Toys and Games in Western Europe

August 2023

After the spike in demand seen during the pandemic, particularly 2020, sales of toys and games recorded a marked decline in Western Europe in 2022. Most country markets were impacted by high inflation and the consequent pressure on local consumers’ purchasing power. In addition, there were some supply chain problems in 2022, particularly with Sony’s PlayStation lines, which negatively affected sales of these products. However, a return to positive growth is expected for toys and games from 2023.

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Key findings

Will Squishmallows continue to thrive?

Squishmallows have been enjoying a veritable boom in the UK market, taking the plush category by storm, and securing top spot within the space of a couple of years. Also holding this position in the Netherlands, owner Jazwares will now be looking to extend this to other major markets in Western Europe in the coming years.

“Kidults” will remain an important consumer segment for future value growth

As across much of the region, the growing “kidults” consumer group is the most significant demographic in terms of disposable income in the UK. Companies therefore continue to expand their portfolios to satisfy the demands of this specific consumer segment – eg LEGO continuing to grow its “Adults Welcome” product line or the “Mattel Creations” platform that is focused on “kidult” fans and collectors.

E-commerce share expected to continue growing

Retail e-commerce received further impetus through home seclusion and non-essential retail store closures during the pandemic, now accounting for more than half of toys and games sales in all the main country markets. However, traditional toys and games stores still remains an important channel for traditional toys and games, with seeing and even testing potential purchases still valued by consumers for many products in this category.

Strong growth expected for online games and subscriptions in 2022-2027

Online games and subscriptions are expected to see dynamic growth in the coming years. They offer a cost-effective gaming model as users get access to a wide range of titles for a yearly or monthly fee. Microsoft's Game Pass is helping drive the category's growth, boosted by the company’s ongoing product bundling strategy, in which it offers a limited-time free Game Pass subscription with the purchase of its static consoles and physical or digital video games.

Scope
Key findings
Gap between the main categories not as great as in other toys and games regional markets
Western Europe recorded only sluggish growth over 2017-2022 as a whole
Positive growth expected after the declining sales seen in 2022
Video games outselling traditional toys and games in most markets
Plush bucks the declining traditional toys and games trend in the UK in 2022
Video games responsible for all the new sales added in toys and games in 2017-2022
Supply chain problems hit sales of video games hardware
Sustainability becoming an increasingly important consideration in toys and games
E-commerce the dominant channel for sales of toys and games
The online channel accounts for more than three quarters of video games sales
Specialist outlets remain an important channel in traditional toys and games
Increasing concentration in the UK over the historic period
Supply chain issues hit Sony’s share in 2022
The UK is the main revenue generator for more than half of the top 10 players
Evergreen and ever-inventive Lego brand tops the rankings
Growth incoming over the forecast period, but at relatively modest rates
AR/VR headsets and online games and subscriptions set for dynamic growth
“Kidults” consumer segment will continue gaining in importance over the forecast period
France: Market Context
France: Competitive and Retail Landscape
Germany: Market Context
Germany: Competitive and Retail Landscape
Italy: Market Context
Italy: Competitive and Retail Landscape
Netherlands: Market Context
Netherlands: Competitive and Retail Landscape
Spain: Market Context
Spain: Competitive and Retail Landscape
Sweden: Market Context
Sweden: Competitive and Retail Landscape
Switzerland: Market Context
Switzerland: Competitive and Retail Landscape
Turkey: Market Context
Turkey: Competitive and Retail Landscape
UK: Market Context
UK: Competitive and Retail Landscape

Toys and Games

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

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