Connected Toys Market Size & Analysis for North America, Europe, APAC, South America, Middle East and Africa - US, UK, France, Germany, China – 2025-2029

Connected Toys Market Outlook 2025-2029

The connected toys market is expected to grow by USD 10-12 billion at a compound annual growth rate (CAGR) of 20%-23% from 2025 to 2029. Exact values for this market can be accessed upon purchasing the report. The growth of this market is largely driven by the increasing adoption of Internet of Things (IoT) technologies and the rising popularity of smart toys that engage children in interactive play. Parents' growing interest in educational toys that combine entertainment with learning, as well as the demand for personalized, tech-driven experiences, are key factors driving this trend. Additionally, the growing penetration of smartphones and tablets among families is contributing to the rapid development of connected toys that integrate with digital devices.

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What are the Segmentation Insights on the Connected Toys Market?

The connected toys market can be segmented based on product type and end-user.

1. Product Types:
   • Interactive Toys
   • Educational Toys
   • Remote-Controlled Toys
   • Virtual and Augmented Reality Toys
   • Robotics and AI Toys

The leading subsegment in this category is educational toys, as parents are increasingly seeking toys that not only entertain but also support cognitive and developmental skills in children. These toys often integrate learning apps or connect to digital platforms to provide personalized educational content.

2. End-Users:
   • Children (0-5 years)
   • Children (6-12 years)
   • Teenagers (13+ years)

The children (6-12 years) subsegment leads this market, as children in this age group are highly engaged with connected toys that combine entertainment and interactive learning, offering greater interactivity and complexity suited to their developmental stage.

What are Connected Toys Market Dynamics?

Market Drivers

The growth of the connected toys market is primarily driven by the increasing integration of Internet of Things (IoT) technologies into toys, allowing for more interactive and personalized experiences. Parents are increasingly seeking educational toys that promote cognitive development while keeping children entertained, fueling demand for toys with smart features that connect to mobile apps or digital platforms. Additionally, the rising use of smartphones and tablets among children has accelerated the demand for toys that can interact with these devices, making tech-enabled toys more accessible and engaging. The growing awareness about the importance of early childhood education also plays a significant role in driving the market.

Market Trends

One of the key trends in the connected toys market is the growing focus on educational and STEM (Science, Technology, Engineering, and Math) toys that blend learning with play, catering to the increasing demand for toys that provide both fun and developmental benefits. Another trend is the rise of augmented reality (AR) and virtual reality (VR) toys, which are becoming more popular for immersive play experiences. Additionally, voice-controlled toys and artificial intelligence (AI)-enabled toys are gaining traction, as they allow children to interact with toys in more intuitive and engaging ways. There is also an increasing emphasis on data privacy and cybersecurity in connected toys, as parents are more concerned about the safety of their children’s information.

Market Opportunities

The connected toys market presents significant opportunities for innovation, particularly in AI-powered toys that offer personalized learning experiences and can adapt to a child’s developmental progress. There is also potential in expanding into emerging markets, where the rising adoption of smartphones and increased spending on children’s products are driving demand for connected toys. Collaborations with educational platforms and brands can create new opportunities to enhance the educational value of connected toys, offering parents more value and engagement. Additionally, the development of sustainable, eco-friendly connected toys represents an untapped market opportunity as consumers increasingly seek environmentally conscious products.

Regional Analysis for the Connected Toys Market

The North American region is the leading market for connected toys, driven by high consumer spending on innovative and educational toys, as well as strong technological adoption. The presence of major tech companies and a growing trend of integrating IoT, AI, and digital features into toys has further fueled market growth in this region. Parents in North America are increasingly interested in products that combine entertainment with learning, which has led to a higher demand for connected and smart toys. Additionally, the region benefits from advanced e-commerce platforms, making these tech-driven toys more accessible to a broader audience.

The United States is the leading country in the North American connected toys market, due to its large consumer base, high levels of disposable income, and strong demand for tech-driven, educational toys. The U.S. has seen a surge in the popularity of connected toys, especially those that offer interactive features and integrate with digital devices like smartphones and tablets. Additionally, the country is home to many of the world's top manufacturers and innovators in the toy industry, contributing to a competitive market where companies continuously push the boundaries of technology and play. The strong presence of online retail channels has also boosted accessibility, allowing U.S. consumers to easily purchase connected toys from various brands.

