Educational Toy Market
The future of the global educational toy market looks promising with opportunities in the supermarket/hypermarket, specialty store, and online retail store markets. The global educational toy market is expected to reach an estimated $209.5 billion by 2035 from $84.3 billion in 2027 with a CAGR of 12.0% from 2027 to 2035. The major drivers for this market are the increasing demand for interactive learning tools, the rising focus on early childhood development, and the growing awareness of educational benefits.
- Lucintel forecasts that, within the product type category, games & puzzles is expected to witness the highest growth over the forecast period due to growing interest in children's skill development through educative play.
- Within the distribution channel category, supermarkets/hypermarkets is expected to witness the highest growth over the forecast period due to product variety and convenience of shopping at a single outlet.
- In terms of regions, Europe is expected to witness the highest growth over the forecast period due to recognition of the role of early years education and development.
Emerging Trends in Educational Toy Market
Traditional educational toys have simple features. However, that is rapidly changing. By 2027, the educational toy industry will be dominated by interactive toys. In the meantime, between 2023 and 2025, manufacturers will work to improve the sustainability of educational toys and shift to a direct-to-consumer (D2C) business model. The focus will be on improving the supply of educational toys and integration of digital learning. Lucintel predicts that by 2030, learning will occur in multiple locations (e.g. home, classroom) and incorporate the use of digital technology.
- Sustaining Innovation: Since 2022, several manufacturers have increased the use of recycled materials in their toys. Mattel has set a goal to achieve the same in all their products and toy packaging by 2030. Other manufacturers may follow.
- Integration of Digital Learning: Traditional educational toys have simple features. However, that is rapidly changing. By 2027, the educational toy industry will be dominated by interactive toys. In the meantime, between 2023 and 2025, manufacturers will work to improve the sustainability of educational toys and shift to a direct-to-consumer (D2C) business model. The focus will be on improving the supply of educational toys and integration of digital learning. Lucintel predicts that by 2030, learning will occur in multiple locations (e.g. home, classroom) and incorporate the use of digital technology.
- Inclusive Design: More developers are creating lines of toys that incorporate a variety of designs for different types of learners. This has been in response to changing demands by consumers (i.e. parents and teachers) for more options. Some of LEGO's designs focus on inclusive play, and by 2025, they plan to make their LEGO Braille Kits available in 20+ countries. Inclusive design will soon be part of the requirements for institutions.
- Steam and Coding: Digital skills are becoming more and more integral, and with the projection that 39% of the skills currently required for jobs will change by 2030, many countries are focusing on STEM skills. Therefore, other countries are likely to follow, and change their focus toward STEM skills. Because of this, building and coding toys are likely to become widely incorporated into the education system.
- Premiumization: In 2025, premium STEM toys will cost over $50. One of the reasons parents are willing to pay more is because of developmental claims. Other reasons may include replacing components and/or subscriptions. As inflation increases, basic toys will always be in demand.
It Will Be Beneficial for A Company To Create A Product that Has A Balance of All The Following: A price point that is acceptable to consumers, designs that foster learning, sustainability, and durability. Companies that integrate these features will likely be around for a long time.
Recent Developments in the Educational Toy Market
The period from 2021 to 2027 is forecast to see an increase in the expansion and investment level in the educational toys sector, mainly to integrate electronic elements in toys, and for development of cognitive learning and emotional intelligence toys. The highest demand is expected in early childhood and in the toys for children with special needs and in the toys for promoting the learning of STEM (Science, Technology, Engineering, and Math) disciplines. According to Lucintel, competition will increase amongst educational toys manufacturers for Research-based and Developmental Content toys, and for the toys made with environment friendly and recyclable materials.
- Production Expansion: The LEGO Group started the construction of a 1.0 billion EUR factory in Vietnam in 2022, and the factory is expected to start production in 2025. The new factory will accelerate the group's expansion in the Asia-Pacific region.
- Technology Introduction: In 2025, Mattel started the development of products based on Artificial Intelligence. The company will aim to expand its products beyond the area of connected toys.
- Business Partnerships: In 2025, several toy and edutainment companies announced strategic alliances to integrate digital and cognitive content in toy products. The partnerships are expected to enable the companies to develop subscription-based and customer-retention products.
