The global connected toys market was valued at approximately USD 10.04 billion in 2023 and is projected to reach USD 37.01 billion by 2030, expanding at a robust compound annual growth rate (CAGR) of 21.1% from 2024 to 2030. This significant growth is driven by several interrelated factors, including the increasing demand for interactive and educational toys, the widespread adoption of smart devices among children and parents, and continuous technological advancements in toy design and functionality.

As digital literacy among children continues to rise, there is a growing preference for toys that combine physical play with digital experiences. Connected toys, which are embedded with sensors, microcontrollers, and internet connectivity, offer dynamic interactions that engage children cognitively and emotionally. These toys often integrate with digital platforms, including mobile applications, augmented reality (AR) content, and online games, which enhances their entertainment value while also contributing to learning and development.

Another important market driver is the increasing use of AR and virtual reality (VR) technologies in toy design. These innovations provide immersive and personalized experiences, allowing children to explore imaginative worlds, solve problems, and develop motor and cognitive skills. The availability of content-rich, app-connected toys is also improving engagement and retention, thereby encouraging repeat purchases and expanding the overall market.

Key Market Trends & Insights:

• North America led the global connected toys market in 2023, accounting for over 35.0% of total revenue. The region’s dominance is attributed to high disposable incomes, early adoption of technology, and strong demand for premium interactive toys. Within North America, the U.S. market is projected to exhibit a significant CAGR throughout the forecast period.
• The Asia Pacific region is forecasted to record the highest CAGR over the forecast period. Rapid urbanization, rising tech-savvy middle-class populations, and increased digital infrastructure in countries such as China, India, and Japan are fueling this growth.
• In terms of age demographics, the 9–12 years age group represented the largest share of the market in 2023, contributing to over 40.0% of global revenue. This group shows strong interest in more advanced and feature rich toys that integrate apps, gaming elements, and educational content. Meanwhile, the 6–8 years age group is expected to show a notable CAGR.
• On the basis of device integration, smartphones accounted for the largest market share in 2023. The convenience of smartphone compatibility makes these toys more appealing to both children and parents. However, the wearables segment, which includes smartwatches and fitness trackers designed for kids, is anticipated to grow at the highest CAGR over the forecast period.
• When segmented by connectivity technology, the Bluetooth segment held the largest share in 2023, owing to its widespread use in app-connected toys that require local wireless interaction. In contrast, the Artificial Intelligence (AI) segment is projected to grow at the fastest pace, as AI enables toys to learn from interactions, personalize user experiences, and perform functions like voice recognition and conversational engagement.
• In terms of distribution channels, the online retail segment generated the highest revenue in 2023, reflecting the increasing popularity of e-commerce platforms for toy purchases. Online channels offer convenience, access to global brands, and product reviews that influence buying decisions. Meanwhile, the direct sales segment including company-owned stores and brand websites is expected to grow at a significant CAGR.
• Based on product type, the app-connected toys category dominated the market in 2023. These toys often provide enhanced features such as real-time feedback, story-based gameplay, and interactive challenges. On the other hand, the voice-activated toys segment is projected to expand at the highest CAGR.
• Regarding application, the entertainment segment held the largest revenue share in 2023, highlighting the strong demand for fun and engaging play experiences. However, the educational segment is expected to record the highest CAGR during the forecast period.

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Market Size & Forecast:

• 2023 Market Size: USD 10.04 Billion
• 2030 Projected Market Size: USD 37.01 Billion
• CAGR (2024-2030): 21.1%
• North America: Largest market in 2023

Key Companies & Market Share Insights:

The connected toys market is highly competitive, with established players and emerging startups continuously innovating to capture consumer attention. Leading companies include Hasbro, Mattel, and Sony Corporation, all of which are actively expanding their portfolios and geographic reach.

These companies are strategically engaging in partnerships, mergers, acquisitions, and new product development to stay ahead in the evolving marketplace. For instance, in March 2024, The LEGO Group announced a collaboration with Hasbro to launch LEGO DUPLO PEPPA PIG, a connected toy collection based on the popular preschool series. This collaboration offers colorful settings, iconic characters, and interactive narratives, blending traditional building sets with storytelling and digital interaction to inspire creativity and immersive play among children.

Such initiatives demonstrate how key players are leveraging brand partnerships and media content to expand their consumer base and provide children with engaging, multi-dimensional play experiences that go beyond conventional toys.

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Conclusion:

In conclusion, the global connected toys market is experiencing rapid growth, driven by rising demand for interactive, educational experiences and advancements in technologies like AR, VR, and AI. With strong contributions from key players such as Hasbro, Mattel, and Sony, and increasing adoption across age groups and regions, the market is set to expand significantly through 2030.