A new report from Juniper Research has forecast that Smart Toy sales will reach US $15.5 billion in hardware and app content revenues by 2022, up from an estimated US $4.9 billion in 2017.
This increase will primarily be driven by the growing popularity of smartphone-based connected toys and the enduring appeal of console-connected ‘toys to life’, action figures that interact with a video game via a reader device.
(TOP: The KickStarter funding campaign for Moff smart toy).
The new research, Smart Toys: Hardware, Technology & Leading Vendors 2017-2022, identified the Lego Group as being particularly well positioned in this category, with their successful ‘toys to life’ range, Lego Dimension. Juniper forecasts that 224 million smart toys will be shipped worldwide in 2017.
The study found that many players in the smart toy segment are not only appealing to children, but also to ‘kidults’ and collectors, as demonstrated by Sphero’s BB8 app-enabled droid and Lego Dimension’s A-Team and Ghostbusters sets.
In addition, the research forecasts that smart toy sales will be dominated by the US, based on historical high sales of ‘toys to life’ products and strong performance of smartphone-based smart toys.
However, China is set to disrupt this trend, with increasing disposable income and the legalisation of video game consoles for sale driving smart toy uptake. China will account for 18% of the global smart toy shipments by 2022, representing an average annual growth of 42%.
The research also found that privacy issues are a prominent concern of parents, academics and, increasingly, regulators. As smart toys develop more advanced connected features, they will increasingly be subject to both toy safety and privacy/data protection regulations such as the forthcoming European Union’s GDPR (General Data Protection Regulation).
Accordingly, Juniper recommends that vendors must be careful to ensure privacy rules are respected by their products to avoid costly fines and public relations issues.
The new whitepaper, The Internet of Toys is available to download from the Juniper Research website together with further details of the new research.
Juniper’s Smart Toys research analyses the opportunities available to investors, manufacturers and brands, covering the key markets of: smartphone/tablet connected toys, console connected toys (‘toys to life’), educational connected toys and App-connected drones.