- Focus on Sustainability: In 2025, several large toy manufacturers announced the replacement of virgin plastics with sustainable plastics in their products. Similar trends will likely change the prices and the type of products offered by the manufacturers in the toy sector.
- New Retail Channel: In 2025, the largest toy retailers (Amazon and Walmart) and education-focused retailers integrated content differentiation and age group segmentation in their offering.
The market is expected to reward companies for investments in research and development that help demonstrate the learning value of their products.
Strategic Growth Opportunities in the Educational Toy Market
According to Lucintel, from 2024 to 2026, the educational toy industry is expected to grow because of increasing demands by parents and schools for products focused on learning outcomes. As the Lucintel report states, in addition to the increase in demand focused on learning outcomes, there is expected demand focused on stem, fundings focused on stem, increase in digital connectivity, and focus on inclusiveness and other diversity related issues. Additionally, the report predicts increased manufacturing focus on higher end products and increased focus on international markets.
- Stem and Coding Toys: The Lucintel report states that the market for stem and coding toys will increase because of integration of stem and other similar skills focused learning in primary education, and because of increasing focus on learning outcomes in general.
- Inclusive and Therapeutic Toys: Inclusive and therapeutic toys targeting various developmental conditions are focused mainly on special education and, as stated in the report by the U.S. Department of Education, in 2025, accounted for about 7.9 million children. The report states that the market for inclusive and therapeutic toys focused on special education is expected to increase.
- School and Childcare Procurement: Instead of selling to children, vendors can sell to teachers and schools. For example, vendors can bundle classroom items and sign multi-year supply contracts. The OECD noted that member countries spend a significant portion of their budgets on education. Thus, selling to schools can be less seasonal and more stable. In addition, school purchases can increase the average customer lifetime value.
- Emerging Market Localization: Play patterns and content localization can improve product acceptance in markets such as the Middle East, Latin America and Southeast Asia. Affordability and demand constraints on basic social protection (as noted by UNICEF in February 2025) require differentiated and affordable product offerings.
- Subscription Learning Platforms: Recurring revenues can be achieved with subscription boxes and kits. Customer acceptance and engagement can be improved with challenges and/or activities. The 2025 update of the Digital Education Action Plan reaffirmed the commitment of 27 European Member States to digital education. Improving acceptance and engagement can improve the longevity of customer relationships and help manufactures understand how children really learn.
Some of the strongest companies in this space will create products that fulfil the same need as other companies, but incorporate learning into their products. Companies that produce products that are used in schools, homes, and clinics can promote their products to schools, and also use data from the school products to learn more about the home and clinic products. Measuring the impacts of their products and services will be important to help companies improve their services, content and engage their customers.
Educational Toy Market Drivers and Challenges
The educational toy industry is impacted by various trends such as the use of technology in play, how parents are informed about education, how parents spend on education and toys, and the concern for the environment. Toys should encourage the development of a child's skills in different areas. The combination of technology and the use of multiple learning resources to provide effective learning in an interactive way is preferred. Security, price, and the incorporation of different learning resources to provide learning in the real and the virtual world are important in order to remain in the industry.
The factors responsible for driving this market include:
- Increasing Awareness Among Parents Regarding The Development of Various Skills in Children: It is a general trend to look for toys that enhance the development of various skills in children e.g. creative, social, logical, cognitive, etc. Parents also look for toys that help in the overall development of children. With the increasing awareness regarding early childhood development, parents are spending on toys that help in the development of reading and writing skills, as well as logical and scientific development. According to the report by United Nations, 2025, approximately 10% of the world population is below the age of 5, and it is expected that the toys that serve a specific purpose will have high demand in the next 3-5 years.
- Integration of Advanced Technologies in Toys: In recent years, there has been significant improvement in educational toys due to the integration of advanced technologies like artificial intelligence and augmented reality. In next 3-5 years, it is expected that educational toys will be integrated with advanced technologies that will help in the self-learning process and will be interactive in nature. It will help in the development of various skills in children.
