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IDATE estimates that by 2020, nearly 660 million smart toys could be sold, generating estimated revenues of 3.8 billion EUR, or 10.8% of the video game market by this date. There are still many fantasy worlds as yet untapped and therefore represent promising avenues for growth. The success of the smart toys video game segment is based on familiar universes that already have an audience of fans. The success of LEGO shows that convergence between toy manufacturers and video game companies is effective and can lead to AAA toys built around AAA video games. There is a clear dichotomy between 'mainstream' smart toys, produced by industry giants for fixed and visible platforms on the big screen, and new entrants offering their solutions on mobile platforms, where the barriers to entry are not so high. These operating models still leave little room for new entrants. Development models are primarily based on a so-called 'first party' or 'second party' approach. Business models based on the collection of figurines, dependent on video games to varying extents, continue to evolve and could incorporate Free-to-Play.
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This has given rise to the term 'phygital' to describe the experience. The 'user experience' is central to the smart toy phenomenon, combining tangible objects - which may or may not be connected - with digital entertainment applications. The main lessons learned from events in 2015 reflect the challenges faced and the successes achieved. Other industry players, toy manufacturers and video game publishers, such as Hasbro and Mattel, are still at the trial phase or performing 'market tests'. Four industry players comprise the bulk of the market: Activision Blizzard with its Skylanders series, which has sold nearly 300 million figurines worldwide (8 games published since 2011) Disney Games with Disney Infinity, which brings to life its own characters and the universes of its subsidiaries: Pixar, Marvel, Star Wars Nintendo, which offers 'amiibo' figurines of its most popular characters (more than 10.5 million figurines sold in six months) At the end of 2015, LEGO gatecrashed the market with LEGO Dimensions and, after experimenting with smart toys with an earlier product called LEGO Fusion, its entrance was successful. Smart toys now constitute a new market segment, halfway between the video game and toy industries. Smart toys are creating a new form of entertainment without really breaking with the function of toys or that of video games, and are at least as immersive as the two pastimes in their own right. The 'smart toys' or 'toys-to-life' phenomenon is generating a lot of interest because of its massive and rapid success.
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