Connected Toys Market Size (2024 – 2030)

Global Connected Toys Market was valued at USD 10.5 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 17% from 2024 to 2030. By 2030, the market is expected to reach USD 32.5 billion.

The Global Connected Toys Market is experiencing rapid growth, driven by advancements in technology and a rising demand for educational and interactive entertainment for children. Connected toys, also known as smart or interactive toys, are equipped with wireless connectivity, allowing them to interact with digital platforms, apps, and the internet. These toys include a wide range of products, from app-connected robots and AI-driven dolls to gaming consoles and virtual reality (VR) gadgets. The market is being fueled by the increasing use of smartphones and tablets among children, as well as the demand for STEM-based (Science, Technology, Engineering, and Mathematics) toys that promote cognitive development.

Key Market Insights

• STEM-based connected toys are becoming increasingly popular as parents and educators seek to promote science, technology, engineering, and math skills among children. These toys offer interactive learning experiences, teaching coding, problem-solving, and critical thinking, thereby gaining favor in both educational institutions and homes.

• Many connected toys are now integrating artificial intelligence (AI) and the Internet of Things (IoT) to offer enhanced interactive experiences. These technologies allow toys to adapt and respond to the child’s behavior, learning patterns, and preferences, making playtime more engaging and personalized.

• The educational benefits of connected toys are driving market expansion, with toys that teach coding, language skills, problem-solving, and creativity in high demand. Schools and educational institutions are beginning to adopt connected toys as learning aids, further driving market growth.

• The surge in online shopping is benefiting the connected toys market, as parents and guardians increasingly purchase toys through e-commerce platforms. Manufacturers are leveraging digital marketing and online distribution channels to reach wider audiences and boost sales.

• With rising concerns about screen time, manufacturers are focusing on developing connected toys that strike a balance between technology and physical play. Interactive toys that encourage physical activity and provide educational value without excessive screen exposure are becoming popular.

• Connected toys that use AR and VR technologies are gaining traction as they provide immersive learning and entertainment experiences. These toys allow children to engage with virtual worlds while enhancing their cognitive and motor skills.

• Manufacturers are focusing on customization, allowing children to personalize their toys with apps and settings that enhance the interactive experience. This trend is particularly popular with older children and teenagers who prefer toys that reflect their individual preferences.

Global Connected Toys Market Drivers

Technological Advancements in Toys and Gaming Industry is driving market growth: The rapid development of technologies such as AI, machine learning, and IoT is revolutionizing the toys and gaming industry. Connected toys are designed with wireless technologies, enabling interaction with smartphones, tablets, and online platforms. AI-powered toys can learn and respond to children's behaviors, while IoT-enabled toys can connect with other smart devices in the home to provide a seamless experience. For instance, some smart toys can be integrated with home assistants like Amazon Alexa, allowing children to interact with the toy through voice commands. These technological advancements have driven demand for connected toys, offering children more immersive and personalized play experiences. Moreover, with the continued growth of the gaming industry and the increasing incorporation of AR and VR technologies, the connected toys market is poised for further expansion.

Increasing Demand for Educational Toys is driving market growth: Connected toys designed for educational purposes, particularly STEM-related toys, have seen a surge in popularity as parents and educators seek to enhance children's learning through interactive play. STEM toys that teach coding, robotics, and engineering skills are being widely adopted in both homes and schools. These toys provide hands-on learning experiences that can develop children's problem-solving skills, creativity, and technical abilities. As the importance of STEM education continues to grow in today’s technology-driven world, the demand for connected toys that offer educational value is expected to remain a key market driver. Additionally, toys that promote language development, numeracy, and emotional intelligence through interactive play are gaining traction as parents prioritize educational outcomes in toy purchases.

Growing Penetration of Smartphones and Tablets Among Children is driving market growth: The increasing ownership and use of smartphones and tablets by children is a major driver of the connected toys market. These devices serve as platforms for connected toys, allowing children to control and interact with their toys through apps. As mobile devices become more prevalent in households worldwide, connected toys that integrate with these devices are becoming more popular. Moreover, the rise of e-learning and digital education platforms during the COVID-19 pandemic has further increased the use of smart devices among children, creating a favorable environment for the growth of connected toys. The availability of various apps that offer educational content, games, and interactive activities has made connected toys more appealing to parents and children alike.

