Connected Toys Market - Global Forecast 2025-2030

The Connected Toys Market size was estimated at USD 11.63 billion in 2024 and expected to reach USD 14.00 billion in 2025, at a CAGR 20.20% to reach USD 35.10 billion by 2030.

Connected play has evolved far beyond simple mechanical interactions, merging physical toys with digital ecosystems to redefine how children learn, create, and socialize. Modern IoT-enabled dolls, robots, and puzzles connect seamlessly to mobile apps and cloud platforms, offering personalized content updates and real-time performance tracking. This integration of hardware, software, and data analytics is driving unprecedented levels of engagement, shaping a future where toys adapt to individual developmental needs and preferences.

Increasingly, stakeholders across the toy industry are recognizing the profound implications of connectivity. Automation technologies such as AI-driven speech recognition empower toys to respond to voice commands, while augmented reality overlays bring story worlds to life in a child’s bedroom. Simultaneously, concerns about data privacy, cybersecurity, and screen time are prompting regulatory actions and parent-driven demands for transparent data practices. As a result, manufacturers are balancing innovation with stringent safety standards to earn consumer trust and comply with evolving global regulations.

Moreover, the convergence of educational priorities and interactive entertainment has fueled demand for STEM-focused play experiences that are both instructive and immersive. Coding robots, language learning companions, and physics-based puzzle games illustrate how connected toys are fostering critical thinking skills. In tandem, licensing partnerships with media franchises are expanding digital content libraries, sustaining ongoing engagement beyond initial purchase.

Together, these forces are accelerating the transformation of play into a data-driven experience, requiring companies to reimagine design, supply chain, and go-to-market strategies. This report delves into these dynamics, setting the stage for a detailed exploration of the shifts impacting the connected toys landscape in 2025.

The connected toys landscape is undergoing a metamorphosis driven by rapid advances in artificial intelligence, augmented reality, and voice-activated interfaces. AI-powered companions now adapt interactions based on a child’s emotional cues, enabling developmental support that evolves over time. Concurrently, AR enhancements project digital elements onto physical playsets, creating hybrid environments where imagination meets technology in unprecedented ways.

Furthermore, the integration of smart home ecosystems is reshaping product design priorities. Toys that connect via Wi-Fi and Bluetooth facilitate firmware updates and cloud-based content delivery, enhancing durability and relevance throughout a product’s lifecycle. The emergence of 5G and low-power wide-area networks promises even richer interactions, such as low-latency multiplayer experiences and advanced remote monitoring for parents.

At the same time, global sustainability imperatives are influencing materials and packaging. Eco-friendly plastics and energy-efficient electronics are becoming differentiators, as consumers seek responsible play options. Companies are responding by incorporating recyclable materials, modular components, and energy harvesting features that reduce battery waste.

Lastly, shifting consumer behaviors-accelerated by pandemic-era digital adoption-are driving a surge in online retail channels. Direct-to-consumer platforms and marketplace integrations enable personalized shopping experiences, while data analytics inform targeted product recommendations. Together, these transformative shifts are forging a new paradigm for connected toys, where technological innovation, environmental stewardship, and digital commerce converge.

Since January 1, 2025, enhanced U.S. trade barriers have exerted mounting pressure on the connected toys sector, provoking significant operational adjustments. Under the widened Section 301 tariffs and other levies-some reaching up to 145 percent-manufacturers have undertaken extensive cost-mitigation measures. Among these, leading brands have streamlined electronic features and simplified packaging to offset eroding profit margins.

With roughly 80 percent of U.S. toy imports originating from China, these duties have translated into higher price tags for consumers and reduced value propositions in electronic playthings. Companies like Basic Fun! and Popular Playthings have introduced battery-free options and reconfigured design elements, while MGA Entertainment has initiated a gradual shift of production to alternative low-cost regions. Retailers are curating assortments to prioritize high-demand, lower-cost items, anticipating holiday-season constraints.

The ripple effects extend to small and mid-sized enterprises, which face slimmer margins and challenged liquidity. Many have adopted lighter product assortments and renegotiated supplier contracts, yet confront the risk of diminished innovation as resources are diverted toward tariff compliance. In response, select exemptions under USTR exclusions offer temporary reprieves, but these are scheduled to lapse by August 31, 2025, leaving the sector braced for continued volatility.

