Connected toys: New play possibilities when ingraining connectivity inside toys

• Author:
•  Insight-editor-1
• March 24, 2022

Insight summary

Modern-day connected toys, some even integrated with artificial intelligence (AI), are reshaping the way children play and learn, making education an engaging and fulfilling activity. This trend  has far-reaching implications, including new laws for child safety and privacy, the emergence of specialized professions, and a shift in consumer behavior prioritizing educational value. The integration of technology in toys has also prompted increased cybersecurity measures in households and a potential shift towards environmentally conscious manufacturing practices.

Connected toys context

Modern-day connected toys are Internet/Bluetooth-connected devices that can enhance children's overall playing experience. Furthermore, some of these connected toys are even integrated with artificial intelligence (AI) systems, making it possible for them to adapt to children's behavior and improve with time. An example of a connected toy is called Osmo, which children can connect to their iPad. This toy generates interactive games while keeping track of how engaged the child is while using the iPad's camera. 

The connected toys industry has become massive in recent years. According to research firm Markets and Markets, the connected toys market size is projected to be USD $9.3 billion in 2023. The market is expected to grow to USD $24.1 billion by 2028, with a compound annual growth rate of 20.7 percent during the forecast period.

Experts have projected that this industry might expand in many countries globally at a CAGR of 14-20 percent throughout the mid-2020s. By 2025, countries like the US, China, Canada, Japan, and Europe are forecasted to have the majority stake in the global connected toys market, followed by other countries like India, South Korea, and Australia. Experts suggest that by the mid-2020s, the connected toys market value may grow to USD $18.9 billion. 

Disruptive impact

The trend of connected toys integrating STEM (Science, Technology, Engineering, and Math) subjects is more than just a fleeting market phenomenon; it represents a shift in how education and play are merging. Renowned toy companies like Lego are investing resources into producing these toys, recognizing the potential for positive cognitive development, enhanced language skills, and accelerated emotional and social growth in children. By making learning enjoyable and interactive, these toys are helping to shape a generation that sees education not as a chore but as an engaging and fulfilling activity. Governments and educational institutions may need to take note of this trend, as it offers a fresh approach to education that resonates with the digital-native generation.

On the business side, the growth of the connected toys market opens up new opportunities and challenges for toy manufacturers, tech companies, and content creators. The integration of technology into toys requires collaboration across different sectors, including software development, hardware manufacturing, and educational content creation. Companies venturing into this market may need to consider not only the entertainment value of the toys but also the educational impact, safety, and privacy concerns. 

For governments and regulatory bodies, the rise of connected toys presents a complex landscape that requires careful consideration of privacy, security, and ethical concerns. Data collected by connected toys can provide valuable insights into children's learning patterns and preferences, but it also raises questions about data security and the potential misuse of information. Governments may need to develop clear guidelines and regulations to ensure that the technology is used responsibly and that children's privacy is protected. Collaboration with industry stakeholders, educators, and child development experts will be essential in crafting policies that support the positive potential of connected toys while mitigating potential risks.

Implications of connected toys

Wider implications of connected toys may include:

• The public and private education sector experimenting with connected toys to enhance at-home virtual education goals, leading to a more engaging and personalized learning experience that aligns with the interests and needs of individual students.
• Encouraging more companies and startups to invest greater resources into creating increasingly interactive and educational connected toys, leading to a more diverse and competitive market that caters to various age groups and educational needs.
• The growth of an emerging niche of professions, for people with technical and creative backgrounds, that are devoted to connected toys, leading to new career opportunities and the development of specialized skills in toy design, content creation, and technology integration.
• Governments introducing new laws and regulations regarding child safety, privacy, and consent so that the data collected by some of these AI-integrated connected toys are not misused, leading to a safer environment for children and increased parental trust in the products.
• The wider public's increased adoption of at-home cybersecurity subscriptions and tools, such as using VPN networks or anti-hacking systems to ensure that the connection to these Internet-of-Things (IoT) toys is secure, leading to a more conscious and proactive approach to digital security in households.
• A shift in traditional toy manufacturing towards more environmentally conscious practices, as the integration of technology in toys may require adherence to electronic waste management standards.
• The potential for connected toys to become tools for social interaction and collaboration among children, leading to the development of virtual play communities that transcend geographical boundaries and foster global friendships and cultural understanding.
• A change in consumer behavior where parents and guardians prioritize educational value and interactivity in toy selection, leading to a more discerning and informed approach to purchasing decisions that align with developmental goals.
• The potential for connected toys to be used in therapeutic and special education settings, leading to more tailored and engaging interventions for children with disabilities or learning challenges.
• The risk of widening the digital divide, as children in underserved communities may have limited access to connected toys and the educational benefits they offer.

Questions to consider

• What positive effects could the connected toys industry have on children’s education?
• Which connected toys have you have come across when shopping for family gifts, and what features make them worthwhile compared to traditional analog toys?