The Impact of Coronavirus on Toys and Games

May 2020

The impact of Coronavirus (COVID-19) on toys and games has reinforced many trends already shaping the industry pre-COVID-19, mainly in digital transformation. 2020 demonstrates further shift towards hometainment and online education, with surge in video games, including e-sports, and digital education tools, especially STEM. While some traditional toy categories spiked in Q1 2020, there is a long-term trend towards the repositioning of players as entertainment providers on multiple platforms.

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Key Findings

Slowdown for traditional toys in 2020, but opportunities exist in select categories that support at-home education and entertainment

Faced with challenges to supply chains, store closures, and shifts in consumer demand due to depressed incomes and a shift to digital entertainment, traditional toys are expected to see an overall slower performance globally. However, a number of categories that fit in well with the needs of at-home children and adult entertainment and education have seen a surge in early 2020, such as games and puzzles and construction, amongst others.

Video games and e-sports continue to surge as at-home entertainment takes hold in COVID-19 conditions

While the trend towards the digitalisation of playtime and pastime was already taking strong roots pre-COVID-19, a further shift online during COVID-19 stay-at-home mandates has given a further boost to video games, while the shutdown of competitive tournaments and sports has sent more gamers towards virtual e-sport events.

Further enhancement of digital tools to impact mid- and long-term demand and innovation

With more consumer engagement through digital tools – for both entertainment and education – the industry challenge for traditional toy makers is to ensure their presence across platforms. In the world of video games, hardware and software developers will see more competitive pressures as consumers are increasingly spoiled for choice.

From toy companies to entertainment companies – re-imagining corporate strategies for mid- to long-term growth in post-COVID-19 recovery

As toy makers in traditional space increasingly reposition themselves as entertainment providers rather than toy makers, mid- to long-term opportunities and challenges include the need to build expertise and operate across multiple platforms. Investment in technology and video games as well as more mergers and acquisitions activities are expected to be strongly on the traditional toy industry agenda.

Scope
COVID-19 and beyond: Key findings
Traditional toys and games and COVID-19
Seasonality and store closures (1)
Seasonality and store closures (2)
Seasonality and store closures (3)
Video games and COVID-19
E-sports and COVID-19
Industry workbook in 2020 and beyond
Global economy will contract sharply in 2020
The COVID-19 pandemic impacts both supply and demand
In our baseline view, the pandemic peaks in June 2020
Three scenarios examine the impact of a more severe outbreak
Our view in short
Forecast real GDP growth in 2020 under different scenarios
Fiscal stimulus a challenge with restrictions on expenditure
How are governments trying to mitigate the downturn?
What could alleviate the economic effects of the pandemic?
What could exacerbate the economic impact of the pandemic?
Toys and games vs other industries in 2020
Traditional toys and games: Mixed performance in 2020
Supply chain challenge: A short-term opportunity for domestic toy makers
Independent toy retailers must strengthen e-commerce
Post-COVID-19 recovery and positive growth through to 2024
Video games reaping the benefits of “hometainment”
Further digitalisation of pastime habits in largest video game markets
Gaming helps friends and family stay connected during COVID-19
The Americas: Shift in demand, currency fluctuations impact 2020
Asia Pacific: Recovery in China, weakness in Japan in 2020
Europe: Surge in video games, although demand in 2020 varies by market
Accelerating shift from “toy makers” to “entertainment providers”
Ravensburger AG: Beating at-home boredom during COVID-19
Take Two Interactive: Combining hometainment with COVID-19 support
Key insights: COVID-19 scenarios
Outlook for toys and games in 2020 and beyond
About Euromonitor International’s Macro Model

Toys and Games

This is the aggregation of traditional toys and games and video games.

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