Interactive Toys: What Drives Growth?

China, the US, the UK and Germany reveal the key factors that lead to growth in interactive toys

Interactive toys is expected to be a major area of growth for traditional toys and games, with China, the UK, Germany and the US leading global sales. While there are numerous similarities in these markets, it is their growing upper-income group, high parental interest in STEM, and an increase in small tech-savvy households that is driving the adoption of interactive toys.

A large and growing upper-income group is a necessary base for the growth of high-priced interactive toys

Interactive toys, due to the numerous sensors and internal AI-driven computers that need to go into them to give them interactive functionality, are inherently priced very high compared with other toys. Markets need both a robust and increasing base of high-income households to make interactive toys viable.

Parental interest in STEM a driving force behind the adoption of interactive toys

Interest in STEM, in particular the technological portion of STEM, is key in the growth of interactive toys. Numerous new interactive toys allow for some amount of coding, which is critical for core interactive toy markets, where parents believe coding is one of the best paths to a successful career for their children.

Small technology-oriented households lead the demand for interactive toys

Within the core interactive toys markets the number of children per household is typically small or in decline, while the adoption of new technology is high. This means there are increasing numbers of single-child households with tech-savvy children in need of a playmate, making interactive toys more attractive.

New countries have the potential to be prime markets for interactive toys through to 2030

The factors of high incomes, STEM interest and shrinking households, which will grow sales of interactive toys in the US, the UK, Germany and China, hold implications for other markets in the future. Markets such as India and Mexico could become prime targets for interactive toys through to 2030.