AI Toys Market to Reach USD 641 Million by 2031 Top 20 Company Globally

The AI Toys industry blends traditional toy manufacturing with on-device intelligence, cloud-connected services, natural-language interaction, adaptive learning algorithms, and embedded sensors to create products that can teach, converse, play, and personalize experiences for children and families. In 2024
The global AI Toys market size is USD 361 million with a compound annual growth rate of 8.6% forecast to 2031, reaching market size USD 641 million by 2031. With an average selling price of USD 622 per unit, this pricing and market-size combination implies roughly 580,385 units sold globally in 2024. At a factory level the industry typically operates with a target gross margin around 20%, producing a factory gross profit of approximately USD 124.40 per unit and a cost of goods sold of roughly USD 497.60 per unit. A COGS breakdown is electronics and semiconductor modules, assembly & labor, cloud/software & AI model licensing, packaging & accessories and logistics/other direct costs. A single line full-machine production capacity is around 5,000 units per line per year. Downstream demand is concentrated in toy manufacturers and assemblers, retailers and e-commerce platforms, as well as end consumers ranging from children to educational institutions and tech enthusiasts.

Latest Trends and Technological Developments
The sector has seen both encouraging advances and cautionary events in recent months and years, illustrating the combination of rapid innovation and business model risk in AI-enabled hardware. In December 2024 the shutdown of Embodieds Moxie robot highlighted the vulnerability of high-cost, cloud-dependent AI toys when companies cannot sustain funding or long-term cloud support; the closure left owners with devices that relied on discontinued services. In 2025, major toy incumbents signalled deeper moves into AI: multinational companies such as Mattel have publicly explored collaborations with AI platform providers, indicating an industry shift toward partnerships that combine intellectual property and large-scale AI capability. Semiconductor supply chains and the race to provide low-power AI inference at the edge have become strategic battlegrounds for chip companies and toy makers, reflecting the industrys need to balance cost, latency and privacy by pushing more intelligence onto the device. In Asia, consumer appetite and manufacturing scale are accelerating growth and experimentation: Pop Marts expansion and consumer demand for character IP and connected experiences underscore how Asia firms are leveraging design, brand channels and retail concepts to scale smart play experiences globally. Finally, regional AI infrastructure and local language models such as Indonesias initiatives to build local-language AI ecosystems are opening new productization paths for toys that work well in local languages and cultural contexts.
BrightPath Learning Centers, a chain of educational childcare facilities in California, purchases 50 units of the Miko 3: Education & Play Smart Robot from Miko for a total amount of $7,500 USD. This procurement, at a unit cost of $150 USD, is part of their initiative to integrate AI-driven emotional and cognitive learning into their STEM curriculum, helping children engage with educational content through interactive conversation and play.

The "ROYBI AI-Powered Smart Toy" is being used by KinderCare Education in select locations across Texas as a personalized language learning tool. KinderCare invested approximately $20,000 USD to acquire a fleet of 100 ROYBI robots, at a unit cost of $200 USD, to provide one-on-one foreign language and early education lessons, leveraging its adaptive AI to cater to each child's individual learning pace and interests.

Asia remains the single most dynamic production and demand region for AI Toys, combining robust manufacturing capacity, concentration of component suppliers, and strong consumer adoption of connected devices. China in particular is both a manufacturing hub and a fast-growing market for smart toys, with many domestic firms scaling robot companions, educational AI devices and IP-driven collectibles. Japan and South Korea continue to push robotics and mechatronics strengths into premium AI Toy segments, while India and parts of Southeast Asia are emerging as high-growth consumer markets for value and educational offerings. Research and market coverage indicate that Asia Pacific growth rates for smart toys significantly outpace many Western markets as local parents prioritize STEM and tech literacy products alongside entertainment value.
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AI Toys by Type:
Educational Toys

Companion Toys

Other

AI Toys by Product Category:
Robotics

Wearable Toys

Other

AI Toys by Market Segment:
Voice Interaction

Visual Recognition

Motion Sensing

AI Toys by Material:
Plastic and Polymer Bodies

Silicone od Soft Polymer Skins

Electronic Components

Metalic Frames, Motor and Actuators

Others

AI Toys by Shape:
Humanoid Robots

Animal Shaped Toys

Vehicle Robots

Plush Toys

Others

AI Toys by Application:
Adult

Children

Global Top 20 Key Companies in the AI Toys Market
Curio

Groove X

Mirumi

Enchanted Tools

Tombot

Miko

Yukai Engineering

Vanguard Industries

FoloToy

Beijing Meng Friend Technology

Zhejiang Jinke Tom Culture Industry

Shanghai Jianmo Technology

Shanghai Luobo Intelligent Technology

Shanghai Soul Companion Technology

Haivivi

Alpha Group

TCL

Shenzhen Elephant Robotics Technology

Shifeng Cultural Development

Mattel

Regional Insights
Within Southeast Asia, market dynamics are heterogeneous: Indonesia, Thailand, Vietnam, Malaysia and the Philippines show increasing online adoption and a rising middle class that values educational tech toys for early childhood learning. Indonesias nascent but fast-maturing AI ecosystem and local language model initiatives are enabling locally-relevant voice and conversational features for toys, while regional trade shows and exposmany hosted in Jakarta and Singaporeare accelerating distribution partnerships and cross-border OEM opportunities. Urban centers in ASEAN favor mid-priced AI Toys priced for aspirational parents, while affordability remains the primary barrier outside major metropolitan areas. The region also benefits from shorter regional supply chains to China and electronics suppliers, which helps reduce lead times for new product iterations.

