The Pokemon Go phenomenon that took over the world last month is a universal game changer in the toys and entertainment industry. It’s impact stretches beyond virtual reality games: The Pokemon Go Plus watch sold out in days, and, from the original price of $35 for the preorder, is now passing bids of $200 on EBay. Fans are now demanding a Pokemon Go app for the Apple Watch on Reddit and  The wearable, which vibrates when a Pokemon is nearby, started as a toy for children and young adults who grew up watching the Pokemon television series – but, thanks to demand, it transformed overnight into a luxury good. The attraction of smart toys crosses age and gender gaps; that demand, coupled with high sales, makes the smart toys industry a successful vertical for smart products – and the potential value keeps rising.

Smart toys for connected consumers

IoT wearables smart toys
Pokemon Go Plus. Image source:

27% of consumers have bought a smart toy product for themselves or as a gift, according to a survey by G2. That number includes smart toys purchased for both children and adults, which, like the Pokemon Go wearable, indicates how far the market for smart toys defies age brackets. More tellingly, in the same survey, 83% of consumers said they are “interested in purchasing a connected toy” in the near future.

smart toys and the smart connected toy market
The smart toys market is projected to surge in the next few years. Image source: released a study showing that 65% of surveyed parents would pay more for a smart connected toy, and nearly a quarter of parents would spend up to $80 for a connected toy. These results demonstrate that the market is already drawn to smart toys – but more importantly, they are willing to spend large sums of money for connected products.

The high demand for smart toys, and consumers’ eagerness to buy smart products spells opportunities for toy manufacturers and brands to optimize existing products to improve value and develop new business models.

A smart toy drives business value through analytics

Smart features and connectivity are driving new business value for toy manufacturers. In 2015, Juniper Researched forecasted that smart toy sales “would reach $2.8 billion” in revenue in 2015 alone, and pinpointed smart toys with connected apps as the “key market for toy vendors”. Another study estimates that the value of smart toys in 2020 will hit $8.4 billion. value of smart toys The leading value for manufacturers is ‘sensor-driven analytics’, i.e. sensors exchanging data with a smart device; this data supplies invaluable insight into user habits and enables toy companies to create new business models and further increase product value. In an interview with Seebo, Guy Orr, Director of Product Innovation at Mookie Toys, said that analytics from their latest smart toy “enables us to understand exactly how children play with the product” and thus “improve” the product to increase popularity, sales, and existing customer satisfaction.

“We can identify the benefits and the best features of the product”, he said. “This really helps us develop products in the future.” 



Product companies today rejuvenate established toy brands like the Cabbage Patch Kid through new smart product features, then aggregate data on user interaction – when and how children use the smart app, the average play interval, and other data – to optimize the smart toy while it’s on the market, suggest add-ons, and create new business values that didn’t exist with old-fashioned toys.

The internet of things is changing expectations from toys

If asked, probably most of the children (and adults) who purchased and use the Pokemon Go Plus watch have no idea what the Internet of Things is. Yet the wearable’s success is part of the wave of IoT products that have already set new standards within the industry. Children who grew up swiping smartphone screens before they could walk aren’t satisfied with traditional toys – and many toy companies and brands may soon find it difficult to increase revenue without smart, connected offerings in their product arsenal.

smart toys case study - how connected products boost sales

Zahava Dalin-Kaptzan

Zahava is a Content and Marketing Manager at Seebo and a writer who loves exploring new technologies through the written world.