Doll, Toy and Game Manufacturers NAICS 339930

Sep 3, 2025 - Toy Manufacturers Adjust Designs to Cut Costs

• According to a recent Reuters report, toy makers are lowering their costs in the face of rising tariffs by taking steps such as removing batteries from electronics playsets, reducing the number of accessories in toy kitchen sets, and reducing packaging. Tariffs on China imposed by the Trump administration have severely affected the toy industry, as 80% of toys sold in the US come from China. Amid tariffs, Mattel, for example, said in a recent earnings call that it “retooled and reimagined” its board games Candy Land and Operation as part of a larger initiative to overhaul its materials sourcing, manufacturing processes, designs, and packaging to assist with cost cuts. Toy maker MCA Entertainment is moving its supply chains out of China, while manufacturer Basic Fun! is offering retailers the option to remove batteries from electronic toy packages and reduce or remove its toys’ packaging in 2026.
• According to recently released Circana data, US toy sales rose 6% in the first half of 2025 and units sold were up 3%, an improvement over a lackluster performance in 2024. Average selling prices were up 3% in the first half of the year, notable as the average selling price has been flat for three consecutive years. The categories reporting the most growth during the period were puzzles and games (39%), explorative toys (19%), youth electronics (9%), action figures (8%), and building sets (7%). Sales of licensed toys were up 18% in the first half of 2025. Adults continue to drive growth for the market, with sales up 18% for recipients aged 18 and older. According to Juli Lennett, VP and toy industry advisor at Circana, “The toy industry is showing strength during this period as consumers are holding their breath and waiting for higher prices to kick in.”

• Indicators measuring the collective mood of US consumers showed a downward turn, with consumer confidence and consumer sentiment levels falling. Consumer confidence levels, an indicator of discretionary expenditures, declined in August 2025, month over month, falling by 1.3 points, according to the Consumer Confidence Index. Consumer confidence levels were lower in August, but remained similar to levels in the past three months, according to The Conference Board, which publishes the monthly index. August’s loss can be attributed to consumers under 35 years old while confidence levels rose for consumers over 55. In addition, the consumer sentiment index from the University of Michigan dropped in August 2025 for the first time in four months. The index fell to 58.2 in August data from 61.7 in July. Year-ahead inflation expectation results were higher monthly, as consumers convey lingering anxiety about prices amid tariff impacts. The index serves as a predictor of consumer spending as it indicates consumers’ perception of their financial prospects and the broader economy.
• The US doll, toy, and game manufacturers industry is projected to grow at a CAGR of 3.27% between 2025 and 2029, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. This rate is slower than the overall economy's anticipated growth. The durable goods manufacturing sector forecast indicates that the labor force is expected to diminish, barring immigration reform that allows greater numbers. A factor that may curb consumer spending is substantially higher tariffs on consumer goods, which may be painful for households. On a positive note, lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. Real income could suffer if average prices rise due to tariff implementation.