys industry is also affected by rules and regulations put in place by the government. Particularly influencing the creation and promotion of smart toys are regulatory frameworks pertaining to data privacy and the safety of children. Following these rules is essential to gaining customers' confidence and is also required by law. Businesses who take the initiative to handle these regulatory factors will have a leg up in the competition.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Size Value In 2022 | USD 21.55 Billion |
| Growth Rate | 24.71% (2022-2030) |
Smart Toys Market Highlights:
Smart Toys Market Overview
Smart Toys Market Size was valued at USD 10.84 Billion in 2021. The Smart Toys industry is projected to grow from USD 21.55 Billion in 2022 to USD 107.61 Billion by 2030, exhibiting a compound annual growth rate (CAGR) of 24.71% during the forecast period (2024-2030). Smart toys embedded with artificial intelligence (AI) technology produce interactive playing experiences in children from different age groups. Devices including smart speakers to robotic companions are capable of identifying, speaking, and interacting with children; smart toys provide several probable advantages such as assisting children through different learning activities, playing, developing creative ideas, and problem-solving skills.
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Smart Toys Market Trends
Rising expanding power among individuals
The increase in disposable incomes among individuals ly especially in consumers in developing economies such as India, Canada, Mexico, Middle East countries, and others are driving the adoption of advanced technologies such as smart home devices and technologies like IoT, AI, etc. For instance, according to the Internet Society, the peak traffic increased to 47% from 28% forecasted earlier owing to the increased demand from a large workforce operating from their homes, online learning for children, rise in demand for entertainment & media, among others.
Rapid innovations in technology
Technological advancement is a continuous process giving birth to newer emerging technologies that enable us to carry out our day-to-day activities with ease. In terms of the smart toys industry, it is reporting several innovations providing children develop and explore their creative minds. For instance, Innokind, Inc. (US) was the winner in the inaugural smart toy awards organized by World Economic Forum for Intelino Smart Train that promotes creative play as well as enables children to develop coding skills through programmable tiles and/or an application. Additionally, The LEGO Group (Denmark) was another winner, awarded for an augmented reality (AR) tool that helps kids make their music in addition to the music videos through LEGO characters and ‘BeatBits’ with different sound effects. Further, the adoption of technology in the education industry is rapidly surging with time are expected to keep up the demand for smart toys in near future.
Smart Toys Market Segment Insights
Smart Toys Type Insights
The market segmentation, based on Type, includes Robots, Interactive Games, and Educational Robots. The Interactive Games segment held the majority share in 2021, contributing to around ~30% of the Smart Toys market revenue. due to the expansion of edutainment services and the widespread use of smartphones. Playing interactive games is a great method to discover new ways to study and explore creative knowledge. Players are tasked with solving riddles in a virtual environment using interactive games. These activities may be used to help young children comprehend letters and the alphabet in preschool.
Smart Toys Technology Insights
Based on Technology, the market segmentation includes Wi-Fi, Bluetooth, RFID, or NFC. The Wi-Fi segment dominated the market in 2021. By leveraging the power of the wireless Internet, these toys can connect to external services and devices to provide an enhanced user experience. From educational apps to virtual reality games, this segment is enabling a wide range of possibilities for users both young and old. With its increasing popularity, it's no wonder that the Wi-Fi segment has come out on top in this market.
Smart Toys Distribution Channel Insights
Based on Distribution Channel, the market segmentation includes Online/Ecommerce Stores, Specialty Stores, and Toy Shops. The Online/E-commerce Stores segment dominated the market in 2021 with market growth. The pandemic had an impact on the sales of educational toys, and numerous toy manufacturers were forced to practically relocate their operations. Due to the accessibility of toys online, major businesses may broaden their business by using TV and social media to reach a wider audience and advertise their products.
Smart Toys End-user Insights
Based on End-user, the market segmentation includes Toddlers, Preschoolers, School-going, and Stripling. The Stripling segment dominated the market in 2021 the market growth. This demographic has taken the lead in driving demand for Smart Toys, pushing the market to unprecedented heights. From educational and robotic toys to remote-controlled vehicles, Smart Toys have become ubiquitous among this age group.
Figure 2: Smart Toys Market, by End-user, 2021 & 2030 (USD Million)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Smart Toys Regional Insights
By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. North America is expected to register the largest market share owing to the surging demand for smart toys in the region. The US is expected to lead the country-level market in the North American region owing to the benefits offered by smart toys in STEM (Science, Technology, Engineering, and Math) and the emerging need for programming and embedding technologies including AI.
