Smart toys will represent a USD 18 billion hardware and software market by 2023, up from an estimated USD 6 billion in 2018, according to a report from Juniper Research. This increase will primarily be driven by the growing popularity of smartphone-connected toys and related in-app purchases, which are projected to grow by 69 percent annually over the next 5 years.
The new research found that in-app purchases will become the main driver for growth, with content revenues reaching 25 percent of the total industry by 2023. For example, Merge’s Augmented Reality Cube toy highlights the potential of the smartphone working alongside an established platform for successful content distribution and monetisation.
This growth coincides with the stagnation of the console-based ‘Toys to life’ sector. The report recommended that vendors incorporate smartphones into their proposition to drive new innovative games.