And That Was 2025: Wrapping Up The Toy & Game Business In 2025

And That Was 2025: Wrapping Up The Toy & Game Business In 2025

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2025 EXPECTATIONS vs REALITY.

After a few tougher years prior, expectations heading into 2025 were positive. My prediction was for mid to high single digit growth for the global Toy & Games market overall. It looks like this prediction is going to be about right in the end, although there were many points in the year where this looked by no means certain.

Pretty much all year we saw positive reports on sales levels from Circana and other sources. Yet the one word which kept coming up in my conversations with people all around the world of Toys & Games was ‘TOUGH!’ – the market demand from consumers may have been strong, but things have never felt easy this year for most of the people I encountered across continents and departmental functions.

It now looks like we will finish the year with at least modest growth, and there’s a fair chance of us seeing the fairly significant growth I originally predicted. That’s not a small thing in a tough world with everything going on and bearing in mind how mature the Toy & Game business is at this point.

Frankly there are far worse industries to work in, and we should probably all take the time to breathe deep and recognise that fact.

TARIFF TRIBULATIONS – WERE THEY TRANSIENT?

The first gigantic curveball of the year was the sudden introduction of potentially destructive tariffs on imports to the USA, especially from key Toy & Game producing countries – with China being lined up in the sights of President Trumps Tariff blunderbuss. At one stage the tariffs lined up on US imports from China were sitting at a hefty 145% (!). Anyone who has spent more than 5 minutes in the Toy & Game business knows that is completely untenable and commercially unviable.

That period of Tariff frenzy back in April & May 2025 was the worst I have seen in 26 years working in this business – forget the dot.com bust, forget the global financial crisis and forget the COVID-19 pandemic – having 145% tariffs on goods from the country producing c. 80% of all Toys & Games heading into the world’s biggest market by far represented the worst crisis of this millennium for the Toy industry (as well as many others).

If you add 20-30% tariffs, prices will go up a bit and margins will go down a fair bit for retailers & suppliers, but at the end of the day nearly everyone will stay in business, stay employing all those people and stay producing the Toys & Games that Kids want. Make that 145% and nobody can stay in business for long.

I’ve been beating the drum for nearly a decade and a half at this point about the Toy industry strategically diversifying to be less reliant on China, not dropping China, but reducing supply chain risk by diversifying. Lo and behold the entire industry decided they had to diversify over night. Things went freakin’ crazy!

I have never had a more intense work period than April & May 2025 trying to help clients set up distribution in new geographies in a hurry. Having turned 50 earlier in the year, in April I had a cruise booked to the Norwegian fjords. Every time we came within 5km of land on this boat, my phone would light up “I just landed in Ho Chi Minh City, Bengaluru or somewhere else, what factories can you recommend/set up meetings with.” Honestly I was quite glad when the boat went further away from land again and I could get some peace and quiet.

And then the USA & China seemed to reach a peace deal on tariffs and things were moderated significantly which frankly can only be seen as a good thing.

And as of now things seem a little calmer, although we’re still waiting trade deals with some key geographies, including notably between the USA & India.

My prediction is that the Tariff scenario we saw in 2025 will not be repeatable at that scale as it’s very clear that any more tariff increases will send inflation upwards while President Trump is under pressure on cost of living issues from his domestic audience.

But let’s see on that, either way, one good thing to come out of this year’s Tariff frenzy is the industry finally realising that we really do have to geographically diversify in a fast changing world.

STRONG MOVIE SLATE

One of the things that made me bullish on 2025 was the movie slate, the strongest since the pandemic. Ok there are arguments nowadays to argue about how important movies are as a driver of sales versus how it once was pre social media, pre-YouTube, but movies are still massive events getting millions of ‘bums on seats’ in cinemas/movie theatres around the world, and each blockbuster movie being accompanied by massive marketing spend and ‘Noise’.

And lo and behold, the following chart, courtesy of Box Office Mojo shows that 7 out of 10 of the biggest grossing movies of 2025 are very ‘Toyetic’. Zootopia 2 and Lilo & Stitch both smashed the $billion global box office level, and were 2^nd and 3^rd biggest grossing movies of the year.

Lilo & Stitch was a particularly poignant movie for me as I worked on Toys for the original movie with Hasbro back in c. 2001-2002 at the start of my Toy industry career. One of the challenges the we had back then was the clear genderification of Toy aisles…with a lead female character in Lilo and a lead ‘male’ character in Stitch, it wasn’t totally obvious where to merchandise the Toys. Fast forward nearly a quarter of a century and that issue is much reduced in significance, e-commerce effectively takes away that level of significance of categorisation. A parent can just search for ‘Lilo & Stitch Toys and find them, versus back in the day when they would have to check in both ‘Boys’ and ‘Girls’ aisles in physical retail. And of course attitudes to Gender and Toys have changed considerably as well.

