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.

Aug 24, 2026 - Michaels Tests Experiential Store Format

• 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.
• 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.
• Sporting goods, hobby, music, and book stores underperformed the broader US retail sector in July 2026, with sales down 0.47% month over month and 3.01% year over year, according to the CNBC/NRF Retail Monitor powered by Affinity Solutions.. By comparison, total retail sales excluding autos and gasoline rose 0.32% monthly and 5.15% annually, while core retail sales increased 0.3% and 4.72%, respectively. The segment was the weakest of the nine major categories on a year-over-year basis. Building and garden supply stores were the only other category to decline annually, down 1.2%. In contrast, electronics and appliances (+12.04%), digital products (+12.02%), health and personal care (+10.07%), general merchandise (+8.3%), and clothing (+6.55%) posted strong gains. The results suggest consumers remained selective, with spending shifting toward other discretionary and value-oriented categories.
• The US toy industry is ramping up lobbying efforts as tariffs and new regulations threaten to raise costs and disrupt planning, according to Legis1 News reporting. With more than 80% of toys produced in China, tariffs are driving supply chain expenses higher. The Toy Association spent $180,000 in Q1 2026 and about $1.23 million over the past year advocating for relief. At the same time, uncertainty around tariffs is complicating holiday inventory decisions, while new AI safety concerns and updated children’s privacy rules add compliance burdens. Together, these pressures could squeeze margins and create operational challenges, particularly for smaller US toy businesses.

Industry size & Structure

The average hobby, toy, or game store operates out of a single location, employs about 24 workers, and generates $4.1 million annually.

• The hobby, toy, and game store industry consists of about 5,100 firms that employ 125,000 workers and generates about $21 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.