Looking ahead, ongoing discussions within trade policy circles may yield further adjustments. However, in the near term, sustained tariff pressures are likely to incentivize continued supply-chain diversification, with stakeholders evaluating near-shoring options and pursuing lean manufacturing practices to preserve competitiveness.

The connected toys market encompasses a diverse array of product categories distinguished by their core functionalities and consumer applications. Dolls and action figures, including both interactive dolls and articulation-rich action figures, remain anchored by familiar play patterns enhanced through embedded sensors and app integrations. In parallel, educational toys span coding kits, language learning companions, and STEM-oriented activity sets, each leveraging connectivity to deliver evolving curricula and progress tracking.

Within the realm of digital companionship, electronic pets have emerged as engaging smart plush companions and fully digitized virtual pets, allowing children to nurture and play with lifelike behaviors through smartphone interfaces. Similarly, games and puzzles now fuse analog elements with augmented reality overlays and digital puzzle mechanics to stimulate cognitive growth. Robotic toys further expand the play frontier, constituting both companion robots that engage in conversational interactions and learning robots programmed to teach essential coding principles.

These offerings are distributed through various channel models that reflect shifting consumer shopping habits. Direct sales channels enable manufacturers to establish deeper customer relationships, while hypermarkets and supermarkets cater to impulse purchases within high-traffic retail environments. Online retail has proliferated into e-commerce platforms and manufacturer websites offering curated experiences and subscription-based content bundles, complemented by specialty stores that emphasize hands-on demonstrations.

Critical to product performance is the underlying connectivity suite, encompassing Bluetooth Low Energy and Classic Bluetooth for short-range interaction, Compact cellular technologies such as 4G and burgeoning 5G for anywhere-access play, NFC for tap-and-play digital content streams, and dual-band Wi-Fi modules operating on 2.4 GHz and 5 GHz frequencies to support high-bandwidth applications and firmware updates. Together, these segmentation insights illustrate the multifaceted nature of the connected toys ecosystem and the interdependent factors shaping market dynamics.

The Americas region sustains its leadership position in the connected toys market, driven by mature digital infrastructures and robust consumer spending patterns. In the United States and Canada, widespread smartphone penetration and high-speed broadband availability facilitate seamless integration of interactive toy experiences. Market participants capitalize on well-established e-commerce frameworks and omnichannel retail strategies to meet evolving consumer expectations, reinforcing the region’s status as the largest single contributor to global connected toy revenues.

Europe, the Middle East & Africa (EMEA) present a tapestry of regulatory environments and consumer preferences that underscore the importance of localization. Western Europe is characterized by stringent data protection mandates and a growing emphasis on eco-responsible play solutions, whereas emerging markets in the Middle East and Africa are aided by expanding mobile networks and rising disposable incomes. Strategic alliances with regional distributors and compliance with local toy safety standards are pivotal to securing market footholds.

The Asia-Pacific arena is witnessing the fastest expansion, propelled by rapid urbanization, surging middle-class demographics, and proactive technology adoption. China, Japan, South Korea, and India serve as critical growth engines, supported by accelerating public investments in digital infrastructure and STEM education initiatives. Manufacturers are forging partnerships with leading e-commerce platforms and leveraging regional manufacturing hubs to optimize logistics and respond swiftly to market trends, cementing Asia-Pacific’s trajectory as the sector’s highest-growth geography.

Leading industry players are navigating an intricate landscape of technological innovation, supply-chain realignment, and evolving consumer expectations. Hasbro has prioritized cost containment through operational efficiencies and selective feature reductions in electronic toys, while concurrently repositioning production away from constrained regions to mitigate tariff exposure. The company’s ambitious savings target underscores its commitment to preserve profitability amid elevated import duties.

Mattel is forging a transformative alliance with OpenAI to imbue flagship brands such as Barbie and Uno with artificial intelligence capabilities. This collaboration aims to deliver age-appropriate, privacy-centric AI-enhanced playsets and companion applications, reflecting a strategic pivot toward digital ecosystems and franchise ecosystems that extend beyond physical product sales.

