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Does The Impending Growth Of The Metaverse Threaten The Toy Industry?

Does The Impending Growth Of The Metaverse Threaten The Toy Industry?

Any further immersion of human beings into the virtual realm tends to create concerns and worries about whether that will negatively impact on the toy industry, which is a real-world consumer products business.


At this stage we don’t really know just where the Metaverse is going to take us, but we can presume that this is going to be yet another gigantic tech revolution. Facebook’s change of name to Meta is a serious statement from a company worth $500billion+ (at the time of writing). Tech companies across the world from the U.S. behemoths like Facebook, through to China’s mighty players including ByteDance, Tencent & Alibaba are researching, investing and acquiring to try to maximise their future participation in and profit from the Metaverse. So, we can fairly certainly predict that this thing called Metaverse is coming in a very big way.

But what does this mean for the toy industry? The first point to note is that despite the massive advancements in technology in the lives of children, despite the massive growth in screen time addiction and gaming time, the toy business has thrived nevertheless. How can this be? Surely children have less play time available to toys due to all their screen time, and surely they want to be gifted in the virtual realm nowadays? The reality is that children still love being given toys and playing with them, even if they spend less time with their toys versus past generations. For parents, toys are ever more important as they offer a potential antidote to screen time and aid their child’s development.


The nature of big technology companies is to build up huge data on users and general usage, and then to maximise the elements which create maximum usage and engagement. The Metaverse, in essence, is going to add additional elements of immersive virtual reality and interaction to what we already have. While children can have Netflix playing and still play with toys, it is less likely they will be able to be lost in a VR world and play with normal toys simultaneously, so that may represent a further loss in potential play time for toys, but toys developed specifically to be immersed in the Metaverse could be huge. We only have to look back to Activision’s Skylanders, which sold more than 170m toys to see the potential of toys immersed with a digital experience. No doubt there will be a company who absolutely cashes in on integrating toys with the Metaverse.


In conclusion then humans remain rooted in the real, physical world. There may be a future where we are fully lost in digital worlds like the Na’vi people in the movie Avatar, but we are a long way from that yet. Both children and parents value toys, and the more deeply children immerse themselves in virtual worlds, the more affinity they feel for the characters, worlds and brands they experience in the digital realm, which in turn can be expected to translate into sales of related merchandise, especially toys. Moreover, it is very likely that one or more companies will absolutely nail the execution of toys in and for the Metaverse. Overall then, the toy industry should view the Metaverse as both a threat and an opportunity – if we can keep on creating compelling and attractive toys, based on themes and characters kids love and exploring how toys can interact with the Metaverse, then we may be able to grow alongside.

We run a Consultancy business helping toy & games companies get ahead. For more information, check out www.KidsBrandInsight.com/services

We also run a Strategic Sourcing Consultancy advising toy & game companies around the world on their Sourcing strategies, reviewing their vendor base & suggesting improvements. To date our Sourcing services have saved our clients $tens of millions. For more information on how we can help, just go to: www.ToyTeamAsia.com

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