January 28, 2026
Loganimages/Depositphotos.com
Has The Toy Category Found A New Growth Gear?
Driven by pop culture relevance, licensed products, and increased engagement from teens and adults, the toy category delivered a bounce-back year in 2025, with global sales climbing 7%, according to Circana.
The gain was supported by a 3% increase in units sold, and a 3% lift in average selling prices.
The performance followed three consecutive years of declines, with toys seeing growth across the G12 — Australia, Belgium, Brazil, Canada, France, Germany, Italy, Mexico, Netherlands, Spain, the UK, and the U.S. — for the first time in Circana’s tracking history.
The category’s resurgence is linked to what Circana describes as the “Joy Factor,” or the convergence of “entertainment, collectability, and emotional engagement.” Among the toy category’s underlying drivers are affordability, nostalgia, pop culture connections and advanced interactivity — as well as their ability to entertain, drive social connections, and provide a break from screen time.
Frédérique Tutt, global toys industry advisor at Circana, said, “This positive performance marks a pivotal turning point for the industry, signaling that toys have reasserted their role as affordable entertainment and cultural touchpoints for consumers of all ages.”
Among the highlights for the year:
- Six of the 11 toy super categories experienced year-over-year dollar sales gains within the G12. Games and puzzles grew the fastest, up 30%, while building sets grew for the sixth consecutive year, up 18%.
- Licensed toy sales grew 15% and accounted for 37% of global toy sales, the highest level to date. Stronger global box office, video games, and increased streaming content drove the gains. The No. 1 toy property globally was again Pokémon, followed by Hot Wheels, Marvel Universe, Barbie, and Star Wars.
- Collectibles jumped 32% and now account for almost 19% of all dollar sales globally, supported by interest from children and adults.
One newer factor supporting growth is interest from “kidadults” or “kidults,” those consumers aged 12 and older purchasing toys, often for nostalgic reasons. Circana said the emerging older demographic “underscores toys’ expanding role beyond traditional play — as lifestyle, fandom, and self-expression products.”
Circana said that given the momentum across toy categories, 2026 is expected to mark the return to “long-term, sustainable growth” globally for the category. Tutt said, “The market will build on the strength of licenses, collaborations, year-round purchasing, and continued innovation and digitalization to deliver richer consumer experiences.”
Toy Growth Continues Despite US Tariffs
The gains in the U.S. were particularly encouraging as they came despite a hike in toy prices to offset U.S. tariffs.
Circana previously reported, by dollar sales, toys in the U.S. climbed 6% in the first half, led by strength in games and puzzles (+39%), and explorative toys (+19%), led by Pokémon and NFL trading cards. Licensed toy sales jumped 18% in the half, led by Pokémon, Final Fantasy, and Minecraft among video game properties; and the “Formula 1,” “Lilo & Stitch,” and “Sonic the Hedgehog” movie releases.
In reporting third-quarter results, both Mattel and Hasbro were upbeat about holiday selling, with officials indicating retailers were accelerating holiday orders significantly coming into the fourth quarter after waiting to assess tariff impacts.
“This quarter, our U.S. business was again challenged by industry-wide shifts in retailer ordering patterns,” Mattel’s CEO Ynon Kreiz told analysts. “That said, consumer demand for our products grew in every region, including in the U.S.”
Kreiz added that, “Since the beginning of the fourth quarter, orders from retailers in the U.S. have accelerated significantly.”
Mattel’s sales fell 7% in the third quarter as declines at Barbie and Fisher-Price offset strength at Hot Wheels and action figures, primarily drawn from the “Jurassic World,” Minecraft, and WWE franchises.
Hasbro’s revenue raised its financial guidance for the year after reporting third-quarter sales jumped 8% and indicating pricing actions were offsetting tariff costs. Strong sellers included “Peppa Pig” and Marvel franchise toys, as well as the Wizards of the Coast games. Chris Cocks, Hasbro’s CEO, similarly said orders picked up in the fourth quarter. He told analysts, “Everything kind of augurs towards continued robust kind of replenishment from our retailers.”
BrainTrust
Carlos Arámbula
Principal, Growth Genie Partners
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Scott Benedict
Founder & CEO, Benedict Enterprises LLC
Recent Discussions
Discussion Questions
Do you see the toy category returning to ‘long-term, sustainable growth,’ including in the U.S.?
Which current drivers of the toy category’s momentum will likely continue to support growth in the years ahead?
Poll
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Yes, there has been growth. But it has come from very specific pockets – mostly collectibles and toys aimed at adults. Sensible brands have leaned into this – Lego, for example, has a very solid strategy around kidults. And not to pour cold water on this, but inflation has also helped growth. Volumes are somewhat weaker.
Based on Circana’s data, the short answer is yes—the toy category does appear to be returning to long-term, sustainable growth, particularly since the rebound is being driven by an increase in units sold rather than pricing alone. That said, the findings should be viewed with some caution, as much of the growth is being fueled by Pokémon and other IP-driven collectibles rather than traditional children’s toys.
