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High tech has officially arrived in Toyland – and with it the end of physical toys dominating holiday wish lists.
Toys are big business, with approximately 3 billion sold every year, generating around $41 billion in sales. With shopping going largely digital, it’s no surprise that many toys are following suit. As children’s play evolves, experts say that AI-powered toys are becoming increasingly popular, although beloved classics continue to hold strong.
“The presence of AI is infiltrating the toy department and growing rapidly,” James Zahn, editor in chief of The Toy Book, a trade publication covering the toy industry, told Quartz.
Zahn believes 2024 will be a year where high-tech excitement meets nostalgic appeal. As innovations emerge, consumer behaviors shift and pop culture continues to influence, the toy industry will highlight the new ways kids play –and what they’ll be looking for under the Christmas tree.
AI-powered toys like Poe the AI Story Bear from Skyrocket are at the forefront of this trend. Launched in August, Poe combines technology with creativity, allowing kids to co-create stories and build their own adventures, Bobby Meixner, senior director of industry solutions at software development platform UserTesting, told Quartz in an interview. “The toy doesn’t have to just sit on a shelf.”
“Kids aren’t just playing with these toys, they’re collaborating with them,” Meixner said. Powered by four AA batteries, Poe can generate new stories via bluetooth and even replay saved stories when children squeeze its ears. Similarly, augmented reality (AR) toys, such as Hasbro’s (HAS-0.43%) Twister Air Party Game, also combine physical activity with digital interaction.
But it’s not all about cutting-edge gadgets. Zahn also highlighted the importance of balancing high-tech innovation with nostalgia, a trend defining the current toy market. While the days of long lines for Tickle Me Elmo are behind us, character-based toys like Mattel’s (MAT+0.19%) Barbie – recently reimagined to capitalize on the success of Wicked – remain a strong presence. Likewise, Hot-wheels and LEGO continue to see significant demand, particularly with items tied to franchises like Harry Potter.
“Pop culture is shaping the toy aisle like never before,” says Meixner of UserTesting. According to data the platform collected, the leading brands poised to top the list of toys for 2024 include LEGO and Mattel, alongside AI-powered toys and gaming consoles Playstation (SONY+3.86%), Xbox (MSFT+2.86%), and Nintendo (NTDOY+5.19%).
As for the must-have toy for 2024, Zahn says its unlikely there will be a single item in the way we’ve seen in past years.
“The days of the singular, gotta-have-it toy that every kid in America absolutely has to have are over,” Zahn explains.
Instead, the market is diversifying, and sustainability and inclusivity are increasingly important factors for parents. With inflation putting pressure on budgets, many millennial parents are seeking toys that are eco-friendly, fun, and gender-neutral – further reflecting evolving consumer priorities.
Toys made with these values in mind are likely to win over parents, but some experts, like Chuck Knerr, founder of toy manufacturer Spud N’ Rich LLC, stress that the real innovation lies in toys that kids want to play with it everyday.
“A truly innovative toy is one that keeps kids engaged without being mindlessly distracting, as many tech toys tend to be,” Knerr says.
The bottom line: More choices and greater innovation are coming to America’s toy shelves in 2024. Whether fueled by high-tech gadgets or the appeal of nostalgic favorites, toys are more personalized and interactive than ever before. With industry giants like Mattel, Hasbro, and LEGO leading the charge, it’s clear that while trends may come and go, the magic of play remains timeless.