Smart Toys Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Technology Type (App-Enabled Toys, Voice/Image Recognition Toys, and Other (Screen Less Toys, etc.)), By Age Group (Up to Age of 5, Age of 5 to Age of 10, Age of 10 to Age of 15), By Distribution Channel (Online, Toy Shops, Hypermarkets & Supermarkets, Non-Retail Sales), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 24.32 Billion
CAGR (2026-2031)	13.45%
Fastest Growing Segment	Online
Largest Market	Europe
Market Size (2031)	USD 51.85 Billion

Market Overview

The Global Smart Toys Market will grow from USD 24.32 Billion in 2025 to USD 51.85 Billion by 2031 at a 13.45% CAGR. The Global Smart Toys Market comprises playthings embedded with advanced electronics, such as artificial intelligence, microprocessors, and wireless connectivity, which enable interactive, adaptive, and programmable gameplay. The primary drivers supporting this sector’s growth include a heightening parental emphasis on STEAM education and the desire to harmonize physical activity with digital literacy. These intelligent devices serve as vital educational tools that introduce children to concepts like coding and robotics, distinguishing them from traditional static toys and fostering cognitive development through responsive interaction.

However, market expansion faces a notable impediment regarding data privacy and cybersecurity vulnerabilities, as internet-connected devices can be susceptible to breaches that compromise children's personal information. Despite these concerns, the appetite for educational technology remains robust. According to The Toy Association, in 2025, 60% of parents are seeking toys that build STEAM skills, such as coding, reflecting a sustained consumer demand for high-tech learning solutions that continues to propel the industry forward despite regulatory and safety hurdles.

Key Market Drivers

The integration of Artificial Intelligence and IoT technologies is fundamentally reshaping the market by enabling toys to function as adaptive, intelligent learning companions. These smart devices utilize advanced sensors and cloud connectivity to personalize interactions, allowing playthings to evolve alongside a child’s cognitive abilities. This technological convergence has spurred significant growth in the electronic learning sector, as parents increasingly value devices that offer responsive educational content. According to VTech, May 2025, in the 'FY2025 Annual Results', revenue for Electronic Learning Products in North America increased by 7.0% during the fiscal year, highlighting the robust consumer appetite for connected educational tools. Furthermore, the broader industry shift toward digital-physical hybrid play is evident in the performance of major competitors pivoting to connected ecosystems. According to Hasbro, February 2025, in the 'Fourth Quarter and Full Year 2024 Financial Results', revenue from the Digital and Licensed Gaming segment increased by 22% for the full year 2024, underscoring the increasing value of digitally integrated play experiences within the wider market.

The rising global demand for STEM and STEAM educational toys serves as a second critical driver, as parents increasingly prioritize play options that foster critical thinking, engineering skills, and scientific literacy. This trend pushes manufacturers to design complex building sets and programmable robotics that make abstract concepts tangible and engaging for young minds. Consequently, brands that focus on constructive and logic-based play are outperforming the broader market, which has faced some volatility. According to The LEGO Group, March 2025, in the 'Annual Results 2024', global consumer sales increased by 12% in 2024, driven largely by sustained momentum in their varied construction portfolio. This performance illustrates how the desire for skill-building play experiences continues to insulate the high-quality segment of the toy market, driving expansion even as traditional categories face saturation.

Download Free Sample Report

Key Market Challenges

Data privacy and cybersecurity vulnerabilities constitute a significant impediment to the expansion of the Global Smart Toys Market. As manufacturers increasingly integrate microphones, cameras, and Wi-Fi connectivity into playthings, these devices accumulate vast amounts of sensitive data, including voice recordings, real-time location logs, and biometric information. This extensive data collection creates a broad attack surface for cybercriminals, raising the prospect of identity theft or unauthorized surveillance of minors. Such risks fundamentally erode consumer trust, causing potential buyers to view these intelligent products as liabilities rather than educational assets, thereby stalling broader market adoption.

The issue is further exacerbated by the influx of unregulated, counterfeit devices that frequently bypass critical digital security protocols. According to The Toy Association, in 2025, nearly 90% of parents reported concern regarding the safety of knockoff toys. This prevalent anxiety regarding the integrity of available products forces caregivers to exercise extreme caution, often resulting in purchase abandonment due to fears that a device may not be digitally secure. Consequently, the industry struggles to convince a wary consumer base that these high-tech toys can guarantee the protection of their children's personal information.

Key Market Trends

The adoption of Sustainable and Eco-Friendly Smart Materials is becoming a decisive market force as manufacturers face intensifying pressure to reduce the environmental footprint of electronic playthings. Unlike traditional toy manufacturing, the smart toy sector battles the dual challenge of plastic waste and electronic components, prompting a strategic shift toward bio-based polymers and responsibly sourced casings for high-tech devices. This material innovation is not merely a compliance measure but a core value proposition that appeals to environmentally conscious families, influencing purchasing decisions alongside digital features. Leading companies are aggressively re-engineering their supply chains to meet these new standards, setting benchmarks for the entire industry. According to The LEGO Group, March 2025, in the 'Annual Results 2024', the company reported that 33% of the resin used in its bricks during 2024 came from renewable sources, nearly tripling the amount from the previous year, signaling a rapid transition toward sustainable inputs across the global market.

