The world of toys is going digital

Almost all toy segments, from dolls and vehicles through to tabletop games, are now being brought into the digital world. Increasingly, they are being combined with electronic components and functions that make them more realistic, feature-rich, exciting or simply contemporary. The gaming sector, focused exclusively on the virtual/electronic realm, has detached itself from digital toys. Turnover from gaming has actually long since overtaken that of toys, both nationally and globally, and the sector is being further expanded and promoted.

There is still no clear answer to the question of the extent to which digital and analogue play complement or compete with each other. Leaving gaming out of the equation, however, puts a different slant on things: the core target group for toys does not think in terms of different “worlds”. For them, the digital world is an integral part of the life they live, in which consuming media across various devices is just as routine as learning new things and engaging in different kinds of play, with analogue and digital sources.

Digital natives see no difference between what older generations would divide into “classic” and “digital”. What counts for them is how convincing the content of the game concept is.

And this is where the products on offer often fall down. Digital elements, such as the integration of the Echo device with the Alexa voice assistant or the sequencing of game play (“coding toys”), often do not actually add value to a toy and are therefore more interesting to parents than to children and young people. Frequently included simply for the sake of it, they do not always bring something to the feel or fun of the game.

Therefore, no matter the toy, whether analogue, digital or hybrid, the focus should always be on the play value to ensure that the object is a toy, and not a gadget.

It’s obvious that electronics and interactivity belong in modern toys – after all, these are what children are used to in their daily lives. “Electronic toys are important to the industry because they become our gateway to children via which we can get them playing”, confirmed Chris Schulz, VP Kites & Designs USA.

Of course, there are supporters of this development as well as industry participants who are critical of it. And it does not make obvious sense to integrate digital elements within every segment. But even supposedly classic toys cannot escape the spirit of the times: thus, we are seeing wooden railways with interactive elements and electronic control units as well as outdoor equipment with digital features. “I think that electronic toys are the future, regardless of how some people in the industry would like things to go. It’s just what children know. We are seeing a whole lot of apps – so you have to try and go with the trend”, said Chris Schulz.

Some countries and regions are more open to digital transformation, while others are more sceptical. Asian and US consumers, for example, tend to be curious and open-minded when it comes to technical features, considering them an opportunity and a sign of progress. Their legal framework is often more tech friendly as well. In Europe, meanwhile, possible hurdles and the limits of connectivity and the digital transformation play a major role. Accordingly, US and Asian manufacturers enthusiastically integrate such technologies into toys.

The discourse is also being shaped by what typically constitutes “play” in each country and the educational content that games and toys are expected to convey. German educators and parents, for example, are mostly positively disposed towards free and intuitive play and its educational value. In the US and some Asian countries, however, measurable knowledge transfer aimed at producing children that can compete is of great importance. Integrating digital elements can be a modern way of conveying educational content.

Manufacturers and retailers are also driven by the fear of “losing” children to the digital world. Yael Arad, Head of the Commercial Division at Nickelodeon & Viacom Brands, Israel, pointed out: “I believe that digital platforms and games are influencing the toy industry just like the Internet is influencing the magazine market. I think we need to take the time to think about how we can combine virtual and physical toys, otherwise we are going to lose the children.” After all, the playing age is coming down in many categories – and the period of time in which children engage with toys is becoming shorter in favour of digital offerings. For example, girls are no longer interested in dolls right up to puberty, as they used to be. From primary school onwards at the latest, they also engage with media, the various stars and licenses, and digital entertainment.

Digital and interactive elements can be good selling points. Especially when they are already known and do not have to be explained and understood on the shelf, or when they can generate a pull effect through their online presence. Brick-and-mortar retailers often lose out in this regard. This is due to the increasing intangibility of electronic toys, but also the need for shop personnel to be up to date on regular upgrades. The entire gaming sector migrated from toy retailers to specialist electronics stores, for example, before moving almost exclusively to gaming platforms and app stores.

Classic toys are easier for retailers to handle: they are mostly self-explanatory and are still real goods in a conventional sense that can change hands. Even bridging technology such as Disney Infinity and similar concepts do not do so well in the retail sector. Physical goods tie up manufacturers’ and retailers’ capital. They cannot be updated and therefore become obsolete more quickly.

Without apps, digital features and electronic elements, it seems difficult to inspire this innovation-driven industry. These additions are often talked up as being “revolutionary” or “the key to success”. Generation Z consumers, on the other hand, do not immediately look to see whether a toy has digital aspects. They check whether the toy matches their attitude to life and mentality.

“So, what now? Digital or not?”, you must be asking yourself.

The answer is actually very simple: as long as the feel of the game and the content are right and as long as the toy or game is played with again and again, with the same level of enjoyment or even ever more so, it doesn’t matter how you achieve this.

Therefore, it makes sense to integrate digital features if they add real value to the toy and give it functions worth playing with.

What matters for both manufacturers and retailers is staying authentic. Produce and sell what you can stand over, what makes you happy, and what you also believe in.