- Steam and Steam Education: Preparing children for future employment trends results in a priority being placed on science, technology, engineering, arts and mathematics skills. This creates a demand for science and technology-based toys and child development products. Emphasis on these skills encourages critical thinking and problem solving. In February 2025, the World Economic Forum ranked the top skills employers looked for in employees and revealed that the most valued skill was core skills, namely, analytical thinking and learning. The next few years are likely to further advance toys and products based on STEM principles. There is potential for STEM products to be used both within and outside the classroom. When establishing products for the education market, consideration of product features such as challenge levels, material types, durability and educational content is important.
- Sustainable Product Innovation: The concerns for the environment influences how children and families make purchasing decisions. This has led manufacturers to create products that use sustainable materials, reduce packaging and allow the product to be reused. The European Union's packaging law which went into effect in January 2025 established goals to reduce packaging and increase the recyclability of packaging. During this time, companies were likely to adjust their business practices to ensure they met consumer perceptions of sustainability. To accomplish this, companies may develop and manufacture a product that uses less material, while still meeting required safety and performance standards.
- Manufacturing Efficiency and Omnichannel Retail: Manufacturers can quickly bring products to market by using modular production, automated design, and direct distribution to consumers. Online retail gives access to worldwide markets. E-commerce is growing and is projected to exceed $6 trillion in sales by 2025. Entrepreneurs can improve their inventory and order management by using data analysis to accurately predict seasonal demand. New and existing businesses will help change the way educational products are made and sold by using modular design, multiple price points, and differing the source of production to best produce their products where they can be sold. The differences in cost to produce will allow for greater access to educational products.
The challenges facing this market include:
- High Product Cost: Price increases and the uncertainty of global trade increase the costs to produce educational products, especially toys. While the World Bank expects global gross domestic product to increase by 2.7% in 2025 and 2026, it is unclear if the global economy will improve enough to increase discretionary spending on educational products. To meet global demand for affordable educational products, companies will have to improve their production by using modular design to integrate various production and sourcing methods.
- Safety, Privacy: To go to market, manufacturers of children's educational toys must hurdle rigorous requirements for the safety of the products' small components, chemicals, and electric elements. They must be age-appropriate, cybersecurity ready, and protect the privacy of children. Connected products pose greater risks. Manufacturers of children's products face stiff penalties for violations of children's privacy and data protection law. The General Data Protection Regulation (GDPR) of the European Union continues to protect children's data and privacy. The regulation provides for a fine up to 20 million Euros or 4% of a violator's global revenue for each serious offense committed. Privately owned entities can be expected to incur greater cost for compliance with data protection law and other laws regulating children's products. In the next few years, to remain in the children's products market, firms will need to design products using privacy protection, test the products, and source their supplies through a network of trusted suppliers.
- Intense Competition Differentiation Difficulty: Rapidly growing digital learning and educational platforms, as well as traditional publishers of educational materials, and established manufacturers of children's products present opportunities for new market entrants. Traditional product cycles are further contracting. Parents want products that inspire and enhance the cognitive development of their children.
Educational toys will become increasingly engaging and sustainable. Retailers will prioritize interactive educational toys. Manufacturers who create toys with these features will have to employ design thinking in order to account for economics of production. To improve a product's longevity, durability and value, it will be essential for manufacturers to incorporate evidence-based design thinking in order to create sustainable educational products. Suppliers who employ integrated supply chain strategies will be able to more effectively respond to volatile markets. Long-term success for manufacturers will be determined by their commitment to employing responsive design thinking in order to create sustainable, educational products at an affordable price.
List of Educational Toy Market Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies educational toy market companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the educational toy market companies profiled in this report include-
- LEGO Group
- Mattel Inc.
- VTech Holdings Ltd.
- Hasbro Inc.
- Spin Master Corp.
- Learning Resources Inc.
- Melissa & Doug LLC
- Ravensburger AG
- Gigo Toys Co. Ltd.
- MindWare Holdings
Educational Toy Market by Segment
The study includes a forecast for the global educational toy market by product type, material, technology integration, distribution channel, and region.