Further, the major countries studied in the market report are The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
Figure 3: SMART TOYS MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Moreover, the Europe region is expected to stay in the second position following North America during the review period due to the higher adoption of smart toys. On the other hand, the smart toys manufacturers operating in the region are now required to comply with the newly proposed regulation on artificial intelligence on April 21st under the name- AI Act aka the AIA which sets a scene for a radical overhaul of the regulation of the digital world to put on children’s rights and design a digital world people can trust.
Asia-Pacific is anticipated to be the fastest-growing market in the smart toys market during the forecast period mainly due to the rapid digital transformation, increasing internet penetration, rising adoption of 5G & 4G LTE services, and others. Additionally, the region is also one of the largest consumers of telecommunication and consumer devices that include smartphones, tablets, laptops, and others which enhance the expectations for the emerging smart toys industry. Also, the deployment of 5G services, increasing awareness and demand for STEM-oriented learning & entertainment systems is expected to boost the demand for smart toys soon.
Smart Toys Key Market Players & Competitive Insights
Major market players are spending a lot of money on R&D to increase their product lines, which will help the market grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Smart Toys industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.
Manufacturing locally to cut operating costs is one of the main business tactics manufacturers use in the Smart Toys industry to benefit customers and expand the market sector. Major market players, including Mattel, The LEGO Group, Smartivity Labs, Smart Kids Toys, and others, are attempting to increase market demand by funding R&D initiatives.
Mattel is a toy and consumer product design and manufacturing firm that focuses on children's entertainment. Fisher-Price, Barbie, Monster High, Ever After High, Polly Pocket, Enchantimals, Hot Wheels, Matchbox, Masters of the Universe, American Girl, and Thomas & Friends are among the items and brands it manufactures. In addition, the firm offers film and television material, gaming, music, and live events.
LEGO is a firm that creates, manufactures, promotes, and sells toys. It is dedicated to the growth of children's creativity via play and learning. It sells toys in the areas of automobiles, airplanes, trains, trucks, boats, construction, building, home, space, and robots.
Key Companies in the market include
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Mattel
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The LEGO Group
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Smartivity Labs
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Smart Kids Toys
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LeapFrog Enterprises Inc
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SEGA
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Funvention Learning Pvt. Ltd.
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Twin Science
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ROYBI Robot
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Fat Brain Toys
Smart Toys Industry Developments
In February 2024, Sega Toys unveiled an AI enabled KIMIT Ragdoll that is a cat-like robot. It was a product of cooperation between Sega Toys and Elephant Robotics which manufacture industrial robots. In response to sound it makes such movements like wagging its tail and looking up like the real thing.
In September 2023, Mattel, Inc. released Pictionary Vs. AI edition which is an innovative version of the classic quickdraw game called Pictionary. This is the first ever board game where the traditional gameplay has been smoothly blended with AI technology. The players draw while the AI guesses.
Pixsee introduced a range of smart stuffed toys for babies in 2023 using cutting-edge artificial intelligence technology. These are soft, cuddly dolls designed to interactively engage newborns, so they can be educated on how it feels when responded to. With things like voice recognition or interactive play, Pixsee’s intelligent stuffed toys become perfect friends for both toddlers and babies.
Hasbro launched the Furby interactive toy in June 2023, equipped with five voice-activated modes and over six hundred responses, including lights, sounds and ten different songs that all respond to touch just as if they were human beings. Furby also reacts to actions like hugs or pats from its young owners.
Mego famous name in toys introduced My2XL|AI Robot for Kids – otherwise known as Cobot–an innovative family robot. It is the first of its kind to have sophisticated AI technology which makes it a smart and responsive playmate for children as well. The 2XL Cobot is meant to encourage creative thinking, problem-solving skills and learning through interaction.
In April 2022, Mattel set aside $50 million worth of investment in Nuevo Leon, Mexico, where it has a factory. This plant covers an area of 200000 square meters and aims at creating over 3500 job opportunities. Mattel’s objective with this investment was to meet the growing demand for toys and improve its production capabilities.
Smart Toys Market Segmentation
Smart Toys Type Outlook
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Robots
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Interactive Games
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Educational Robots
Smart Toys Technology Outlook
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Wi-Fi
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Bluetooth
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RFID or NFC
Smart Toys Distribution Channel Outlook
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Online/E-commerce Stores
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Specialty Stores
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Toy Shops
Smart Toys End-user Outlook
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Toddlers
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Pre-schoolers
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School-going
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Stripling
Smart Toys Regional Outlook
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North America
- US
- Canada
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Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
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Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
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Rest of the World
- Middle East
- Africa
- Latin America
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