Tag Archives: global toy market



NPD Group’s star analyst in Europe, Frédérique Tutt, recently posted a blog post looking at what has happened in the toy business in the first part of 2022. Following some good years for the toy industry during the Covid pandemic, Tutt reports that global sales were up just 1% year on year for the months January to April 2022.


While a performance which is more or less flat year on year would not normally be seen as a negative thing, especially when the previous few years were so positive. The issue of course at the time of writing is that we are seeing high inflation rates – 8.3% year on year for the USA & around the same for the UK. These official interest rates tend to significantly underplay reality, as the list of items which are tracked to monitor inflation often exclude items with high inflation. In the UK currently for instance, household energy bills have soared massively in excess of the official figures, as have fuel prices at the pumps for fossil fuel powered vehicles. The true inflation figures I suspect could be as much as double what is being reported by governments.

The issue then for the toy business is that when inflation is so high, an increase of market value of 1% is in fact a decrease of at least 7%, if not twice as much as that in ‘real terms’ taking account of inflation and the devaluing of consumer disposable income.

I am known for being an eternal optimist, with some of the more cynical souls in our industry rejecting our content output for being overly optimistic. Bearing in mind my natural propensity for optimism about the prospects for the toy business, I am concerned for the first time in more than  20 years in the toy business that we could see the first significant market reduction in all that time. Our industry which is so famously resilient to tough times, made it through the dot com bust of the turn of the millennium, the global financial crisis and the Covid pandemic. However, we have not seen such high inflation since the 1970s, and when consumers are struggling to find the funds to fuel their vehicles, struggling to heat their homes and struggling to pay for food and other costs which are in an upward inflationary cycle, the prospects for toy sales must surely be lower.

We know that toy pricing has gone up & will go up more, but I don’t see that as a fundamental problem, because our retail pricepoints have been kept artificially low for years by price pressure from big box shifting retailers. On a comparable basis, toys & games, even at higher pricing represent good value for consumers versus other product categories and their comparative price inflation over time. The issue is more one of Maslow’s hierarchy of needs. Quickly explained, Abraham Maslow modelled human needs, with the more basal needs coming first, and then moving upwards to less physical, rudimentary needs. The issue we have now in the toy industry is that if consumers are pushed further back down the hierarchy of needs by inflationary pressures on their household finances, then it could have a negative impact on demand.


I sincerely hope that I am wrong, in fact I will be delighted if I have got this wrong, but it looks like to me like 2022 could be a tough year for the toy business, and we may be in for a couple of tougher years than we have experienced in my couple of decades in the toy business. It could be time for toy companies to batten down the hatches and ride the stormy waves ahead…



Around about this time of year toy companies begin to have a fairly clear idea (+/-10%) of how 2018 is going to pan out financially. Some will be right now readying the red pen next to their org charts as 2018 pans out tougher than anticipated. Some will be fighting desperately to avoid getting carried away with a runaway success of a year (batten down the hatches – can next year possibly be as good?). Most will be somewhere in between the two extremes of success and lack of success.

So what is the outlook from this mid year vantage point for the toy industry as a whole? Well, there are numerous trends & activities to identify:

Global toy industry set to grow a few percentage points in 2018 – our analysis suggests a single figure growth position for the global toy market in 2018.

Licensed toys are set for yet another successful year – as Hollywood continues to churn out multiple (dare I say countless!) blockbuster toyetic movies, this year seems set to continue the trend. The fact that the toy industry has seen significant growth in the last few years appears to be primarily due to fantastically consistent and frequent franchise management on behalf of Hollywood. 2018 is (at the time of writing) slated to be another strong year, and 2019 is if anything looking even better with Toy Story 4 & a Minecraft movie joining the plethora of super heroes of all shapes, types & genders.

These are interesting times among the major global toy companies – I can’t remember a more interesting time in terms of the competitive position & status of our major leading toy companies. Lego has moved from being just a toy company to also being a kids entertainment company – with 2 Lego movies hitting global box offices in 2017 and with much more to come. Hasbro is in an interesting position having been hugely successful with the content ownership strategy of the last ten years or so, the question now though perhaps is what happens next…how do they keep that massive momentum going? Mattel has not had a great few years truth be told, with pressure to modernise corporate strategy, pressures on traditional cash cows like Barbie and a significant depreciation in stock market value – the (comparatively) new CEO Margaret Georgiadis (ex-Google) seems like the right person to help Mattel embrace the 21st century media & online worlds, but we’re yet to see concrete steps in that direction from Mattel. And finally, with regard to Spin Master, what an amazing last few years they have had – and I struggle to see how they won’t continue to grow for the next few years at least – I see their key growwth advantage being acquisitions in the coming years, because Hasbro & Mattel need deals to the value of at least several hundreds of millions of $USD to make a deal substantial. Spin Master can scoop up the next level down of acquisitions at the rate of a few per year with little bid competition and thus continue to grow.

Fidget Spinners likely to fade away (?) – most industry veterans I have spoken to anticipate finger spinners will burn bright and quickly before fading away. Typically such fads die when the major western markets hit school summer vacation season, and the viral/word of mouth effect of the school playground fades away for a few months. We seem to get one of these super fads every couple of years, and for 2017, this was certainly it. I’ve seen various estimates as to the likely total sales value of fidget spinners globally…I’m not going to comment here, as numerous financial companies read these articles & lose speculation is not helpful to such institutions…bit nevertheless bearing in mind the total annual value of the toy market varies (from data source to data source) between around $80-100 billion, the reality is that fidget spinners are unlikely to make that significant an impact on total 2017 toy market value.

Manufacturing diversification = work in progress – as price inflation has been an ongoing issue in China, the heartland of toy manufacturing, the toy industry as a whole has been assessing the various alternatives to China’s huge capacity. Based on my experience in helping toy companies with alternative sourcing, the reality still remains that China dominates global toy production capacity still, and will do for years to come. However, we have seen some of our clients shift a proportion of their toy manufacturing to countries such as India, Vietnam, Thailand etc., and so far we’ve seen our customers save around $4m USD p.a. Peanuts in the grand scheme of things, but not chump change either!

Emerging/non-traditional markets still the focus – for as long as I’ve been in the toy business (since the late ’90s), toy companies have chased the glitzy exotic upside offered by ’emerging’ or non-traditional markets. The reality historically has tended to be that focus on the major western markets has yielded the best results. However, in terms of market growth potential, China, India and other such non-traditional markets are growing at a pace beyond what is likely or even possible in very mature toy markets like the USA, UK & Western Europe.

I’ll be back in a few months time to take a first look at how 2019 is likely to pan out for the global toy market.


by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy companies around the world, which helps people & companies to get ahead in the toy industry, find the right toy & game factories and to consumer research test their products with kids and parents.