The Implementation of Emotional Intelligence and Social-Emotional Learning (SEL) Capabilities is simultaneously redefining value propositions by moving beyond academic education to address mental well-being and empathy. While early smart toys focused primarily on cognitive skills like coding or math, the current generation of devices utilizes sophisticated algorithms to function as supportive companions that can recognize and respond to a child's emotional state. This evolution addresses the growing parental concern for children's social development and anxiety management, creating a new category of "empathetic" technology designed to foster resilience and interpersonal skills through natural conversation and non-verbal cues. The commercial viability of this segment is evident in its explosive trajectory within major economies. According to China Daily, December 2025, in the 'AI toys offer emotional support to consumers' article, the domestic AI toy market reached a valuation of 24.6 billion yuan in 2024, driven largely by a surge in demand for devices offering companionship and emotional interaction.

Segmental Insights

The Online distribution channel is positioned as the fastest growing segment in the Global Smart Toys Market. This expansion is primarily driven by increasing consumer reliance on e-commerce platforms that offer detailed technical specifications and customer reviews, which are essential for evaluating interactive functionalities. The convenience of home delivery and the ability to compare prices across various retailers further encourage this shift in purchasing behavior. Additionally, manufacturers are expanding their digital presence to establish direct engagement with buyers, ensuring that the accessibility provided by online retail continues to accelerate its market demand.

Regional Insights

Europe dominates the Global Smart Toys Market, primarily driven by a strong cultural emphasis on educational and STEM-based learning tools for children. High disposable income levels in key economies, such as Germany and the United Kingdom, facilitate substantial consumer spending on connected play products. Additionally, the region benefits from rigorous safety and privacy standards enforced by the European Commission, specifically through the Toy Safety Directive and GDPR. These strict regulations foster significant consumer trust regarding data security, driving higher adoption rates. This combination of purchasing power, educational focus, and regulatory assurance secures Europe’s position as the market leader.

Recent Developments

• In September 2025, Casio expanded its presence in the global smart toy sector by launching its AI-powered emotional support robot, Moflin, in the United States market. Originally released in Japan, the furry, hamster-like robot utilizes an emotional logic model to develop a unique personality based on interactions with its owner. The device features sensors and machine learning algorithms that allow it to recognize voices, respond to touch, and simulate evolving emotions without the use of verbal language. The US release followed a successful initial rollout and was positioned to compete in the growing market for robotic companions and therapeutic devices. The product's introduction to North America highlighted the increasing demand for non-verbal, emotionally responsive technology in the consumer electronics and toy sectors.
• In June 2025, Mattel entered into a strategic collaboration with OpenAI to develop a new generation of AI-powered play experiences and products. The partnership focused on integrating OpenAI's generative artificial intelligence models into the toy company's portfolio of iconic brands, including Barbie and Hot Wheels. The agreement aimed to create interactive toys that could engage in natural conversation and adapt to a child's play style while adhering to strict safety and privacy standards. Additionally, the toy manufacturer planned to utilize ChatGPT Enterprise for internal product development and creative ideation. This alliance underscored the industry's shift towards incorporating sophisticated language models into consumer products to revitalize engagement in a competitive market.
• In February 2025, the parent company of the LEGO Group established a new independent entity titled LEGO Digital Play to spearhead its expansion into digital gaming and interactive experiences. This strategic restructuring aimed to accelerate the development of digital products that complement the company’s physical building sets, moving beyond existing partnerships to create proprietary digital play platforms. The new division was tasked with exploring innovative ways to blend the brand’s core values with emerging digital trends, operating separately from the main toy manufacturing business to foster agility. This development marked a major shift in the company's approach to the "phygital" market, acknowledging the growing importance of integrated digital ecosystems in the toy industry.
• In July 2024, Skyrocket Toys announced a strategic multi-year partnership with ElevenLabs, a specialist in AI audio research, to integrate advanced voice generation technology into its new PLAi line of smart products. This collaboration facilitated the development of "Poe the AI Story Bear," an interactive plush toy capable of creating and narrating customized stories using generative AI. Under the agreement, the toy manufacturer leveraged ElevenLabs' text-to-speech software to provide the device with a lifelike, emotive voice that adapts to different languages and contexts. The initiative represented a significant move to merge traditional plush toys with cloud-based artificial intelligence to enhance storytelling experiences for children.

Key Market Players

• The LEGO Group
• Mattel, Inc.
• Leapfrog Enterprises, Inc.
• Pillar Learning, LLC.
• Seebo Interactive LTD
• Tomy Company, Ltd.
• fischertechnik GmbH
• ROYBI, Inc.
• Sega Toys Co. Ltd.
• Moravia Consulting spol. s r.o.

By Technology Type	By Age Group	By Distribution Channel	By Region
App-Enabled Toys Voice/Image Recognition Toys and Other (Screen Less Toys, etc.)	Up to Age of 5 Age of 5 to Age of 10 Age of 10 to Age of 15	Online Toy Shops Hypermarkets & Supermarkets Non-Retail Sales	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Smart Toys Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Smart Toys Market, By Technology Type:

• App-Enabled Toys
• Voice/Image Recognition Toys
• and Other (Screen Less Toys, etc.)

• Smart Toys Market, By Age Group:

• Up to Age of 5
• Age of 5 to Age of 10
• Age of 10 to Age of 15

• Smart Toys Market, By Distribution Channel:

• Online
• Toy Shops
• Hypermarkets & Supermarkets
• Non-Retail Sales

• Smart Toys Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE