Hobby, Toy and Game Stores

The 5,100 companies in the US sell new toys, games, and hobby and craft products. Large firms and many small firms may engage in online sales in additiol to brick-and-mortar retailing. Companies may offer a broad selection of merchandise or specialize in an area, such as educational toys, model trains, or scrapbooking supplies. In the video game retail category, firms may sell used merchandise or offer trade-in programs.

Seasonality of Sales

The fourth quarter is critical for toy and game stores and extremely important for hobby stores.

Competition from Online Retail

The advent of online retail has fundamentally altered the toy and video game markets.

Oct 19, 2026 - Toy Imports Could Benefit From Proposed Tariff Relief

• US toy retailers could benefit from lower import costs under a new US-China trade framework, according to an October 5, 2026, update from The Toy Association. Toys and playing cards were identified as products potentially eligible for preferential tariff treatment, with toys accounting for approximately $9.8 billion of the $30 billion in 2025 imports covered by the US list. However, tariff reductions cannot take effect until the US Trade Representative completes a required public comment process, and implementation details remain uncertain. For US toy and hobby stores, lower tariffs could eventually reduce wholesale acquisition costs, improve margins, and support more competitive holiday pricing. Retailers should nevertheless avoid assuming immediate cost reductions when making purchasing decisions because existing duties remain in place pending further action.
• Toys “R” Us plans to open 120 additional standalone stores in the US during the 2026 holiday season, bringing its standalone store count to approximately 160, according to a September report from The Toy Book. The expansion, undertaken with Go! Retail Group, emphasizes toy discovery, collectibles, and in-store shopping experiences. The investment signals renewed interest in physical toy retailing despite competition from major mass merchants and e-commerce platforms. For US hobby, toy, and game stores, the expansion could create additional competition for holiday spending, particularly in markets gaining new locations. Independent retailers may need to differentiate themselves through specialized merchandise, knowledgeable service, community events, and exclusive products.
• The US toy and game retail sector entered the second half of 2026 with strong momentum, as first-half dollar sales rose 17%, unit sales increased 12%, and average selling prices gained 4%, according to the latest Circana data. Growth was broad, with eight of 11 toy supercategories posting gains. Explorative & Other Toys led with 58% growth, followed by Games & Puzzles (+45%), driven heavily by trading cards and collectibles. Building Sets (+22%), Arts & Crafts (+20%), and Action Figures & Accessories (+10%) also posted healthy gains. Licensed toys rose 24% and accounted for 39% of total sales, helped by sports properties including FIFA, MLB, NFL, and NBA. Retailers are benefiting from expanding demand among older consumers: adult toy sales rose 25% and teen sales 33%. The outlook is favorable, though tariffs, inflation, and affordability pressures could temper holiday growth.
• Michaels’ new concept stores could raise the competitive bar for US hobby retailers by shifting the store experience from traditional product merchandising toward specialized, hands-on “shopping worlds,” according to a report in The Toy Book. The format, now being tested in Arkansas, Ohio, and Texas, creates dedicated areas for knitting and sewing, floral, framing, fine arts, kids’ crafts, parties, seasonal décor, and viral trends, including a Pinterest Trend Bar, Balloon Bar, and upgraded event space. The goal is to make stores more inspirational, experiential, and community-oriented, while encouraging customers to spend more time in-store and shop across more categories. Michaels plans additional rollouts during 2026. For hobby stores, the model could intensify competition for family, craft, and activity spending and push rivals toward more curated assortments, workshops, events, trend-driven merchandising, and other experiential features that are harder to replicate online.

Industry size & Structure

The average hobby, toy, or game store operates out of a single location, employs about 20 workers, and generates $3.5 million annually.

• The hobby, toy, and game store industry consists of about 5,100 firms that employ 106,000 workers and generates about $18 billion annually.
• The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 70% of industry revenue.
• Large firms include Toys ‘R’ Us (owned by WHP Global), Gamestop, Michaels, and Hobby Lobby. Large chains may have locations outside of the US.