There is no denying that the past few years have significantly accelerated the digitization of childhood. The play and learning experiences that dominate childhood have been largely moved online, with physical toys enhanced with digital elements and online platforms supplementing, if not outright replacing, real-world playgrounds for kids and teens to socialize with each other. As a result, the digital influence in the toy industry has been increasingly prominent. The dominance of video games, both as a media channel and a cultural force, is a good indicator.
Yet, at the same time, there’s a counter-trend developing that foretells a comeback of old school physical toys. Whether it’s the trainsets of the 1970s or Transformers from the 80s, an increasing portion of young adults are feeling overexposed to digital leisure experiences and instead are intentionally reconnecting with physical play. And toy brands have been taking notice. But digital play is not going anywhere either; instead, more toy brands are exploring a hybrid approach that leverages both physical components, as well as digital overlays and content, to complement each other and create next-level play experiences.
As with any industry these days, the prospect of slowing growth and recession looms over the toy industry as well. Nevertheless, to withstand the looming economic downturn and get ahead of the shifting consumer behavior, toy brands should take the following four emerging trends into strategic consideration.