Connected Toys: Transforming Playtime in the Digital Age
In today's digital era, technology has permeated every
aspect of our lives, including the realm of play. Connected toys have emerged
as a fascinating intersection between traditional toys and modern technology,
offering children an immersive and interactive play experience. These toys,
equipped with sensors, connectivity features, and interactive capabilities,
have the potential to enhance learning, creativity, and social development.
This essay explores the impact of connected toys on children and their
playtime, highlighting the top factors that influence their adoption.
Additionally, we will touch upon relevant government policies that shape the
landscape of connected toys.
Impact of Connected
Toys on Playtime
Connected toys have revolutionized playtime, presenting
children with new opportunities and experiences. Here are some key impacts:
- Enhanced Interactivity: Connected toys enable children to
engage in immersive play experiences, interacting with the toy itself, other
children, or even remote players. This heightened interactivity fosters
engagement, imagination, and problem-solving skills.
- Educational Value: Many connected toys are designed to be
educational, incorporating interactive learning elements. These toys can
facilitate the development of cognitive skills, such as problem-solving,
critical thinking, and creativity, making learning more enjoyable and
effective.
- Personalized Experiences: Through advanced technologies like
artificial intelligence (AI) and machine learning, connected toys can adapt to
individual preferences and provide personalized experiences. This customization
enhances engagement and tailors learning to the specific needs of each child.
- Collaborative Play: Connected toys can facilitate
collaborative play experiences, encouraging children to interact, cooperate,
and communicate with their peers. This social aspect promotes teamwork,
empathy, and communication skills, contributing to their overall social
development.
Top Factors
Influencing Adoption of Connected Toys
Several factors influence the adoption of connected toys
among children and parents alike. The following factors are particularly
impactful:
- Safety and Privacy: As connected toys collect and transmit
data, ensuring the safety and privacy of children is paramount. Parents and
guardians are concerned about potential security breaches, data misuse, and
unauthorized access to personal information. Toy manufacturers must prioritize
robust security measures and transparent privacy policies to address these
concerns.
- Educational Value: Parents are increasingly seeking toys
that offer educational value to their children. Connected toys that promote
learning and skill development are more likely to be adopted, as they align
with parents' aspirations for their children's growth and development.
- User-Friendly Interface: Intuitive and user-friendly
interfaces are crucial for connected toys. Children, especially younger ones,
need toys that are easy to operate and understand. Manufacturers should focus
on designing toys with clear instructions and accessible controls to enhance
the overall user experience.
- Cost and Affordability: The cost of connected toys can be a
determining factor in their adoption. Parents evaluate the cost-benefit ratio
and consider the long-term value of the toy. Manufacturers need to strike a
balance between affordability and quality to make connected toys accessible to
a broader demographic.
Government Policies
and Regulation
Governments around the world are becoming increasingly aware
of the impact of connected toys on children's privacy, security, and
well-being. As a result, various policies and regulations have been implemented
to address these concerns. Here are some key areas of government involvement:
- Privacy and Data Protection: Governments have introduced or
strengthened regulations to safeguard children's privacy and protect their
personal data. These regulations often require toy manufacturers to adhere to
strict data protection practices, obtain consent from parents or guardians, and
provide clear information regarding data collection and usage.
- Safety Standards: Governments have established safety standards
to ensure that connected toys meet specific quality and safety requirements.
These standards encompass aspects such as electrical safety, material
composition, and age appropriateness.
- Advertising and Marketing: Governments regulate the
advertising and marketing practices surrounding connected toys to protect
children from misleading or harmful content. These regulations often aim to
ensure that advertising accurately represents the toy's features and benefits
without exploiting children's vulnerability.
- Cybersecurity and Vulnerability Mitigation: Governments work
to enhance cybersecurity measures in connected toys, preventing potential
hacking or unauthorized access. They encourage manufacturers to incorporate
robust security features and regularly update software to address
vulnerabilities and protect children from online threats.
Dynamics of Connected Toys Market
Drivers in Connected
Toys Market
Shift toward two-working-parent households giving rise to
the need for monitoring and tracking toy devices has become a significant
driving force in today's interconnected world of IoT. Our smartphones provide
us with unrestricted access to various aspects of our lives, from banking and
GPS to social media and online shopping. However, technology has extended its
reach beyond screens and into our homes, cars, and even our children's toys.
With the changing dynamics of working culture, where more heterosexual couples
adopt two-working-parent households, the time spent between parents and
children has considerably reduced. In such a scenario, connected toys serve as
multipurpose gadgets that parents can program for learning exercises and as
event trackers to ensure their children's safety. Take, for example, CogniToys'
Dino, which utilizes Wi-Fi connectivity and IBM Watson's natural language
processing technology to provide tailored responses based on the child's age
group and skill level. As parents always strive to find products that assist in
their children's intellectual development, the demand for connected toys is
expected to increase over the forecast period.
