Toys and Games Global Industry Overview

July 2020

The toys and games industry sees positive growth, although with setbacks due to Coronavirus. In traditional toys, long-term opportunities lie in licensing and categories combining play, education and skill-building experience. Broader exposure to digital content at a young age, supported by school curricula and enhanced by COVID-19-driven hometainment, will support focus on digitalisation and connected experience. Hometainment is also set to support further growth of video games and e-sports.

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Understanding key broad COVID-19-driven themes

From sustainability to purpose

The idea of sustainability has evolved beyond an inclusion of ethical credentials and environmental concerns such as plastic pollution and climate change to a more holistic approach that aims to create social, environmental and economic value. These tendencies have further accelerated in the COVID-19 environment.

Hometainment and the new experiential consumer

Consumers re-define and adapt their daily routines as they stay at home longer, further reinforcing many of the pre-COVID-19 trends in hometainment and digital experiences. The expanded cohort of experiential customers creates strategic opportunities across products and services, including further digitalisation of brand communication, education and entertainment.

Innovation and the new “core”

The COVID-19 era has disrupted “business as usual” for companies in consumer goods and consumer services. This has led to a rapidly changing operating and consumer environment, with many households becoming risk averse, thereby redefining operating conditions for craft brands, new product development and the innovation pipeline.

Where and how consumers shop

The arrival of COVID-19 accelerates trends such as the rise of online, click-and-collect, frictionless retail and D2C. In this context, the role of store-based distribution is rapidly evolving as well, laying the ground for ubiquitous, self-serve, frictionless and truly integrated distribution strategies.

Wellness redefined

On the cusp of a tipping point prior to the global pandemic, the wellness movement is set to witness another paradigm shift. Traditional toys and games, video games and the digital media and entertainment industries will need to rethink their strategies. The primary aspects of optimal health and the adoption of a holistic approach that encompasses mental wellbeing and social wellbeing are being reinforced.

Introduction

Scope
Examining top trends shaping the toys and games industry
COVID-19 themes: Cross-industry consumer shifts
COVID-19 impact on the toys and games industry

The Industry Pre-coronavirus

Positive growth globally for the industry in 2019
Toys and games eighth largest among consumer goods industries globally
Video games continues to dominate global toys and games landscape
US and China are main contributors to toys and games absolute growth
Developing regions support growth as technology drives innovation
China sees strong demand for blind collectibles
Education and technology spending go side by side
STEM: Aligning innovation with shifting school and job market demands
Asia Pacific largest video games market, with most significant growth
E-sports industry surges ahead
US is the largest e-sports market, tripling in size over 2017-2019
European E-sports: Strengths in gaming sales and sponsorships
Surge in toys and games e-commerce in 2019 driven by video games
COVID-19 disruption led to increased reliance on e-commerce channels

Leading Companies and Brands

Market still fragmented, and smaller players emerge as competitors
Video games companies dominate the overall industry landscape
Digital entertainment shapes competitive dynamic and innovation
Accelerating shift from “toy makers” to “entertainment providers”
LEGO: Innovation and customer engagement on multiple platforms
Epic Games creating entertainment and socialising opportunities
Ravensburger : Successfully beating at-home boredom during COVID-19

Top Trends Shaping the Industry

Understanding key broad COVID-19-driven themes
Examining the top trends shaping the toys and games industry
Further digitalisation of pastime habits in largest video games markets
Government and education agencies encourage modern STEM education
Licensing strategies evolve and crosses multiple entertainment platforms
Developing markets support growth, with various local trends

Global Outlook

Post-COVID-19 recovery and positive growth through to 2024
Video games reaping the benefits of “ hometainment ” in 2020
Gaming helps friends and family stay connected during home seclusion
Video games will continue to post positive growth over the forecast period
AR/VR technology and gaming: Opportunities in emerging technologies
Traditional toy categories re-energised by hometainment in 2020
Robust omnichannel approach key to success of future retail strategies

Market Snapshots

Global snapshot of traditional toys and games
Global snapshot of video games
Regional snapshot: Asia Pacific
Regional snapshot: North America
Regional snapshot: Latin America
Regional snapshot: Western Europe
Regional snapshot: Middle East and Africa
Regional snapshot: Eastern Europe
Regional snapshot: Australasia
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