VTech has leveraged its global manufacturing footprint to absorb rising tariff costs, accelerating the relocation of U.S.-bound production to facilities in Malaysia, Mexico, and Germany. This vertically integrated model, coupled with respected electronic learning brands like LeapFrog, has underpinned VTech’s resilience. Despite headwinds in key regions, the company sustained revenue growth by diversifying product lines and reinforcing its leadership in educational connectivity platforms.

Spin Master continues to integrate entertainment, digital games, and traditional play, reinforcing synergies between its award-winning brands, multimedia content, and emerging technologies. Through strategic investments in digital gaming platforms and cross-media storytelling, the company aims to capture new demographic segments while enriching play experiences across its global distribution network.

To thrive in the rapidly evolving connected toys domain, industry leaders should accelerate diversified manufacturing footprints by expanding near-shore and allied-region capacities, thereby buffering against tariff fluctuations and logistical disruptions. Early engagement with tariff exemption processes and participation in policy dialogues can further alleviate regulatory burdens.

Investment in modular product architectures will enable cost-effective feature customization and iterative updates via over-the-air firmware, prolonging product lifecycles and fostering ongoing consumer engagement. Moreover, forging partnerships with telecommunication providers and cloud service platforms can unlock new revenue streams through subscription-based content and advanced multiplayer experiences.

Strengthening cybersecurity and data privacy frameworks is imperative as regulators and consumers demand transparent handling of personal information. Companies should adopt privacy-by-design principles and secure development lifecycles, validated by independent audits and certifications, to build trust and differentiate their brands.

Finally, embedding AI-driven analytics within toy ecosystems can facilitate personalized learning journeys, while sustainability-oriented materials innovation will resonate with environmentally conscious families. Cultivating these strategic priorities will position organizations to harness technological advances and navigate the sector’s dynamic regulatory, economic, and consumer landscapes.

This research initiative combined comprehensive secondary analysis with targeted primary investigations to deliver actionable insights. An extensive review of global trade databases, tariff schedules, and policy statements informed the assessment of fiscal and regulatory impacts on connected toy imports. Market segmentation and competitive dynamics were elucidated through proprietary datasets and publicly available corporate disclosures.

Primary research entailed structured interviews with supply-chain executives, product designers, and governmental trade specialists to validate secondary findings and capture nuanced operational perspectives. In parallel, consumer sentiment was gauged via surveys and focus groups across key regions to understand adoption drivers and pain points related to connected play.

Data triangulation techniques ensured robustness, cross-referencing manufacturer financial reports, retail channel performance metrics, and telecommunications infrastructure roll-out statistics. Technological trend mapping leveraged white-paper analyses and expert roundtables to forecast connectivity advancements and their implications for product roadmaps.

This mixed-method approach ensures that the findings reflect an accurate synthesis of market realities and expert judgment, equipping industry stakeholders with a reliable foundation for strategic decision-making.

The connected toys segment sits at the nexus of technology, education, and entertainment, offering compelling opportunities for companies willing to embrace digital innovation and operational agility. As AI, AR, and advanced connectivity reshape play paradigms, stakeholders must adapt product designs, supply chains, and go-to-market models to remain competitive.

Heightened tariff pressures underscore the necessity of diversified manufacturing strategies and proactive engagement in trade policy dialogues. Concurrently, the imperative to safeguard data privacy and security has never been more acute, obligating manufacturers to integrate robust compliance measures into every stage of product development.

Regional nuances-from the established consumer bases of the Americas to the burgeoning digital adoption in Asia-Pacific-underscore the value of localized approaches and strategic partnerships. Harnessing these insights will enable companies to tailor offerings and distribution models to distinct market conditions.

Ultimately, the ability to fuse technological prowess with sustainable practices, informed by rigorous market intelligence, will distinguish industry leaders. Organizations that successfully navigate these multifaceted dynamics stand to capture significant growth potential and redefine play experiences for a tech-savvy generation.

Elevate your strategic advantage in the dynamic world of connected toys by acquiring our comprehensive market research report. Gain in-depth insights into evolving consumer behaviors, tariff impacts, cutting-edge technologies, and regional growth drivers that will inform your next move. Reach out today to Ketan Rohom (Associate Director, Sales & Marketing at 360iResearch) to secure this essential resource and empower your organization with the clarity needed to navigate 2025 and beyond.