As videogames become more and more mainstream and today represent the dominant form of play in all age groups, they are now circling back to teach a new trick to a former competitor: physical toy manufacturers.
Physical toys are now the object of a renaissance in our digital world, as “connected toys” that interface with companion “toys-to-life games.” These connected toys act as a medium linking the physical and virtual worlds—through the development of game software that recognizes specific toys—and associating special abilities and powers to them. The toys basically act as passwords or keys.
Since the end of 2011, toys-to-life games and connected toys have generated over $2 billion in revenue. And that’s just a beginning seeing as major brands like Disney and Lego have hopped on the bandwagon since then.
Nowadays, kids are practically born with a tablet in hand. Various statistics point to the frequent use of smartphones and tablets as early as two years of age. Meanwhile, toy sales have been slowing as traditional toy companies have failed to keep up with evolving expectations in terms of entertainment and play. Ten years ago, apps would have been a secondary or complementary experience to toys. Today, it’s the opposite.
What this means is that toy companies are now becoming tech companies, a trend which echoes an even broader business trend. For example, Uber is a tech company that is disrupting the taxi industry whereas AirBnB, another tech company, is disrupting the hotel industry. This results from our increasingly connected world.
While perennial toy giants such as Mattel and Hasbro have seen their sales slip, it’s not a coincidence that Lego is thriving in large part because it has embraced digital media and gotten its brand into videogames through innovative collaborative ventures such as the hit Lego Star Wars series.
It’s the Skylanders franchise that kicked off the connected toy boom in 2011. The series has sold a staggering 250 million figurines. These toys are able to interact with Skylanders games on mobile devices and videogame consoles; this enables players to bring different characters (and their respective abilities) into the games via RFID (radio-frequency identification).
This marriage of physical and virtual worlds also makes sense for game companies seeing as toys make it possible to generate another source of revenue that can leverage long-standing beloved intellectual property. At the same time, these toys tie back in with the games through connectivity and allow for diversification, thereby directly promoting more software purchases. Nintendo has sold 10.5 million Amiibo figurines, creating a consumer frenzy and supply shortages every time new figurines are released.
Action figurines acting as little more than user account keys or data storage are just the start. Advances in augmented reality (AR) and virtual reality (VR) through devices such as the Oculus Rift and HoloLens will enable deeper connectivity and further the integration of toys into the gaming experience.
However, what sort of data will be collected (and potentially leaked) on our children? Is no place or activity safe from large corporations’ data collecting, processing and storing practices? What can be said of connected toys with built-in microphones and cameras? With the Internet of Things (IoT), we’ve become more and more used to connected objects in our everyday lives and any object that is connected is at risk of being hacked. For example, cybercriminals have already successfully hacked connected Android refrigerators and accessed their owners’ Gmail accounts.
And what do all these highly interactive screen-based experiences mean for children and their development? Is there a trade-off here? On the one hand, what will be the consequences of less imagination and fewer subsequent self-storytelling opportunities? On the other hand, can these interactive 3D worlds instead lead to improved spatial skills and problem solving?
Studies have shown the potential consequences of too much screen time and highlighted the need for time to take care of one’s inner self and engage in human interaction. “They [children] need time to daydream, deal with anxieties, process their thoughts and share them with parents, who can provide reassurance,” states Dr. Catherine Steiner-Adair, a Harvard-affiliated clinical psychologist.
As videogames become more prevalent on our connected devices, they are also spreading to the physical world. This first wave of connected toys is just the beginning.
However, while bridging the physical and virtual creates new opportunities, it also poses new questions as we continue to place increased emphasis and importance on screen-based experiences. As all roads once led to Rome, all experiences are increasingly leading to screens.
Posted in: Industry Transformations