By: Mark Seavy

Toy sales are expected to decline this year, though at a lower rate than 2023 when they fell 7%, industry executives said.

In addition to consumers cutting back on spending, the downturn in sales is also tied to larger industry issues like shipping bottlenecks and productions delayed by strikes.

“The toy industry will decline this year, although at a lesser rate than 2023,” Mattel CEO Ynon Kreiz told analysts. “That is due to a lighter toyetic theatrical film slate and the impact of the shift in consumer spending patterns towards experiences and services, which will moderate over the year.”

Ultimately, toy sales remain 17% ahead of 2019 and the anticipated slowdown in the decline is partly due to inventory reductions. Mattel, for example, ended the year with $574 million in inventory, down 38% from a year ago, though levels at retail remain “slightly elevated,” according to Mattel CFO Anthony DiSilvestro.

So, while challenges remain, suppliers at recent toy fairs in London and Nuremberg expressed optimism.

In the UK, toy revenue fell 5% in 2023 to £3.5 billion. Licensed products accounted for 32% of sales, however, up from 26% in 2020. There has also been an increase in UK sales through off-price retailers like B&M and The Works, the latter of which is expanding its toy and licensed selection.

Mattel also appeared to further embrace licensing at the Nuremberg show. The toymaker displayed licensed products alongside its core toy brands, demonstrating the depth of its IPs.

Board games were another bright spot at the toy fairs. While sales have slowed after hitting a peak during the pandemic, they remain higher than 2019 with some emphasis being given to 3D puzzles, according to a Ravensburger spokesperson. Ravensburger is launching a Disney edition of Chronicles of Light: Darkness Falls, an adventure game illustrated and designed by women, in July. The company also released Disney-licensed Lorcana trading cards last August.

Hasbro didn’t have a stand at London Toy Fair, but Hasbro Gaming took one to highlight the toymaker’s IP, which includes Clue, Monopoly, and Battleship. Goliath Games, which recently forged a licensing and distribution agreement with Funko Games, also took high-profile booth space at the London show to promote its The Traitors board game based on the hit BBC One series that completed its second season in January.

And while wooden toys had a dedicated hall at the Nuremberg show, much of the assortment was non-licensed. In London, Worlds Apart and Melissa & Doug both had a strong showing, the latter having recently launched National Parks Foundation-licensed puzzles and was acquired by Spin Master Corp.

A number of brands, including MGM’s hit Netflix series Wednesday as well as the Harry Potter franchise, were found at both shows with a specific focus on products for teens, kidults, and collectors.

“The rise of the kidult trend is more than the nostalgia of rediscovering your childhood,” Gary Pope, co-founder of Kids Industries, told License Global. “It’s far more interesting than that, and the products that have an impact in this category are rarely actually for children. This is about rediscovering the human need to play, and that must be a very positive thing and a much-needed form of escapism.”

That focus on rediscovering play is expected to benefit classic play patterns and brands. For example, there was significant emphasis on tried-and-true IPs at the recent NY Now show in New York. To take advantage, Schylling Toys, which purchased the original Big Wheel brand and products in 2021, plans to expand distribution beyond the specialty retailers and Tractor Supply that it has so far called home, a spokesperson said.

“Toys for adults will only become more popular in 2024,” Pope said.