Connected Toys Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2030)

Connected Toys Market Size

Connected Toys Market Trends & Growth Drivers

Growing Adoption of Smartphones Is Major Trend in Market

• The growing adoption of smartphones is a major trend impacting this market, as they offer a familiar and convenient control interface for many connected toys.
• Another impact is the role of smartphones as connectivity hubs, continuously linking connected toys and facilitating data transfer and access to cloud-based servers.
• Moreover, the app ecosystem enables toy makers to use established smartphone app stores to deliver software upgrades, new features, and complimentary applications.
• Additionally, the expanding play possibilities, multi-device ecosystems, and familiarity with touch interfaces are other impacts of this trend on the market.

Social-Emotional Learning Is Key Driver for Market

• Social–emotional learning (SEL) is the process through which children and adults develop the knowledge, attitudes, and skills necessary to understand and manage their emotions, set and achieve positive goals, and demonstrate empathy for others.
• Another key aspect of this driver AI-powered interactions. Smart toys are being designed to teach children about relationships, emotions, and social circumstances using artificial intelligence, to respond appropriately.
• Moreover, another use case is emotional recognition, with many toys featuring sensors and AI algorithms that can recognize a child's emotional state and assist them in the development of emotional literacy.
• Additionally, storytelling and roleplay, feedback and coaching, customized learning, collaborative playing, and parent involvement are some other advantages of connected toys in regard to SEL that drive this market.

High Development and Production Costs Are Major Challenge for Market

• The high development and production costs are one of the major challenges for this market.
• This is because the production of connected toys involves more-complex assembly processes and higher-quality components in comparison to traditional toys.
• Manufacturing these toys also requires expertise in the form of software developers, hardware engineers, data scientists, and child development specialists.
• This also applies to quality control; because of the advanced nature of these toys, stricter quality control procedures are required, which raises manufacturing costs.
• Additionally, security measures, software development, data security compliance costs, small production runs, and ongoing updates are other factors challenging the market growth.

Connected Toys Market Analysis

Application Insights

• The education category will dominate the market by contributing 55% revenue in 2024 due to the growing emphasis on STEM education globally.
• Government campaigns encouraging digital literacy and coding abilities, parental interest in educational toys, their incorporation into both formal and informal learning environments, and their potential to provide individualized educational opportunities are propelling their sales.
• The entertainment category is expected to witness a CAGR of 24% in 2025−2030 due to the increasing integration of AR and VR in toys.
• Moreover, the rising popularity of interactive storytelling and roleplaying toys, along with the increasing demand for social gaming experiences that connect multiple toys or players, is significantly influencing the market.
• Additionally, cross-platform integration, which allows toys to interact with popular entertainment media, and continuous innovation in gaming technologies are driving advancements in this sector.

The applications covered in the report include:

• Education (Largest Category)
• Entertainment (Fastest-Growing Category)
• Others

Age Group Insights

• The 6−8 years category will dominate the market by contributing 40% revenue in 2024 due to the strong focus of parents on the early STEM education of children in this age group.
• Parents are more willing to invest in educational toys for children at this stage.
• Furthermore, this age group can handle more advanced interfaces and game mechanics.
• The 9−12 years category is expected to witness a CAGR of 25% from 2025 to 2030 due to the increasing focus on project-based learning culture in schools, aligning with several connected toy concepts.
• Moreover, the market is being influenced by the increasing complexity and advancement of connected toys designed for this age group, a growing interest in advanced coding and robotics among pre-teens, a higher likelihood of owning or having access to smartphones, enhancing toy connectivity, and a rising enthusiasm for social and competitive gaming experiences within this demographic.

The following age groups are included in the report:

• 1−5 years
• 6−8 years (Largest Category)
• 9−12 years (Fastest-Growing Category)
• Teenagers

Technology Insights

• The Bluetooth category will dominate the market by contributing 60% revenue in 2024 due to the low energy consumption, which is crucial for battery-operated toys.
• Moreover, the ease of pairing with smartphones and tablets, sufficient data transfer range for most toy applications, and widespread adoption across various toy categories are expanding this category.
• The Wi-Fi category is expected to witness a CAGR of 23% from 2025 to 2030 due to the increasing demand for toys that can connect directly to the internet.
• Furthermore, advanced interactions and updates are made possible by higher data transmission rates, and whole-home connectivity is made possible by a longer range than Bluetooth.
• The market is also expanding as a result of the increasing integration with smart home ecosystems, support for cloud-based services and real-time multiplayer experiences, and rising energy and cost-efficiency of Wi-Fi modules.

The technologies covered in the report are:

• Wi-Fi (Fastest-Growing Category)
• Bluetooth (Largest Category)
• Others

Distribution Channel Insights

• The offline category will dominate the market by contributing 60% revenue in 2024 due to the traditional preference for in-person shopping for toys, as it allows parents and children to see and interact with products.
• Moreover, the strong presence of toy retailers and department stores with dedicated toy sections, immediate gratification of purchasing and owning the toy the same day, and opportunity for store staff to demonstrate and explain connected toy features is propelling this category.
• The online category is expected to witness a CAGR of 26% from 2025 to 2030 due to a wider selection of products available online compared to physical stores.
• Moreover, the growth of online marketplaces and direct-to-consumer sales by toy manufacturers is driving the market. The convenience of home delivery and easy product comparison further enhances this trend, along with the effective targeted marketing and personalized recommendations on online stores.

The following distribution channels are included in the report:

• Online (Faster-Growing Category)
• Offline (Larger Category)

Regional Analysis

• The North American region will hold the largest market share, of 40%, in 2024 due to the early adoption of new technology, the presence of major toy manufacturers and tech companies, and high disposable income in the U.S. and Canada.
• Moreover, growth is expected in the coming years as toddlers and preschoolers increasingly adopt these toys, driven by heightened product awareness through e-commerce platforms and digital media.
• The Asia-Pacific region is set to become the fastest-growing market, with a CAGR of 27%, in 2025−2030.
• This is because of the vast, youthful population in China and India, the increasing use of smartphones, the expanding middle class with its rising disposable incomes, and the growing emphasis on STEM education in many APAC nations.

The regions and countries analyzed in this report include:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest and Fastest-Growing Country Market)
  • U.K.
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia
  • South Africa
  • U.A.E. (Largest and Fastest-Growing Country Market)
  • Rest of MEA

Connected Toys Market Share

This market is fragmented in nature because of the presence of various key players, including Mattel Inc., The LEGO Group, Hasbro Inc., Sphero Inc., KONAMI, and Basic Fun Inc. Additionally, the market has regional variations and rapid technological changes.

Connected Toys Market News

• In June 2023, Hasbro Inc. announced a worldwide administration deal with Sony Music Publishing to support Hasbro’s entire portfolio of fan and family brands, including Peppa Pig, Transformers, and My Little Pony.
• In April 2023, Hasbro Inc. and Mattel Inc. entered into multi-year licensing agreements to create co-branded toys and games featuring some of their most popular brands.
• In May 2022, Mattel Inc. partnered with HBO Max and Cartoon Network to introduce their new American Girl featuring girl of the year, Corrinne Tan.