Australia toys market seen reaching $3.12 billion by 2034

By AI, Created 4:37 PM UTC, May 18, 2026, /AGP/ – Australia’s toy market is projected to grow from $2.35 billion in 2025 to $3.12 billion by 2034, fueled by STEM-focused products, licensed local content, online retail growth and AI-enabled play. The shift is also reshaping competition as Toys ‘R’ Us Australia exits, major brands lock in new licensing deals and sustainability becomes a bigger buying factor.

Why it matters: - Australia’s toy market is moving toward higher-value categories that blend education, technology and entertainment. - The market’s projected rise from USD 2.35 billion in 2025 to USD 3.12 billion by 2034 signals steady demand, even as retail channels and product formats shift. - The mix of STEM toys, licensed local characters, collectibles and smart toys is changing what sells and who captures growth.

What happened: - The Australia toys market reached USD 2,352.4 million in 2025 and is forecast to hit USD 3,122.8 million by 2034. - IMARC Group said the market is expected to grow at a 3.10% CAGR from 2026 to 2034. - Online retail accounted for 35.13% of category revenue in 2025. - Smart toys with AI are projected to post an 11.43% CAGR through 2031. - Educational and STEM toys are projected to grow at a 5.12% CAGR through 2031. - New South Wales held the largest regional share in 2025 at 29.85%. - Queensland is projected to be the fastest-growing state market, with a 5.95% CAGR.

The details: - Bluey, The Wiggles and Play School are driving premium shelf space and strong sales across action figures, plush, games and apparel. - Online toy sales rose more than 15% year over year as demand climbed for hybrid digital-physical toys, collectible figures and omnichannel shopping. - Collectibles are growing through blind box formats, limited-edition releases and surprise packaging that appeal to Gen Z and Millennial consumers. - Domestic brands such as Moose Toys and ZURU are using cross-platform storytelling to extend product life and audience reach. - Toys Australia pledged in January 2025 to shift 40% of its portfolio to fully recyclable and biodegradable materials by late 2026. - Happy Planet Toys is gaining traction with locally produced recycled-plastic toys. - The national toy association partnered with leading educational institutions to roll out STEM-based toy kits across 500 primary schools. - Key companies in the market include Hasbro, Jazwares LLC, Mattel, Moose Toys, The LEGO Group, Windmill Toys and ZURU Toys.

Between the lines: - The market is shifting away from pure novelty and toward products that offer learning value, digital engagement and repeat play. - The collapse of Toys ‘R’ Us Australia in mid-2025 released nearly USD 30 million in sales that competitors quickly absorbed, underscoring how fast channel share can move in this category. - LEGO’s multi-year partnership with The Pokémon Company International, announced in March 2025, points to continued demand for licensed building sets. - Mattel’s licensing rights for DC-themed action figures and its renewed Disney deal show how major brands are leaning harder into franchise-driven sales. - AI is becoming a competitive tool not just in toys, but also in forecasting, safety inspection, personalization and marketing.

What’s next: - LEGO Pokémon sets are set to launch in 2026. - Mattel’s Australian shipments of DC-themed action figures are expected to begin in the second half of 2026. - Toys Australia aims to reach its 40% recyclable and biodegradable portfolio target by late 2026. - Educational toy adoption is likely to keep rising as government STEM funding and classroom partnerships expand. - Online retail should continue gaining share as retailers push personalized shopping and hybrid play products.

The bottom line: - Australia’s toy market is growing modestly, but its profit pools are shifting fast toward educational, licensed, digital and sustainable products.