Smart Toy Revenues to Hit $2.8bn this Year, Driven by Black Friday & Christmas Holiday Sales

New data from Juniper Research has forecast that Smart Toy sales will reach $2.8 billion in hardware and app content revenues this year, driven by the popularity of the console-connected ‘toys to life’ segment.

With smart toys from the likes of Activision and Nintendo already enjoying a successful 2015, the upcoming Black Friday weekend as well as the Christmas Season are set to bolster sales hugely.

Toys get Smarter

The new research, Smart Toys: Hardware, Apps & Technologies 2015-2020, found that smart toys which connect to mobile apps and games consoles are emerging as the key market for toy vendors. Bridging the physical-digital divide, and even leveraging the cloud to create interactive ‘intelligent’ toys, vendors are able to capitalise on the mobile and console ecosystem.

First popularised by the Skylanders franchise, beginning in 2011, the ‘toys to life’ segment has gone from strength to strength. Indeed, LEGO’s entry into this market in September 2015 with its LEGO Dimensions videogame will only serve to heighten the market’s success.

Price Sensitivity Plays Major Role

The research found significant regional differences in the likelihood to purchase smart toys.

“Price is one of the biggest hurdles for consumers,” noted research author Steffen Sorrell. “The smart toy carries a premium price at the moment, particularly those that connect to mobile devices, although we expect this barrier to lower somewhat by the end of the decade.”

Countries such as the US, Japan and the UK are therefore high-interest markets for vendors, owing to their highest on-average annual spend on smart toys per child. According to this metric, Juniper has ranked the top 5 spending countries for 2015:

1. UK

2. US

3. Japan

4. Canada

5. Germany

Other Key Findings

  • Security: Vendors will likely require third-party software expertise to avoid PR disasters caused by hackers.
  • Hardware and App Revenue Streams: Offering paid additional content for toys via the app will become of increasing importance to vendors as a revenue stream.

The whitepaper, Smart Toys ~ Do Toys Dream of Digital Lives?, is available to download from the Juniper Research website together with further details of the new research and interactive dataset.