Inexpensive, IP-led collectibles are likely to continue gaining popularity among younger generations, or kidults, particularly as economic pressures persist and nostalgia for less turbulent political times remains a powerful motivator for inexpensive collectibles. However, this momentum does not appear to be evenly shared across the broader toy industry.
While traditional, child-focused toy manufacturers may not be experiencing the same level of sustained growth, IP-led and fandom-driven collectibles are well-positioned to continue growing steadily. As a result, it would be helpful for future studies to distinguish more clearly between traditional toys and collectibles, recognizing that while there is overlap, the underlying demand drivers and consumer behaviors differ.
I’m cautiously optimistic that the toy category can return to long-term, sustainable growth in the U.S., but it won’t be a straight line — and policymakers’ actions on trade and tariffs will matter more than many observers admit. The toy business remains inherently cyclical and tied to household discretionary spend, which means category growth will ebb and flow with macro confidence, seasonal rhythms, and how well retailers and suppliers innovate. The strong performances we’ve seen recently — driven by blockbuster entertainment tie-ins, collect-and-play-driven social trends, and renewed emphasis on experiential and interactive play — are real signals of relevance, but they don’t automatically guarantee unbroken expansion absent broader economic stability and predictable cost structures.
Several drivers of current momentum appear durable and should continue to support growth if effectively harnessed. First, entertainment-linked toys — whether tied to global franchises, gaming ecosystems, or digital fandom — tap into longstanding affinity behaviors and multi-platform engagement that transcend simple gift buying. Second, STEM-oriented and educational play has become more than a pandemic artifact; it now aligns with parental priorities around learning, screen balance, and skill development. Third, social shopping and community-driven trends — from collectible drops to online unboxings and community play — reinforce that toy purchases are often shared, social experiences as much as individual transactions. Combined with strong omnichannel execution (in-store discovery and digital convenience), these factors provide the category with a momentum blueprint that extends beyond mere nostalgia.
That said, trade and tariff policy create a real wildcard for the future. Toys are heavily imported, and tariff-induced cost increases have already raised retail prices in a category where value perception is critical. If tariffs remain at elevated levels—or escalate further without relief—the resulting price pressures could dampen both consumer willingness to buy and toy manufacturers’ ability to invest in innovation. That dynamic, coupled with broader discretionary spending elasticity, means the category’s sustainability depends in part on a stable, predictable trade environment that keeps input costs manageable. Without that, even the best product pipelines and trend drivers may be constrained by consumers’ price sensitivity.
In summary, the toy category has real, demand-driven tailwinds — cultural relevance, engagement-centric play, and experiential value — that are grounding its current momentum. But long-term, sustainable growth will only fully materialize if those drivers remain intact within an economic and policy context that doesn’t undermine price and accessibility. Cautious optimism feels like the right posture: the fundamentals are promising, but execution and external conditions — especially trade policy — will shape how much of that promise actually becomes performance.
The: Joy Factor”. Now, that makes sense in these times. Toys provide distraction and entertainment, and that is what we need, it seems, every day.
While the 7% growth headline is splashy, as a veteran of this industry, I have to ask: At what cost?
We are seeing a fundamental shift where ‘Kidults’ and high-priced collectibles are being used to mask a decline in the core child-play segment. If the industry’s growth is coming from IP-arbitrage and co-branding rather than original, innovative play, we aren’t finding a ‘new gear’—we’re just leaning on someone else’s engine.
Circana tracks the dollar, but it doesn’t track the Profitability Gap created by high licensing royalties and the struggling performance of legacy categories at giants like Hasbro and Mattel. We should be wary of celebrating ‘sustainable growth’ when the ‘Middle Class’ of toys—traditional, affordable play—is being hollowed out in favor of high-margin adult decor and digital gaming.
In high-growth regions like Southeast Asia, the ‘Joy Factor’ is being overshadowed by the ‘Platform Factor.’
Post-COVID Value Shift: We’ve moved away from high-value quality spending. Consumers are now hyper-focused on ‘intentional indulgence’—they want the brand name but at a ‘private label’ price point, forcing manufacturers to simplify designs just to stay on the shelf.
The Price Transparency Trap: Marketplace have effectively removed the ‘Premium’ from premium brands. When a customer can conduct a real-time price comparison in the aisle, the traditional retail margin evaporates.
Are we really finding a ‘new growth gear,’ or are we just seeing the industry’s volume be cannibalized by high-velocity, low-margin e-commerce platforms that prioritize the transaction over the brand’s long-term health?
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Yes, there has been growth. But it has come from very specific pockets – mostly collectibles and toys aimed at adults. Sensible brands have leaned into this – Lego, for example, has a very solid strategy around kidults. And not to pour cold water on this, but inflation has also helped growth. Volumes are somewhat weaker.
