First Research US Industry Profile

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Toy & Game Manufacturing
SIC Codes: 3942, 3944
NAICS Codes: 33993
Last Quarterly Update: 6/27/2022
Companies in this industry primarily engage in manufacturing complete dolls, doll parts, doll clothes, action figures, toys, games (including electronic), hobby kits, and children's vehicles. Major companies include Hasbro, JAKKS Pacific, and Mattel (all based in the US), along with Bandai Namco and Sanrio (both based in Japan), Geobra Brandstätter (Germany), and LEGO (Denmark), as well as the gaming hardware divisions of Microsoft, Nintendo, and Sony.
The global market for toys and games is about $355 billion in 2021, at a 2.86% compound annual growth rate (CAGR) over the 2021-2026 forecast period, according to Statista. China is the world's largest manufacturer of games and toys, with a revenue of about $75 billion in 2021.
The US toy and game manufacturing industry includes about 500 establishments (single-location companies and units of multi-location companies) and has annual revenue of about $1.6 billion. Revenue from toy manufacturing that takes place in the US represents only a portion of revenue recorded by US-based manufacturers, which commonly arrange to have toys produced at factories in countries where costs are lower.
The industry includes manufacturers of video game consoles, which are covered in the Electronic Toys & Games Manufacturing industry profile, but does not include companies that produce software for video or computer games, which are covered in the Entertainment & Games Software industry profile.
Competitive Landscape
Growth in the population of children age 12 and younger drives demand for toys; demand for electronic gaming products is driven by personal income and product innovation. The profitability of individual companies depends on identifying market trends and marketing effectively. Large companies can offer a wide selection of toys, and they have scale advantages in purchasing, manufacturing, distributing, selling, and marketing. Small companies compete effectively by specializing in a product segment or by responding faster to market trends. The US industry is highly concentrated: the top 50 companies generate about 80% of revenue.
Imports, primarily from China, make up the vast majority of the US market. Canada is the largest market for US toy and game exports. Manufacturers of video and electronic games face increasing competition resulting from the increasing use of smartphones and tablets for gaming purposes, driven by the massive increase in the number of mobile game apps and other free or low-cost games available to consumers.
Products, Operations & Technology
Major product segments include nonelectronic toys (transportation toys and sets), which account for about 30%; electronic toys and games (video game consoles, ... plus:
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Business Challenges
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