Educational Toy Market by Product Type [Value ($B) from 2019 to 2035]:
- Building & Construction
- Games & Puzzles
- Arts & Crafts
- Role Play
- STEM Toys
- Others
Educational Toy Market by Material [Value ($B) from 2019 to 2035]:
- Conventional Plastics
- Recycled/Bio-plastics
- Wood & Paper-based
- Others
Educational Toy Market by Technology Integration [Value ($B) from 2019 to 2035]:
- Non-Electronic Traditional Toys
- Electronic/Interactive Toys
- Smart Toys with AI/IoT
Educational Toy Market by Distribution Channel [Value ($B) from 2019 to 2035]:
- Supermarkets/Hypermarkets
- Specialty Stores
- Online Retail Stores
- Others
Educational Toy Market by Region [Value ($B) from 2019 to 2035]:
- North America
- Europe
- Asia Pacific
- The Rest of the World
Country Wise Outlook for the Educational Toy Market
Changes in the toy market include more localized production, digitization of products and greater safety in toy design. Leading toy companies will place more emphasis on local market production and educational toys between 2025 and 2027. Lucintel estimates that changing trends in the toy market will create opportunities for new rivals, but in the end, the success of a company will depend on its ability to implement and execute a strategy.
- United States: The LEGO Group has started construction of a 1.7 million square foot production facility in Chesterfield County, Virginia. Construction is expected to be completed by 2025. Mattel is also making similar changes to enhance their production and distribution capacity for the educational toys and accessories in the United States and Canada.
- China: The LEGO Group has a manufacturing plant in Jiaxing and is currently focusing on the development of more product ranges that are geographically aligned to China. It has also focused on enhancing the retail outlets for its products. In January 2025, the Chinese Ministry of Education also focused on enhancing the teaching of Science and Technology in China's primary schools.
- Germany: Other companies within the Ravensburger group, such as INA & Dr. Pichler, also saw growth in games and puzzles in 2022. Additionally, all German manufacturers of children's products must comply with the latest version of the European Toy Safety Directive 2009 (EN 71 - Parts 1 - 3) by 2025. These provisions will affect the process of designing children's educational products, as well as the selection of raw material suppliers. Finally, these regulations will increase the costs of testing children's products.
- India: The Indian Bureau of Indian Standards (BIS) extended its mandatory product certification scheme to toys in 2015. As of December 2024, the first LEGO store in Bangalore, Karnataka, strengthened the organized retail sector of India. These developments are anticipated to shift the Indian market towards higher quality, educational toys. Also in 2025, Bandai Namco will continue its monopoly on Koma ("Ball") and capsule toys in Japan.
- Japan: On the other hand, Bandai Namco will continue its domination of the market with Koma, capsule, and other character products. In 2025, it is expected that Japan will continue to trend toward the integration of learning, virtual reality, and other digital services.
Features of the Global Educational Toy Market
- Market Size Estimates: educational toy market size estimation in terms of value ($B).
- Trend and Forecast Analysis: Market trends (2019 to 2026) and forecast (2027 to 2035) by various segments and regions.
- Segmentation Analysis: educational toy market size by various segments, such as by product type, material, technology integration, distribution channel, and region in terms of value ($B).
- Regional Analysis: educational toy market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
- Growth Opportunities: Analysis of growth opportunities in different product types, materials, technology integration, distribution channels, and regions for the educational toy market.
- Strategic Analysis: This includes M&A, new product development, and competitive landscape of the educational toy market.
Analysis of competitive intensity of the industry based on Porter's Five Forces model.
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This report answers following 11 key questions:
- Q.1. What are some of the most promising, high-growth opportunities for the educational toy market by product type (building & construction, games & puzzles, arts & crafts, role play, STEM toys, and others), material (conventional plastics, recycled/bio-plastics, wood & paper-based, and others), technology integration (non-electronic traditional toys, electronic/interactive toys, and smart toys with ai/iot), distribution channel (supermarkets/hypermarkets, specialty stores, online retail stores, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
- Q.2. Which segments will grow at a faster pace and why?
- Q.3. Which region will grow at a faster pace and why?
- Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
- Q.5. What are the business risks and competitive threats in this market?
- Q.6. What are the emerging trends in this market and the reasons behind them?
- Q.7. What are some of the changing demands of customers in the market?
- Q.8. What are the new developments in the market? Which companies are leading these developments?
- Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
- Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
- Q.11. What M&A activity has occurred in the last 7 years and what has its impact been on the industry?