The 2014 release of the LEGO Movie made construction toys the fastest growing category in 2015 and the main growth driver in the global traditional toys and games market. By 2016, however, the power of the hit movie had faded, with construction toys growing by 5% in value globally. At the same time, games and puzzles continued to gain popularity among adults, especially in North America, where category value sales grew by 14% in 2016. Globally, adults aged 20 years and over was the fastest growing demographic amongst traditional toys and games consumers. This surge in popularity made games and puzzles the fastest growing category in value terms overall in 2016.
Fastest Growing Traditional Toys and Games Categories Globally in Value Terms in 2016
Source: Euromonitor International
Licensing moves beyond Star Wars
Outside of games and puzzles, character licensing continued to be a key driving force. Licensed toys continued to grow in nearly every market, seeing 6% growth (US$, fixed exchange rates) during 2016 as a whole. Star Wars remained the single most prominent property, with significant spillover demand from the 2015 release of Episode VII. However many smaller properties continued to see improving prospects, as increasing ease of access to media globally has opened new markets to licensors. A growing number of properties are becoming increasingly multigenerational, allowing them to sell to both children and adults.
The growth in global internet connectivity over the past decade has also given an audience to smaller licensed properties with local or regional impact. Properties like BoBoiBoy in Malaysia and Calimero in Italy are often based on local folklore and focus on online media distribution. Euromonitor International will be providing further analysis on these local licences in 2017.
Growth in Value Sales of Traditional Toys and Games by Region in 2015 vs 2016
Source: Euromonitor International
2015 was marked by a significant deterioration in macroeconomic conditions across the biggest emerging markets, such as Russia and Brazil, with carryover effects into 2016. However, by the end of the year, conditions had begun to stabilise, pushing the global toys and games market back towards growth by the end of the year. While overall economic growth remained subdued compared to previous years, currency devaluation was far less of a factor in most emerging markets in 2016. With the impact of currency issues receding, the toys and games market is returning to its previous dynamic of emerging markets leading overall growth in traditional toys and games. And emerging markets are expected to become even more important in the future, as high-income growth combined with growing child populations will make emerging markets increasingly prospective.
STEAM influence continues to rise
Science, technology, engineering, arts and mathematics (STEAM) toys continued to see their influence rise in the global traditional toys and games market in 2016. Parents across the globe view toys as a way to both entertain and educate their children, getting them ready for an increasingly competitive collegiate and workplace atmosphere. Technology in particular emerged as a focus area due to the number of computer- and technology-related jobs most parents believe will provide the best prospects for their children. This has prompted many interactive toys with programming elements to enter the market, such as Fisher Price's Code-a-pillar, with more introductions, such as LEGO Boost, expected in 2017. The popularity of STEAM toys is one of the consequences of age compression, as children also spend less of their lives playing with ride-ons and plush toys. However, continued growth in sales to adults illustrates the opposite effect of age compression as children who grow up faster are retaining interest in toys into adulthood on a scale not seen in previous generations. Categories with proven multi-generational appeal like construction, remote control, and action figures are therefore expected to see the fastest growth over the next five years.