Tag Archives: augmented reality toys market

Augmented Reality & the Toy Business: Opportunities Ahead

Augmented Reality & the Toy Business: Opportunities & Limitations

Augmented reality has been around for quite a while, dating back to at least the late 1980s in a technically limited format of course. The best-known iteration of augmented reality in the world of kids and entertainment is of course Pokémon Go, with more than 1 billion downloads. During the peak of Pokémon Go, people around the world were randomly wandering around trying to find Pokémon characters. There are many theories about why this iconic A.R. experience became so popular, but the combination of a highly collectable set of characters and ‘secret’ characters spread about the real world which nobody else can see were clearly completely compelling.

Obviously, sales of Pokémon toys & games, especially the collectable card game, soared alongside the success of Pokémon Go, yet augmented reality remains only an occasional feature/add on for toys. Why is that then, and where do the opportunities lie with this technology?

Looking back to Skylanders which between 2011 and 2016 was phenomenally successful in terms of integrating toys and interactive play experiences (albeit via different technology) it is abundantly clear that merging toys and interactivity together can be very compelling. The challenge though with Skylanders was that the game format relied on a fully developed video game experience which is a $multi-million development cost way beyond the reach of 99% of toy companies, and those toy companies who could afford it were themselves badly burned by failed explorations into the world of video games.

Where augmented reality toys offer much broader opportunity is in the far cheaper development costs. Whereas a full video game development budget would be $millions or even tens of millions, an augmented reality app & integration for toys is likely to cost thousands. When you consider the cost of tooling on a toy product line can be $tens of thousands for even something fairly simple, and when you consider marketing budgets of 5-15% of sales value, it is perfectly clear to see that augmented reality can be implemented with toys easily either via the product development or marketing budget. Why then don’t more toy companies use augmented reality in their products?

The toy business is not often quick to adapt. In an industry where many product formats have not really changed over decades, the culture and management ethos of many toy companies is more backward looking than forward compared to many industries today. If you can sell perfectly good quantities of toys without investing in extra funds in interactivity, why wouldn’t you? The answer of course is new opportunity.

Augmented definition: “having been made greater in size or value.”

Adding augmented reality can make some play experiences more compelling, and that in itself should be enough to ensure toy companies at the very least evaluate what A.R. can do for their products.

The reality is that many toy people look at toys with augmented reality as gimmicky, but as with every technology implemented within the toy business the point is to make the play value greater – to augment the experience.

There are some clear areas of opportunities within the toy business from A.R.:

Firstly, the area of ‘edutainment’ is worth considering. While children naturally tend to want to learn, some topics are more interesting than others. Technology which brings stories, scenes, people and things to life can be of serious benefit. For instance, a science kit could have an add on of an augmented reality Albert Einstein, Newton or Edison, but it could also have an A.R. representation of the human body, a map and so much more. This seems to be one of the most promising areas for augmented reality in toys.

One of the most powerful impacts of technology is to bring toys and toy characters to life. Augmented reality can certainly offer a lot in terms of deepening immersion and interaction with particular characters.

Social play experiences i.e. board games can be enhanced by A.R. – Spin Master’s Hedbanz game would be a good example of this. The player might be wearing a pig on their head but add an app with A.R. and suddenly the player also has a massive hilarious pig snout.

There are many opportunities with A.R., and of course the technology is only going to get better, with more wearable tech solutions on the way to offer huge opportunities for play integrations with toys.

This article was inspired by our interview with Wikitude, a leading Augmented Reality company, for our Playing At Business podcast to be released soon.


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Have you listened to our Playing At Business podcast? We analyse key product categories in the toy business, discuss key trends and interview amazing people from across the world of toys. To find out more: www.PlayingAtBusiness.com