Based on Circana’s data, the short answer is yes—the toy category does appear to be returning to long-term, sustainable growth, particularly since the rebound is being driven by an increase in units sold rather than pricing alone. That said, the findings should be viewed with some caution, as much of the growth is being fueled by Pokémon and other IP-driven collectibles rather than traditional children’s toys.
Inexpensive, IP-led collectibles are likely to continue gaining popularity among younger generations, or kidults, particularly as economic pressures persist and nostalgia for less turbulent political times remains a powerful motivator for inexpensive collectibles. However, this momentum does not appear to be evenly shared across the broader toy industry.
While traditional, child-focused toy manufacturers may not be experiencing the same level of sustained growth, IP-led and fandom-driven collectibles are well-positioned to continue growing steadily. As a result, it would be helpful for future studies to distinguish more clearly between traditional toys and collectibles, recognizing that while there is overlap, the underlying demand drivers and consumer behaviors differ.
I’m cautiously optimistic that the toy category can return to long-term, sustainable growth in the U.S., but it won’t be a straight line — and policymakers’ actions on trade and tariffs will matter more than many observers admit. The toy business remains inherently cyclical and tied to household discretionary spend, which means category growth will ebb and flow with macro confidence, seasonal rhythms, and how well retailers and suppliers innovate. The strong performances we’ve seen recently — driven by blockbuster entertainment tie-ins, collect-and-play-driven social trends, and renewed emphasis on experiential and interactive play — are real signals of relevance, but they don’t automatically guarantee unbroken expansion absent broader economic stability and predictable cost structures.
Several drivers of current momentum appear durable and should continue to support growth if effectively harnessed. First, entertainment-linked toys — whether tied to global franchises, gaming ecosystems, or digital fandom — tap into longstanding affinity behaviors and multi-platform engagement that transcend simple gift buying. Second, STEM-oriented and educational play has become more than a pandemic artifact; it now aligns with parental priorities around learning, screen balance, and skill development. Third, social shopping and community-driven trends — from collectible drops to online unboxings and community play — reinforce that toy purchases are often shared, social experiences as much as individual transactions. Combined with strong omnichannel execution (in-store discovery and digital convenience), these factors provide the category with a momentum blueprint that extends beyond mere nostalgia.
That said, trade and tariff policy create a real wildcard for the future. Toys are heavily imported, and tariff-induced cost increases have already raised retail prices in a category where value perception is critical. If tariffs remain at elevated levels—or escalate further without relief—the resulting price pressures could dampen both consumer willingness to buy and toy manufacturers’ ability to invest in innovation. That dynamic, coupled with broader discretionary spending elasticity, means the category’s sustainability depends in part on a stable, predictable trade environment that keeps input costs manageable. Without that, even the best product pipelines and trend drivers may be constrained by consumers’ price sensitivity.
In summary, the toy category has real, demand-driven tailwinds — cultural relevance, engagement-centric play, and experiential value — that are grounding its current momentum. But long-term, sustainable growth will only fully materialize if those drivers remain intact within an economic and policy context that doesn’t undermine price and accessibility. Cautious optimism feels like the right posture: the fundamentals are promising, but execution and external conditions — especially trade policy — will shape how much of that promise actually becomes performance.
The: Joy Factor”. Now, that makes sense in these times. Toys provide distraction and entertainment, and that is what we need, it seems, every day.
While the 7% growth headline is splashy, as a veteran of this industry, I have to ask: At what cost?
We are seeing a fundamental shift where ‘Kidults’ and high-priced collectibles are being used to mask a decline in the core child-play segment. If the industry’s growth is coming from IP-arbitrage and co-branding rather than original, innovative play, we aren’t finding a ‘new gear’—we’re just leaning on someone else’s engine.
Circana tracks the dollar, but it doesn’t track the Profitability Gap created by high licensing royalties and the struggling performance of legacy categories at giants like Hasbro and Mattel. We should be wary of celebrating ‘sustainable growth’ when the ‘Middle Class’ of toys—traditional, affordable play—is being hollowed out in favor of high-margin adult decor and digital gaming.
In high-growth regions like Southeast Asia, the ‘Joy Factor’ is being overshadowed by the ‘Platform Factor.’
Post-COVID Value Shift: We’ve moved away from high-value quality spending. Consumers are now hyper-focused on ‘intentional indulgence’—they want the brand name but at a ‘private label’ price point, forcing manufacturers to simplify designs just to stay on the shelf.
The Price Transparency Trap: Marketplace have effectively removed the ‘Premium’ from premium brands. When a customer can conduct a real-time price comparison in the aisle, the traditional retail margin evaporates.
Are we really finding a ‘new growth gear,’ or are we just seeing the industry’s volume be cannibalized by high-velocity, low-margin e-commerce platforms that prioritize the transaction over the brand’s long-term health?