The adoption of connected toys in enhancing children's
skills, particularly in the STEM (Science, Technology, Engineering, and Math)
field, is another significant driver for the connected toys market. These toys
are being used to cultivate professional skills like coding and engineering.
Wonder Workshop's Dot Creativity Kit, for instance, offers a trio of
interactive robots that encourage children to explore coding. Connected toys
like Dash (for 6+-year-olds) and Cue (for 11+ years old) also contribute to this
trend.
Restraints in
Connected Toys Market
However, the rise of connected toys has raised concerns
regarding privacy. Many children's toys now come with internet connectivity as
a key feature. While the connection can be made through cables or apps on smartphones
and tablets, these toys often have functionalities such as cameras and
microphones that can gather and handle personal data. Since they are used by
individuals of various ages, including very young children who may not be
supervised by adults, ensuring transparency and addressing privacy concerns
becomes challenging. Connected toys have the ability to listen and engage in
conversations, which, while providing valuable benefits to parents and
children, also pose security risks. Regulations play a critical role in
ensuring the safety of these vulnerable customers and mitigating potential
risks. Additionally, the outbreak of COVID-19 has disrupted the supply chain,
leading to variations in supply and demand for connected toys.
Opportunities in
Connected Toys Market
Increase in research and development investment in robotics
and toys
Programmable robots offer students a valuable opportunity to
acquire a wide range of skills, such as designing and constructing robots,
programming, and gaining a comprehensive understanding of robotics concepts and
principles. Robotics encompasses various disciplines, including computer
programming, engineering, mathematics, physics, and other branches of science.
Numerous institutions and organizations are conducting research on the
application of robotics in diverse fields such as manufacturing, healthcare,
agriculture, aerospace and defense, security, and entertainment. Additionally,
there are several reputable vendors offering advanced hardware and software
toolkits for connected toys. These connected toys provide a heightened level of
interactivity and engagement compared to traditional toys. They can respond to
voice commands, gestures, or touch, creating a more immersive play experience
for children. Connected toys have the potential to enhance learning and skill
development by incorporating educational content, interactive games, and
quizzes. Through these toys, children can improve their cognitive abilities,
problem-solving skills, and knowledge in various subjects. Furthermore,
connected toys can personalize the play experience based on individual
preferences and abilities, adapting to a child's progress, offering customized
content, and providing tailored recommendations. This promotes personalized
learning and increased engagement. Additionally, connected toys facilitate
social interaction and connectivity among children. They enable multiplayer
games, communication with friends and family members, and even connect children
from different locations, fostering socialization and collaboration. The data
generated by connected toys regarding children's play patterns, preferences,
and interactions can offer valuable insights to toy manufacturers. This data
can help in product improvement, understanding consumer behavior, and
developing targeted marketing strategies.
Challenge in
Connected Toys Market
Adverse effects on children's cognitive development
Research indicates that the decline of unstructured play
over time can lead to developmental deficiencies in problem-solving,
flexibility, and coping abilities among adults who were not encouraged to
engage in self-initiated play during their childhood. These characteristics are
crucial for success in later life; however, smart toys may not necessarily
promote their development. Excessive screen usage among children has been found
to negatively impact their physical and mental health. Brain scans from a study
revealed that children who spent significant time on screens showed less growth
in areas associated with cognition and language compared to those who
prioritized reading books. Preferring tablets or smartphones over books could
hinder a child's development. Connected toys often collect and store personal
data, including children's interactions and behaviors. Safeguarding the privacy
and security of this data poses a significant challenge. Insufficient data
protection measures can result in unauthorized access, data breaches, or misuse
of personal information. To ensure children's privacy, stricter regulations and
robust security protocols are necessary. Connected toys that enable
communication or interaction with other users also carry risks related to
online safety. There is a concern about children's exposure to inappropriate
content, cyberbullying, or interactions with strangers. Implementing effective
parental controls, content filtering, and age-appropriate safeguards can help
mitigate these risks. It is crucial to design connected toys considering the
child's age and developmental stage. Ensuring that the content, features, and
interactions are appropriate for the intended audience is of utmost importance.
Inaccurate age targeting or insufficient content filtering may expose children
to unsuitable material or experiences. The rapid advancement of technology can
render connected toys obsolete. If the supporting software or infrastructure
becomes outdated or unsupported, the toy may become unusable or its
functionality compromised. Toy manufacturers should consider future-proofing
their products by providing updates or compatibility measures to extend the
lifespan of connected toys. The use of children's data, advertising targeting,
and the impact of technology on play and socialization raise ethical concerns
regarding connected toys. Striking a balance between commercial interests and
child well-being requires careful ethical considerations and adherence to
responsible practices.
