Table of Contents
Introduction
The global connected toys market is poised for exponential growth, with a projected market size of USD 51.8 Billion by 2034, up from USD 8.8 Billion in 2024, growing at a CAGR of 19.4% from 2025 to 2034. As digital technologies continue to shape children’s playtime, the sector is witnessing the merging of traditional toys with interactive, digitally enhanced experiences.
Using sensors, Bluetooth, Wi-Fi, and mobile applications, connected toys provide engaging, personalized learning experiences. This surge in demand is driven by rising digital adoption among children, the increasing appeal of educational entertainment, and an expanding consumer base supported by the growing affordability of smart devices and high internet penetration.
Key Takeaways
- The Global Connected Toys Market is expected to reach USD 51.8 Billion by 2034, growing at a CAGR of 19.4% from 2025 to 2034.
- App-Connected Toys dominated the By Type segment with a 29.5% share in 2024.
- Smartphones led the By Interfacing Device segment, holding a 47.8% share in 2024.
- The 9-12 Years age group accounted for 46.3% of the market share in the By Age Group segment in 2024.
- Bluetooth led the By Technology segment with a 36.8% share in 2024.
- Entertainment was the leading application in the By Application segment, commanding 47.4% of the market share in 2024.
- North America held a dominant market position with a 38.4% share, generating USD 3.3 Billion in revenues in 2024.
Drivers
- Rising Adoption of IoT and AI Integration: The growing integration of the Internet of Things (IoT) and Artificial Intelligence (AI) in toys is making them more interactive and adaptive, offering personalized experiences that engage children in both entertainment and learning.
- Increased Digital Adoption Among Children: With smartphones and mobile applications becoming ubiquitous, connected toys are leveraging these devices to enhance playtime experiences. Children are increasingly able to control and personalize toys using mobile apps, which fuels the demand for such products.
- Parental Demand for Educational Entertainment: Parents are seeking toys that offer both entertainment and educational value, especially those that promote cognitive, social, and creative development in children. This demand is boosting the popularity of STEM-based toys and interactive learning solutions.
- Expanding Internet Penetration: High-speed internet and the increasing availability of Wi-Fi and mobile networks are facilitating seamless connectivity, enabling connected toys to function optimally and ensuring a steady market growth.
Use Cases
- Educational Use: Toys equipped with adaptive learning algorithms help children develop skills in STEM subjects like math, science, and engineering. These toys offer progressive difficulty levels, track learning outcomes, and adjust content to suit the child’s abilities.
- Entertainment: The majority of connected toys are designed for immersive play experiences, combining interactive storytelling, role-playing, and digital play. They integrate with mobile apps, enabling multiplayer gaming and real-time content updates.
- Health and Fitness: Wearable connected toys such as smart wristbands and interactive fitness devices promote physical activity and healthy living. These toys track activity levels, encouraging children to stay active while having fun.
- Safety and Monitoring: Certain connected toys come with built-in safety features like GPS tracking, allowing parents to monitor their child’s location and activities remotely.
Market Segmentation Overview
- By Type: The market is dominated by App-Connected Toys with a 29.5% share, followed by Voice-Activated Toys, Screenless Connected Toys, and Smart Toys with Wearable Integration.
- By Interfacing Device: Smartphones lead the segment with a 47.8% share, with Tablets and Consoles & PCs also contributing significantly.
- By Age Group: The 9-12 Years age group takes the largest share at 46.3%, with strong demand for interactive and STEM-based educational toys.
- By Technology: Bluetooth holds the dominant position with a 36.8% share, while Wi-Fi, RFID, AI, AR, and VR are emerging technologies within the market.
- By Application: The Entertainment application is the leader with a 47.4% market share, with significant growth in educational and health-related applications.
Major Challenges
- Concerns Over Data Privacy: The collection of personal data from children has raised significant concerns about privacy. Toys that collect sensitive information may expose children to risks, such as unauthorized access to their data, affecting consumer trust.
- Cybersecurity Risks: Connected toys that rely on the internet are vulnerable to hacking and malicious attacks, which could compromise the safety and security of children. Manufacturers need to prioritize robust security features to mitigate these risks.
- Regulatory Compliance: With stricter regulations such as GDPR in Europe and COPPA in the US, manufacturers are required to adhere to child protection standards and ensure that their products are compliant with privacy laws. Compliance requires significant investment in data security and legal frameworks, posing challenges for companies operating in the market.
- Infrastructure Limitations in Rural Areas: While the market is booming in urban centers, poor internet infrastructure in rural and underdeveloped regions hinders the widespread adoption of connected toys. Limited bandwidth and unstable connections may restrict the effectiveness of connected play.
Business Opportunities
- Development of STEM-Based Educational Toys: As parents and schools continue to emphasize early education in STEM fields, the demand for educational toys that promote learning in science, technology, engineering, and mathematics is expected to increase.
- Integration of AR and VR: Augmented and virtual reality technologies are set to revolutionize the toy industry, offering immersive play experiences that blend physical and digital worlds. The integration of these technologies will appeal to both younger children and tech-savvy teenagers.
- Expansion in Emerging Markets: Countries in Asia, Latin America, and Africa present untapped markets for connected toys. Rising disposable incomes, growing access to digital devices, and increasing demand for educational products are creating new opportunities for businesses to expand.
- Subscription-Based Models: Subscription-based services, such as renting connected toys or providing regular content updates, are gaining traction among parents looking for cost-effective and sustainable ways to keep their children engaged with new learning experiences.
Regional Analysis
- North America dominates the connected toys market, with a 38.4% market share and USD 3.3 Billion in revenue in 2024. The region benefits from strong digital infrastructure, high smartphone penetration, and government initiatives promoting digital education.
- Europe is witnessing steady growth, driven by investments in interactive learning tools and a focus on child data protection. Demand for eco-friendly and tech-driven toys is also shaping market trends in the region.
- Asia Pacific is emerging as the fastest-growing region, with countries like China, Japan, and South Korea at the forefront of adopting IoT-enabled toys. Rising middle-class incomes and growing digital literacy are expected to fuel further expansion.
- Middle East and Africa are experiencing gradual adoption of connected toys, with government-led initiatives in digital education helping accelerate growth, particularly in urban areas.
- Latin America is witnessing promising growth, especially in countries like Brazil and Mexico, where rising e-commerce platforms and digital learning initiatives are driving demand.
Recent Developments
- June 2025: Mattel partnered with OpenAI to launch AI-powered toys that integrate advanced generative AI with interactive play, marking a major innovation in children’s toy experiences.
- July 2025: Steelbird Baby Toys invested ₹10 crore to expand its infant toy range, strengthening its footprint in India’s rapidly growing baby care market.
- December 2024: Alliance Entertainment acquired Handmade by Robots, a collectible toy company, boosting its market presence in the growing collectibles sector.
Conclusion
The global connected toys market is on a significant growth trajectory, driven by technological advancements in AI, IoT, and mobile connectivity. As digital adoption among children rises and parents seek innovative, educational, and entertaining toys, connected toys are poised to transform the play experience.
Despite challenges related to data privacy, cybersecurity, and infrastructure limitations, opportunities in STEM education, AR/VR integration, and emerging markets are expected to drive the sector’s expansion. With strong regional dynamics and recent innovations from leading players, the connected toys market is set for sustained growth in the coming years.
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