Nowadays theatrical releases of movies are just one part of the opportunity with streaming services in effect offering a second hefty distribution channel for movie content with a long tail which clearly has had an uplifting effect on Toy sales in 2025. Disney alone has c. 132m Disney+ subscribers and something like 196m total subscribers including Disney+, Hulu & ESPN. This is a massive install base to beam Disney content direct into homes around the world, and that’s before you factor in Netflix, Amazon Prime & other streaming services.

LABUBU

One of the things about qualifying as an ‘industry veteran’ is that you start to take a lot of things for granted. One of which is that there is a load of stuff which is always huge every year i.e. Pokémon was the big thing when I first joined Hasbro in early 2000, in fact Pokémon had been so huge in 1999 for Hasbro in Europe that when the craze slowed down quite a lot in 2000 it reduced total European sales by c. 1/3! But ever since then Pokémon has been a massive brand and played a huge role in the Toy & Game business, along with many others – but we already know about big established brands like that, so instead we tend to focus on what’s newer. So while I’m focusing on Labubu here, that’s because I have spent a quarter of a century talking about everything there is to be said on that topic!

Just in case you somehow don’t know what Labubu is, according to Grok, Labubu can be described thus:  “Labubu is a mischievous, elf-like monster character with pointed ears, sharp teeth, wide eyes, and a furry body—often described as "ugly-cute.” In other words it’s a soft Toy with a vinyl face.

Like a lot of overnight successes, Labubu has actually been around for quite some time having first been created back in 2015. Pop Mart, the manufacturer of Labubu is an interesting study in itself, but I’ll leave that for another article. Nevertheless Labubu’s massive global success in 2025 lead to CEO Wang Ning forecasting somewhere between $2.8bn USD to $4.2bn depending on how the year finished up. Just to put that in context, Habsro’s full year reported revenues for financial year 2024 were $4.135 billion (!).

The fact that a company which only started in Toys around a decade ago can dream of reaching annual revenues on a scale which could match long term Toy giant Hasbro is totally remarkable.

In terms of explaining the success factors with Labubu, that’s not that difficult – blind box format, celebrity endorsements, distinctive visual style etc. - what’s always more difficult is to know which of the thousands of new Toys released every year will catch the moment and be the one that really breaks out as per Labubu in 2025. If you’re a cynical industry hack like myself, and if you’re honest, you look at Labubu and probably think you get why the formula works, but then still don’t really understand why this particular expression of that formula worked so well.

Like all massive global trends, the question which is always asked is ‘how long will it last’. I always remember what one very wise industry person told me about this type of wave of success “I want to be there at the christening you see, not there for the funeral”. No brand remains on that kind of soaring success wave forever, but just like the Pokémon brand I referenced above, the question is can Labubu establish itself as a perennial success going forward just as Pokémon did? The answer to that is probably yes, but time will tell…

AI & TOYS – SMART TECH BRINGING EVER DEEPER PLAY EXPERIENCES FOR CHILDREN

Choosing what to review about a year is always subjective, there are so many things you could look at, but in the end choice of topic is always going to be influenced by your own experiences.

This year one of the WOW experiences I have had is working on AI Toys with my client Fluffbotics. Beyond this project though, I feel like Technology has at last begun to fulfil what has been a forthcoming promise – for quite some time the Tech has been flirting around true 2 way interactivity. Toys have been getting better at talking to children for decades, but they didn’t get good enough at listening to what children say to the Toy and then genuinely responding with some degree of intelligence. And even when this tech started to come, it was so clunky and took too long to process and respond leading to unfulfilling play experiences.

Having seen inside the hood of what AI can do for Toys with Fluffbotics, I am now absolutely convinced that some of the best-selling Toys going forward will be AI enhanced Toys. Combine the child’s favourite characters with an LLM which can listen, understand and reply back with full authenticity to the character and magic happens.

Interestingly, one of the major pushbacks I received while pitching AI Toys to Toy companies this year was that Licensor’s/brand owners would not want an AI Toy having free reign to get creative with storylines, characters and what characters have to say. Funnily enough one of the major examples used for this was The Walt Disney Company, who are known for enforcing brand guidelines strongly.

My reaction to this objection was that AI and content, and therefore AI & Toys are an unavoidable juggernaut as was music streaming, the internet and all these other tech waves. If brand owners don’t take control of this, it will happen anyway, so you may as well jump on board the bus and take at least some control of what’s out there.

Then Disney announced a deal to co-operate on content with Open AI to allow their Sora platform to generate short AI videos utilising 200+ Disney, Marvel, Pixar & Star Wars characters. Disney’s CEO Bob Iger was quoted thus: “It gives us an opportunity, really, to play a part in what is really a breathtaking, breathtaking growth in essentially AI and new forms of media and entertainment”

Standby people, because what happens in content happens next in Toys.

