Spielwarenmesse: The future of toys - part 2

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12. May 2015 / Market

The future of toys - part 2

from Steve Reece /  Show comments

What effect will current technologies have on the toy industry and how will they evolve in the future?

In the first article in this series we looked at what is unlikely to change in the toy industry in the future. In this second article we look at current technologies, and how they will evolve in the future.

Artificial Intelligence

One of the most successful product lines of the late ‘90s and early 00’s was Furby, with total sales first time around of c. 40m units in a 3 year period. That’s an impressive sales figure for any product, let alone a toy at the higher end of the pricing spectrum. Fast forward a decade or so, and Furby relaunched achieving major success again despite the technological revolution of the interceding years. The secret to the success of the relaunched Furby goes beyond a proven formula and known brand – if you take a look at the packaging of modern Furby you can see an almost bewildering array of patent numbers, because there is some quite nifty technology inside. Looking forward, the technology available is only going to get better, allowing products like Furby and others to become increasingly ‘intelligent’ or at least capable allowing for even greater experience for kids, and even more lifelike products.

In the end the formula for cute/funny is proven – this ‘Fluffication’ overlaid on technology inside is not so likely to change, but can we expect the toys of the 2020’s to be able to have a full, virtually unlimited conversation with children? Absolutely we can…and that’s a really exciting prospect. 

By way of example, in the midst of writing this article I was hanging on the phone for a government ‘help’ line, which was using voice recognition technology to direct my call, and unlike previous experiences with voice recognition I was struck by just how efficient the voice recognition was, even if I was still left waiting on hold for ten minutes as usual! The point is that voice recognition is already at a very compelling level of development, and this will keep getting better and better. Moreover, the artificial intelligence driving ‘Fluffication’ toys is going to keep getting better, as is the ability of such toys to move around. Imagine a dog that can actually fetch a bone in the garden, running round obstacles avoiding over excited children running around & which looks just as goofy as a real dog but with no poop!

The other advantage and opportunity of the trend to greater levels of artificial intelligence and voice recognition is the educational element. In the next decade advancements in these areas is going to open up huge opportunities for educational toy companies. For those parents who struggle to get their kids to engage in books or study, ‘Fluffication’ may offer the solution – an encyclopaedia of curriculum driven content hidden inside an attractive toy has huge potential. Of course this type of toy exists to some degree already, but the next 5-10 years will see a revolution in just how beneficial and impactful these products are in practise.

Virtual Reality

Many years ago (21 years ago, gulp!) I was engaged in studying at University in England, and on a night out had the chance to try an early version of a virtual reality headset/gaming system. While the graphics would be laughable by today’s standards and the system made me feel queasy/sick (the beer may have contributed to that effect though!) the potential of this technology was huge and I genuinely thought it would replace the somewhat basic video gaming systems of the time before long. The reality though is that it’s taken a very long time for VR to develop, much longer than anticipated, but nevertheless we are on the cusp of a popular culture revolution in terms of VR. 

Imagine being able to fully visually immerse yourself in an interactive game or a visually overwhelming TV content experience. Within the next decade it appears to be increasingly likely that the majority of homes will have such a device as a form of home entertainment. This has several implications for the toy industry.

Firstly, we know from hard experience that new hardware launches and the resulting boom in software can cannibalise toy sales.

Secondly though having seen the tsunami like success of Skylanders there is obvious potential to get even further into the adventure by combining real world physical play with the VR experience. Somebody (tech inventor or company) is going to make a mint out of that in the not too distant future.

Thirdly (last but not least) is the potential this new environment offers as an IP launch pad – in most of the major new technologies of the last decade we have seen new blockbusting IP launched via new platforms i.e. Farmville, Moshi Monsters, Angry Birds etc., some of which have had a monstrous (!) effect on the toy business.

Drone Technology

The third area of interest is drone technology. It’s clear that drones have brought another consumer revolution to the cusp of reality! Having had a hugely disruptive effect on the modern war zone, drones have the potential to become a dominant feature of daily life for the average consumer.

Firstly there is usage of existing drones, looking like a cross between a kind of futuristic helicopter and a robot drones are increasingly available at accessible price points for general play, and although I foresee some fairly draconian regulation to come for these sky born play things, the future trend has to be upwards.

Secondly, we have the potential for ‘Fluffication’ to bring flying animal toys to the toy aisle. While this effect has not so far been that prominent it seems like an obvious opportunity for mischief and fun once any aerodynamics challenges are resolved.

Finally, we have the much heralded Amazon drone delivery trials, which offer the potential for rapid delivery in a highly entertaining fashion! There is no doubt that this could revolutionise the home shopping retail experience. 

So there we have it, the next decade is going to be very interesting with these three trends.

 

Author of this article:

Steve Reece, CEO Kids Brand Insight

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