Global Connected Toys Market Challenges and Restraints

Privacy and Data Security Concerns is restricting market growth: One of the major challenges facing the connected toys market is the growing concern over privacy and data security. Many connected toys collect data on children's interactions, preferences, and behaviors, raising concerns about how this data is stored, shared, and used by manufacturers. Parents and regulators are increasingly wary of toys that are connected to the internet, especially when it comes to toys with built-in cameras, microphones, or GPS tracking features. High-profile incidents of data breaches and the unauthorized collection of children's personal information have resulted in increased scrutiny of connected toy manufacturers. As a result, companies in the connected toys market must prioritize data security and comply with stringent regulations to maintain consumer trust.

High Product Costs and Affordability Issues is restricting market growth: Despite the growing popularity of connected toys, the high cost of these products can be a barrier to widespread adoption, particularly in price-sensitive markets. Many connected toys feature advanced technologies such as AI, robotics, and IoT, which significantly increases their production costs. As a result, connected toys are often priced higher than traditional toys, making them less accessible to lower-income households. While the educational value and technological sophistication of connected toys are attractive to many parents, affordability remains a challenge for the market. To overcome this barrier, manufacturers need to focus on reducing production costs and offering more affordable products without compromising on quality or functionality.

Market Opportunities

The Global Connected Toys Market presents numerous opportunities for growth, particularly as manufacturers continue to innovate and introduce new products. As AI, IoT, AR, and VR technologies evolve, connected toys will offer even more immersive and educational experiences, creating opportunities for product differentiation and premiumization. Additionally, the increasing demand for toys that promote physical activity and mental wellness is expected to drive the development of health-focused connected toys. Expansion into emerging markets, where the adoption of smartphones and the internet is on the rise, also presents a significant growth opportunity. Collaborations between toy manufacturers, educational institutions, and technology companies can lead to the development of next-generation connected toys that enhance learning and development for children worldwide.

CONNECTED TOYS MARKET REPORT COVERAGE:

Connected Toys Market Segmentation - By Product Type

• Smart Robots

• App-Enabled Toys

• Interactive Dolls

• Educational Kits

In terms of product type, Smart Robots dominate the connected toys market due to their ability to offer interactive learning experiences and adapt to children's behaviors.

Connected Toys Market Segmentation - By Application

• Home Use

• Educational Institutions

• Entertainment

For application, Home Use remains the most dominant segment as parents increasingly seek connected toys that combine entertainment with education in home settings.

Connected Toys Market Segmentation - Regional Segmentation

• North America

• Europe

• Asia-Pacific

• South America

• Middle East & Africa

North America leads the connected toys market, driven by a high adoption rate of advanced technologies and strong demand for educational and interactive toys. The region's well-developed e-commerce infrastructure and growing emphasis on STEM education further support market growth.

COVID-19 Impact Analysis on the Connected Toys Market

The COVID-19 pandemic has had a mixed impact on the Global Connected Toys Market. On one hand, the closure of schools and the shift to remote learning led to a significant increase in demand for educational toys and e-learning tools, driving sales of connected toys. Many parents turned to interactive and educational toys to keep children engaged and learning at home. On the other hand, disruptions to global supply chains and manufacturing processes caused delays in the production and distribution of connected toys. Retail stores also faced closures during lockdowns, leading to a decline in in-store sales. However, the surge in online shopping during the pandemic provided a new sales channel for connected toy manufacturers, helping to mitigate some of the negative impacts. As the world gradually returns to normal, the market is expected to continue growing, with increased investment in digital and interactive learning tools.

Latest Trends/Developments

The connected toys market is witnessing several key trends. Manufacturers are increasingly focusing on developing health-focused toys that promote physical activity and mental well-being, addressing parental concerns about excessive screen time. Toys integrated with wearable technology and fitness tracking features are gaining popularity. Additionally, the use of AR and VR technologies in connected toys is creating more immersive learning and gaming experiences. Moreover, sustainability is becoming a major trend, with manufacturers adopting eco-friendly materials and packaging to cater to environmentally conscious consumers. The growing importance of data privacy and security has also led to the development of more secure and compliant connected toys.

Key Players

1. LEGO Group

2. Mattel, Inc.

3. Hasbro, Inc.

4. VTech Holdings Ltd.

5. Sphero, Inc.

6. WowWee Group Limited

7. Fisher-Price

8. Anki

9. Digital Dream Labs, Inc.