Ecosystem of Connected Toys Market
During the forecast period, the offline segment is projected
to maintain its position as the largest market share holder in terms of
distribution channels for connected toys. The offline distribution channel
provides various avenues for vendors to connect with their consumers. One
common approach for connected toy providers to engage with local distributors
and retailers is through participation in trade shows. Establishing effective
partnerships and understanding the preferences of local distributors and
retailers are essential for successful market entry, which may be challenging
to achieve solely through online channels. Department stores cater to a wide
range of customers and offer a diverse selection of both domestic and
international toy brands for consignment.
On the other hand, the online stores segment is expected to
capture a significant market share. This can be attributed to the increasing
consumer preference for online toy and game shopping from the convenience of
their homes. Additionally, the availability of discounted toy products and
subscription box services provided by online retailers will further boost the
revenues of the online stores segment.
In terms of target age groups, the 5-12 years segment is
projected to hold a major market share. School students within this age range
exhibit significant demand for educational and puzzle toys, as they contribute
to their creativity and cognitive development. Moreover, teenagers' growing
interest in sports and recreation-focused smart toys, including
remote-controlled drones, helicopters, cars, and others, is expected to drive
the growth of this segment.
Moving on to the interfacing device, the smartphone segment
is anticipated to dominate the market during the forecast period. The
integration of connected toys with smartphones has greatly contributed to their
rising popularity. These toys leverage the capabilities of smartphones to offer
enhanced play experiences. By connecting to smartphones, they can unlock
interactive features, educational content, and multiplayer capabilities.
Children can control and personalize their toys using smartphone apps, expanding
the realm of creativity and engagement. This seamless integration opens up a
world of imaginative play, learning opportunities, and digital connectivity,
making connected toys an appealing choice for tech-savvy children and their
parents.
Furthermore, the Wi-Fi segment is expected to hold a
significant market share throughout the forecast period. Connected toys with
Wi-Fi connectivity have transformed the playtime experience. By leveraging
Wi-Fi technology, these toys can connect to the internet, providing access to a
wide range of interactive features. Children can enjoy online content, engage
in multiplayer games, and even communicate with friends and family members.
Wi-Fi connectivity enables connected toys to remain updated with the latest
content, ensuring a dynamic and ever-evolving play experience. With seamless
integration to the internet, these toys offer limitless possibilities for fun,
learning, and exploration, captivating children's imaginations and keeping them
engaged for extended periods of time.
Regional Insights
North America is poised to dominate the market share during
the forecast period, demonstrating substantial growth in the adoption of
connected toys. This upward trajectory is expected to continue until 2027. The
region benefits from the presence of key players such as Sphero, Mattel, and
Hasbro, as well as numerous startups that are actively offering advanced
connected toys to cater to customer demands. Notably, collaborations between
solution vendors and startups, universities, and schools are further propelling
the growth of the connected toys market in North America.
On the other hand, Asia boasts a thriving digital
entertainment industry encompassing gaming, animation, and digital media. The
integration of connected toys with popular characters, franchises, or gaming
platforms has garnered immense appeal among children, capitalizing on the
region's enthusiasm for digital entertainment. Countries like China, South
Korea, and Japan have been at the forefront of technological innovation and
entrepreneurial endeavors. In these nations, both startups and established toy
manufacturers have developed an extensive array of connected toys, harnessing
cutting-edge technologies like artificial intelligence, augmented reality, and
the Internet of Things (IoT) to create engaging and interactive play
experiences.
Dominating Companies in Connected Toys Market
- MATTEL
- HASBRO
- LEGO
- SONY CORPORATION
- VTECH
- UBTECH
- DJI
- IROBOT
- IROBOT: PRODUCT LAUNCHES
- SPHERO
- DIGITAL DREAM LABS
- PILLAR
- WONDER WORKSHOP
- TOSY ROBOTICS
- WORKINMAN INTERACTIVE
- WOWWEE
- KEYI TECH
- MIKO
- MAKEBLOCK
- SMART TEDDY
- INTELINO
- FISCHERTECHNIK
- POTENSIC
- MAINBOT
- ROYBI
- PLAYSHIFU
- BANDAI NAMCO Entertainment
- Basic Fun Inc.
- Konami Holdings Corporation
- PLAYMOBIL
Recent Developments in Connected Toys Market
- Hasbro and eOne: In December 2019, Hasbro, a leading global
toy and game company, completed its acquisition of Entertainment One (eOne), a
multinational entertainment company. This strategic move aimed to expand
Hasbro's capabilities in content development and entertainment-driven
storytelling. eOne's expertise in film and television production, including
popular franchises like Peppa Pig and PJ Masks, complemented Hasbro's portfolio
of brands, including Transformers, My Little Pony, and Monopoly. The merger
allowed Hasbro to further leverage its connected toy offerings by integrating
them with eOne's engaging content.
