Toys and Games: Quarterly Statement Q1 2021

April 2021

Q1 2021 forecast update broadly aligns with the forecast review conducted in November of 2020, as pace of recovery also follows macro-economic trends in some of the key developing regions. While China is expected to see healthy rebound in 2021, markets like Brazil remain on a shaky ground. As industry players eyeing post-pandemic world of play and entertainment, strategies for growth include acquisitions, focus on key iconic brands, and audience outreach across ages and multiple platforms.

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Key findings

Trajectory of growth in 2021 shaped by pace of economic recovery

On the whole, growth trajectory for toys and games in 2021 and through the next five years reported with the latest Q1 forecast update aligns with expectations for growth reported by Euromonitor in the Q4 forecast scenario. While China demonstrated a significant drop in sales in 2020, the country’s recovery of economic activity and consumer confidence in the second half of 2020 positions its well for a strong rebound. At the same time, slow recovery in markets such as Brazil leaves toys and games industry recovery on shaky ground in the mid term.

Industry players focus on key strengths and iconic brands appeal to audiences across age groups

As 2021 begins, traditional toys and games industry players focus on their key product portfolios through acquisitions and divestments, with leaders such as Mattel highlighting key brands such as Barbie as well as building innovation and brand outreach through a variety of platforms to appeal to audiences across ages.

At-home entertainment remains on the agenda in 2021, while long-term changes to entertainment consumption shape innovation and communication

Although return to in-person entertainment is in sight in 2021, early 2021 is still likely to focus on at-home activities and at-home family entertainment, thus still emphasising the need for consumer interaction that shaped strategies in 2020. At the same time, 2020 enhanced shifts towards consumer engagement on multiple platforms that were already forming pre-pandemic, and key industry players are launching a variety of initiatives that marry their well-known strong brands with entertainment for the new audiences, including TV and streaming services.

Video games have potential to tap into broader wellness strategies in the post-pandemic world

Video games continue to push forward, also supported by ongoing innovation in new consoles and games. However, as the pandemic brought to the fore broader capabilities of video game platforms, they also revitalised the conversation of video games’ role in helping to address mental health, with new games launching with specific therapeutic properties in sight.

 

Introduction

Scope
Key findings

Q1 Toys and games Update

Q1 update mainly aligns with earlier expectations for 2021 and long term
Pessimistic vs optimistic outlook: Threats to trajectory of the recovery
Recovery tracker: Protracted slump in Brazil vs recovery in China
Income elasticities among factors to shape path to recovery
Mattel focuses on core strengths and new content to drive growth
Hasbro leans strongly on licensing
LEGO recieves rewards and sees success across age groups
Family fun nights still on the agenda in 2021
Video games eco-system continues to push industry to new heights
Video games consoles growth supported by new releases
Video games and broader wellness strategies during and post-pandemic
Long-term discussion of key drivers

Q1 Macroeconomic Update

Global baseline outlook: Downside risks to the recovery have declined
Uncertainty remains high, but with a more optimistic tilt
Real GDP annual growth forecasts and revisions from last quarter, AE (%, percentage points)
Real GDP annual growth forecasts and revisions from last quarter, EMDE (%, percentage points)
COVID-19 scenarios summary

About our Industry Forecast Model

Euromonitor International and COVID-19: Forecasts and analysis
About Euromonitor International’s Industry Forecast Model
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