Now to be clear there are some significant and valid concerns about AI LLMs interacting with children. The risk of AI saying something inappropriate or even harmful is real, and if Kids do truly form relationships with Toys, then they will share secrets, and if enough Kids do that eventually (sadly) there is going to be a child who is in danger or has been harmed expressing thoughts and feelings that parents should know about.

So AI Toys will need parental controls, guard rails and the ability to flag concerning conversations with the child. But that is all also inevitable as it is clearly so pre-requisite in this case.

My conclusion on this topic is that you’re going to see a lot of Toys featuring AI being best sellers going forward. They won’t be at the cheaper end of the price point spectrum, as the Tech integration comes at a cost, but if you deliver unprecedented play experiences and get high volume on high priced items $sales levels get large very quickly.

AND SO THAT WAS 2025…

2025 has certainly been an ‘interesting’ year! On reflection it’s been a good year for the global Toy & Game industry, but with many many challenges. The broader world has also seen it’s terrible tragedies, wars and turmoil which has been saddening. But the human spirit shines bright, and most of you reading this, just like me have a lot to be truly thankful for…and sometimes we forget that.

This is a good place for me to say a massive thank you to our clients, friends, colleagues, suppliers and of course anyone who has read, watched or listened to my rambling thoughts.

Wishing you a very Merry Christmas, hope you get the chance to relax and enjoy time with your families, and here’s to peace on earth and goodwill to all humankind.

GREAT PEOPLE ARE YOUR BIGGEST ADVANTAGE

Toy Recruitment Consultancy has become one our most in demand services. We have a social and own media platform (including this newsletter) which allows us to directly access c. 25k people in the world of Toys & Games from across the planet, aside from which after 25 years of grind, we know a lot of Toy & Game people across the world.

So if you have key senior roles to fill or if you just can’t find someone qualified for a key role you need to fill in your country or overseas, just drop me a DM and I’ll explain how we work/the costs involved or check out our Toy Recruitment website here: www.ToyRecruitment.com 

FLUFFBOTICS AI TOYS

I’m currently advising FLUFFBOTICS AI Toys. Backed by Google and with a specifically developed child centric LLM driving the platform and the Toys, we want to show you next gen Toys – exhibition in Nuremberg at Spielwarenmesse and New York. Come see us if you want to see cutting edge A.I. powering great and safe play experiences:

Spielwarenmesse Booth: Halle 4A, A-18

New York Toy Fair Booth: Launchpad, Level 1, Booth 6611

FACTORIES

Board Games factories – we represent leading Games factories in India, China & Vietnam, if you need to geographically diversify & find good reliable factories offering competitive prices just get in touch.

Factory group in China & Cambodia - producing jewellery, sensory compounds, cosmetic, DIY activity, art & crafts components for the world’s biggest retailers. These types of products can be problematic for compliance with chemicals and all that. Our partner in this space has an unparalleled record of hitting compliance standards for many of the world’s biggest retailers. Just dm to find out more/get quotes…

THE KEY WORD FOR 2026 IS ‘PARTNERSHIP’

Heading into 2026, a key strategy for our business is ‘Partnerships’. By leveraging my contacts, relationships and industry knowledge in conjunction with sector specific partners I believe I can ramp up both the number of companies I’m helping each year, but also go deeper and further in helping our clients to deliver success for their businesses:

PRODUCT SOURCING AGENCY – INDIA

I’ve been helping companies source from India for c. 12 years. I’ve often thought about trying to set up a Sourcing agency working on the ground to help companies smooth out the bumps which often come manufacturing in India. I’m now working with a really good partner on the ground and so we’re heading into Toy Fair season offering to help people on any level from operating as a true hands off Sourcing agency you can buy the products you ned from through to production line inspections.

With the tariff landscape still uncertain, If you want a partner operating on the ground for you in India, and other geographies, just drop me a line…

PERFORMANCE MARKETING AGENCY

As part of my work in India, I have worked extensively in and around Bengaluru (known as India’s Silicon Valley) – this city is at the heart of India’s role as a key supplier of tech services. So it’s no surprise that I have met a number of Tech entrepreneurs educated at some of the best U.S. universities and now running companies back in India.

For 2026 we’re rolling out a partnership with a leading Performance Marketing company to help companies ramp up and exponentially grow revenues on Amazon and across other platforms. I’ll be applying a quarter of a century of brand marketing expertise working on major iconic brands such as Monopoly, Play-Doh, Disney and more in conjunction with a team of boffins who live and breathe digital marketing all day every day.

If one of your New Year resolutions for 2026 is to ramp up your Amazon business, and if you’d like a Free review of your Amazon business (subject to availability/demand), please just drop me a DM…

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This article is copyright 2025 RG Marketing Ltd, all rights reserved. All contributors to this article contributed under a work for hire basis on behalf of RG Marketing Ltd. Please also note, this article was written and published in the United Kingdom, and while our research for this article has utilised several AI LLMs, all of the above (bar one reference from Grok on Labubu and an AI generated image of peace) was written by a genuine bonafide human being!