Table of Contents
2 Market Structure
3 Industry Definitions
4 Market Metrics
5 Industry Players
6 Recent Trends and Developments
Toys are generally regarded as children's playthings. They are seen in all cultural groups and have a long history in all societies and have historically been made out of wood, stone, metal or earthenware. Toy animals have been a favorite object, as well as balls, dolls, rattles or games. Currently, most in vogue worldwide appears to be video and electronic games - generally for boys.
Toys are a category of the recreational equipment industry and include dolls and games. The cross border trade of toys has become a substantial business. International trade is an important aspect of the recreational equipment industry because many of these companies import lower-quality branded products, use overseas parts, or face stiff competition from importers. Labor is an important input in the production of many recreational products, particularly entry-level products. The less developed countries have wage rates that are significantly lower than those in the United States. Many firms import their products with U.S. brand names; this practice is prevalent in the dolls, toys, games, sporting goods, and bicycle industries.
Prior to World War II, toy manufacturing was not a large business in the U.S. and most toys were imported. Japan and Germany both had large shares of the American toy market prior to the War. Since then, American toy manufacturing has expanded significantly with several milestones. The Barbie doll craze in the 1950s as well as the emergence of hand-held and other electronics in the 1990's both contributed to raising toy sales to new heights. Toys are still a cyclical business and during the latter part of the last century, it was commonly estimated that 70% of toy sales were accounted for by the Christmas holiday season.
Toys can segmented into several broad categories: action figures, arts and crafts, building and construction sets, dolls, electronic games, other games, infant/preschool toys, outdoor and sports toys, puzzles and vehicles.
Toy sales are generally done through the retailer distribution channel including discount and free-standing toy stores, chain stores, department stores, and other retail outlets. Increasingly, however, toy sales are made through on-line websites, especially the electronic and video game categories of the business as well as wholesalers, and distribution centers. There is also increasing concentration in both toy manufacturing and toy retailing, with several large players such as Mattel and Hasbro in the manufacturing end and a few retailers in the selling side such as Toys 'R' Us, WalMart and BestBuy (electronic toys).
Production has increasingly gone outside the U.S, especially into China and a few other emerging markets. Employment in the toy industry has declined from its high in 1993 with 42,300 workers to 17,400 workers in 2005. The industry has lost more than half of its employment in the last ten years and although, traditional toys and games dominate the industry until 2000, video games now account for an increasingly large share of sales. The chart below, with sources from the U.S. Department of Commerce, depict the contraction in the sub-category of U.S. Games, Toys and Children's Vehicle Manufacturing. The number of firms in the 5 year period up to 2003, decreased by 3% to 732, but employment fell over 32% to less thsan 20,000.
The Department of Commerce figures for a related category, Dolls and Stuffed Toys, show even a sharper decline, with the number...