- Mattel and NetEase: In September 2020, Mattel, a renowned
toy manufacturer, announced a partnership with NetEase, a leading internet technology
company in China. The collaboration aimed to develop and publish new digital
gaming experiences and innovative learning solutions for children in China. By
combining Mattel's extensive brand portfolio, including Barbie, Hot Wheels, and
Fisher-Price, with NetEase's technological expertise and online gaming
platforms, the partnership sought to create immersive and interactive digital
experiences that integrate with connected toys.
- LEGO and Tencent: In January 2020, LEGO, the iconic Danish
toy company, partnered with Tencent, a multinational conglomerate known for its
digital services and social media platforms. This collaboration aimed to create
a safe and child-friendly digital environment for Chinese children through
Tencent's digital platforms, including QQ and WeChat. The partnership aimed to
develop online games, digital content, and educational experiences that combine
LEGO's physical play with Tencent's digital capabilities, enhancing the overall
play experience for children.
- Sphero and LittleBits: In August 2019, Sphero, a robotics
and educational toy company, acquired LittleBits, a company specializing in
modular electronics and STEAM (Science, Technology, Engineering, Arts, and
Mathematics) learning. The acquisition brought together two leading companies
in the educational toy space, leveraging their expertise in robotics, coding,
and electronics. The combined entity aimed to offer a broader range of
innovative products and resources to inspire and engage children in hands-on,
creative learning experiences using connected toys.
- Spin Master and Toca Boca: In May 2021, Spin Master, a
global toy and entertainment company, announced its acquisition of Toca Boca, a
leading digital play studio focused on creating digital toys and games for
children. Toca Boca's expertise in digital play and Spin Master's extensive
portfolio of physical toys and entertainment properties, such as PAW Patrol and
Hatchimals, aimed to enhance the integration of physical and digital play
experiences. The partnership sought to deliver immersive and interactive play
experiences through connected toys and digital platforms.
- Spin Master and Rubik's Brand Ltd: In October 2020, Spin
Master announced its acquisition of Rubik's Brand Ltd, the iconic puzzle toy
company known for the Rubik's Cube. The acquisition aimed to combine Spin
Master's global marketing and distribution network with Rubik's Brand's
innovative product portfolio. This partnership enabled Spin Master to expand
its presence in the puzzle and games category and leverage the enduring
popularity of Rubik's Cube to create new connected toy experiences.
- Hasbro and Entertainment One (eOne) Acquisition by Mattel:
In December 2021, Mattel completed its acquisition of eOne, the same company
that Hasbro acquired in 2019. This acquisition by Mattel aimed to strengthen
its content creation and entertainment capabilities, as eOne owns valuable
franchises such as Peppa Pig and PJ Masks. The integration of eOne's content and
Mattel's portfolio of brands like Barbie and Hot Wheels could lead to the
development of innovative connected toy experiences and engaging storytelling
for children.
- VTech and LeapFrog Enterprises: In August 2021, VTech, a
global supplier of electronic learning products, completed its acquisition of
LeapFrog Enterprises, a leading educational toy company. The merger aimed to
combine the strengths of both companies in the development of interactive and
educational toys for children. By leveraging LeapFrog's expertise in early
childhood development and VTech's technological capabilities, the partnership
aimed to offer enhanced connected toy experiences that foster learning and
skill development.
- Sony Interactive Entertainment and BANDAI NAMCO
Entertainment: In May 2022, Sony Interactive Entertainment (SIE) and BANDAI
NAMCO Entertainment announced a partnership to jointly develop and publish new
IP (Intellectual Property) for the PlayStation platform. While this
collaboration is not specific to connected toys, it highlights the ongoing
efforts to create engaging gaming experiences that could extend to connected
toy integration in the future. By combining the strengths of both companies,
the partnership aimed to deliver innovative gaming content to a global audience.
- Anki assets acquisition by Digital Dream Labs: In 2019,
Anki, the robotics and artificial intelligence toy company, went bankrupt and
ceased operations. However, in 2020, Digital Dream Labs acquired the assets of
Anki, including its popular product lines like Cozmo and Vector. Digital Dream
Labs aimed to revive and support the existing Anki products while also
exploring new possibilities for connected toy development. This acquisition
provided a new lease of life for Anki's innovative robotics toys and offered
opportunities for further advancements in the field.
Connected toys have emerged as a powerful and transformative force in the world of play. By providing enhanced interactivity, educational value, personalized experiences, and opportunities for collaboration, these toys have the potential to enrich children's playtime and foster their overall development. However, the adoption of connected toys depends on factors such as safety, educational value, user-friendliness, and affordability. Governments also play a vital role in ensuring the privacy, security, and well-being of children through policies and regulations. As technology continues to advance, it is crucial for stakeholders, including manufacturers, parents, and policymakers, to collaborate in creating an environment where connected toys can bring joy and learning to children while safeguarding their interests.
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