Key Market Players

Leading companies in the connected toys market include:

1. LEGO Group
   LEGO has expanded its product offerings with connected toys like LEGO Boost and LEGO Hidden Side, which combine traditional building sets with augmented reality (AR) and digital interactivity, providing an immersive play experience.
2. Hasbro, Inc.
   Hasbro offers a range of connected toys under brands like FurReal Friends and Nerf, incorporating smart technologies and app connectivity to enhance the play experience, particularly through AI and interactive features.
3. Mattel, Inc.
   Mattel has been at the forefront of connected toys, offering innovative products such as the Barbie Hello Dreamhouse and Hot Wheels id, both of which integrate smart features and app connectivity for interactive play and learning.
4. VTech Electronics
   VTech is a leader in the educational toy sector, offering connected toys like the VTech KidiZoom Camera and interactive learning systems that blend traditional play with technology to promote skill development in children.
5. Spin Master Ltd.
   Spin Master is known for its connected toy lines, including the interactive robotic toys like the Hatchimals and Air Hogs, which use sensors, apps, and smart technology to create engaging and customizable play experiences.

Competitive Landscape:

The competitive landscape of the connected toys market is marked by a high level of innovation, with major players like LEGO, Hasbro, and Mattel leading the way in integrating advanced technologies such as AI, augmented reality (AR), and app connectivity into their toys. Companies are increasingly focusing on offering educational and interactive experiences that combine entertainment with developmental benefits, while also addressing growing consumer concerns about data privacy and security. The market is also seeing strong competition from emerging companies that specialize in tech-enabled toys, further driving the need for continuous innovation and product differentiation.

Market Report Scope

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Technavio’s reports provide a range of market insights, including:

• A detailed analysis of the market, featuring market size, growth rate, segmentation, and regional performance
• In-depth analysis of the drivers, challenges, and other dynamics that will impact the growth of the market
• Predictions about upcoming trends and changes in consumer behavior
• Detailed information on key market players, including market positioning, product offerings, and more

Frequently Asked Questions About This Market

1. What is driving the growth of the connected toys market?
The growth of the connected toys market is driven by the increasing demand for interactive and educational toys that incorporate technologies like AI, IoT, and augmented reality (AR). Parents are seeking toys that promote both learning and entertainment, while the rise of smartphones and tablets makes tech-enabled toys more accessible.

2. What are the key trends in the connected toys market?
Key trends include the growing popularity of educational toys that integrate smart technology, the rise of augmented reality (AR) and virtual reality (VR) toys, and an increasing focus on data privacy and cybersecurity to address parents' concerns about online safety.

3. Which region leads the connected toys market?
North America leads the connected toys market, driven by high consumer spending, the adoption of advanced technologies, and a strong interest in educational toys that integrate with digital devices like smartphones and tablets.

4. What are the top companies in the connected toys market?
The top companies in the connected toys market include LEGO Group, Hasbro, Inc., Mattel, Inc., VTech Electronics, and Spin Master Ltd., all of which offer a range of innovative toys that combine traditional play with smart technologies.

5. What are challenges related to connected toys?
The main concerns with connected toys are related to data privacy and cybersecurity, as parents are increasingly cautious about the safety of their children’s data when interacting with connected devices.

Table of Contents

1. Executive Summary

2. Scope of the Report

3. Market Landscape

3.1 Market Ecosystem

3.2 Market Characteristics

3.3 Market Segmentation Analysis

4. Market Sizing

4.1 Market Definition

4.2 Market Sizing 2024

4.3 Market Size and Forecast 2025-2029

4.4 Historic Market Size (2019-2023)

5. Impact of Technology

6. Five Forces Analysis

6.1 Bargaining power of buyers

6.2 Bargaining power of suppliers

6.3 Threat of new entrants

6.4 Threat of substitutes

7. Rivalry among competitors

8. Market Segmentation by Product Type

9. Market Segmentation by End-User

10. Customer Landscape

11. Drivers and Challenges

12. Market Trends

13. Competitive Landscape

14. Appendix

14.1 Research Methodology

14.2 List of Abbreviations