AI Toys face a distinct set of challenges beyond those of traditional toy manufacture. Hardware startups encounter steep capital intensity for R&D and manufacturing, while their business models often depend on ongoing cloud services and content updates that raise lifetime service obligations as the Moxie case demonstrated, this can create customer and reputational risks when service economics fail. Regulatory and privacy scrutiny over childrens data, especially voice and interaction logs, is increasing across jurisdictions and requires robust design-for-privacy and compliance programs. Cost control is another challenge because high-value sensors, custom inference chips and warranty/service obligations push per-unit COGS upward, pressuring margin unless volumes and cost-efficient supply chains scale quickly. Finally, product trust and safety are non-negotiable; any publicized failure can sharply slow adoption in family markets.

Winning strategies cluster around three priorities: first, platform partnerships that combine recognized IP and proven AI providers to reduce in-house AI development burden while preserving product differentiation and data governance; second, modular hardware designs that let manufacturers offer product tiers (basic offline smart features vs. premium connected services) to broaden addressable segments; third, localization investing in language, curriculum alignment and cultural content for Asia and ASEAN markets can create defensible regional moats. Supply-chain playbooks that bring components closer to assembly, coupled with selective use of contract manufacturing to scale, shorten time-to-market and protect margins. Companies should also design subscription and content models carefully to balance annuity revenue with long-term customer trust and regulatory compliance.

Product Models
AI Toys are interactive play products embedded with artificial intelligence technologies such as voice recognition, adaptive learning, motion sensing, and emotional response systems. These toys are designed to enhance learning, creativity, and companionship through personalized interactions and intelligent behavior.
Educational AI Toys integrate artificial intelligence to teach and engage children in learning through play. They adapt to a childs pace, track progress, and personalize lessons in subjects such as language, math, and coding. Notable products include:
Cozmo Anki: A small AI robot that teaches coding and problem-solving through interactive games.
Miko 3 Miko: An AI robot that interacts conversationally while teaching general knowledge and emotional intelligence.
Woobo Woobo Inc.: An educational plush toy that answers kids questions and tells interactive stories.
Albert Coding Robot SK Telecom: Teaches basic programming and math through fun physical coding exercises.
ClicBot KEYi Tech: A modular robot that teaches logic and STEM concepts through motion and coding activities
Companion AI Toys are designed to provide emotional interaction, comfort, and social engagement. They use AI to simulate empathy, recognize speech and faces, and respond in natural waysserving as playmates or comfort companions. Examples include:
Vector Anki (Digital Dream Labs): A responsive AI robot that recognizes faces, answers questions, and shows personality.
Loona KEYi Tech: A lively pet-like AI robot with expressive animations and autonomous movement.
Qoobo Yukai Engineering: A soft robotic cushion with a wagging tail that provides calming companionship.
Tombot Jennie Tombot: A realistic robotic dog designed for emotional support and companionship, especially for seniors.
Sony Aibo Sony Corporation: A robotic dog that learns its owners habits and emotions over time.

The AI Toys industry sits at the intersection of hardware manufacturing, edge AI, educational content and consumer entertainment. With a 2024 base of USD 361 million and an 8.6% CAGR through 2031, the market presents a moderate-risk, growth opportunity driven primarily by Asia and Southeast Asias combination of consumer demand, manufacturing scale, and emerging local AI capabilities. Success requires careful product economics, disciplined lifetime service models, strong privacy and safety practices, and regional product localization. The sector will reward companies that can balance attractive unit economics with scalable cloud or on-device intelligence while maintaining trust with parents and regulators.

Investor Analysis
This report matters because it synthesizes the unit economics, regional growth drivers, competitive landscape and risk factors investors need to evaluate opportunities in AI Toys. What investors should focus on includes: unit economics and margin sustainability (price per unit versus COGS and required service costs), the companys approach to cloud vs. edge AI (which affects recurring costs and regulatory exposure), and regional product-market fit (particularly localization for Asia and ASEAN). How investors can use this: prioritize targets with clear path to scale production (single-line capacity and established contract manufacturing), diversified downstream revenue (product sales plus content/subscription), and demonstrated privacy-by-design. Why this matters companies that nail that trio reduce capital intensity per growth dollar, increase predictability of cash flows, and are better positioned to capture share as Asia and ASEAN households upgrade toward smarter, education-oriented toys.
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5 Reasons to Buy This Report
It provides unit-level economics tied to market size and pricing so buyers can model factory margins and COGS impacts.
It includes Asia and ASEAN regional detail that investors and OEMs need for market prioritization.
It summarizes the most recent industry events and product-level risks that affect valuations and exit prospects.
It lists the top competitive players and strategic approaches to help identify potential M&A or partnership targets.
It gives a pragmatic set of strategic recommendations for product, supply-chain and monetization choices that directly impact investor return profiles.
5 Key Questions Answered
What is the 2024 market size, unit volume and average selling price for AI Toys?
How do factory gross margin, COGS per unit and typical cost breakdown affect profitability?
Which regions especially in Asia and ASEAN are the fastest adoption and production hubs?
What practical business model and product strategies reduce the risk of service-dependent product failures?
Who are the principal incumbents and notable challengers shaping the competitive landscape today?
Chapter Outline
Chapter 1: Introduces the report scope of the report, executive summary of different market segments (by region, product type, application, etc), including the market size of each market segment, future development potential, and so on. It offers a high-level view of the current state of the market and its likely evolution in the short to mid-term, and long term.
Chapter 2: key insights, key emerging trends, etc.
Chapter 3: Manufacturers competitive analysis, detailed analysis of the product manufacturers competitive landscape, price, sales and revenue market share, latest development plan, merger, and acquisition information, etc.
Chapter 4: Provides profiles of key players, introducing the basic situation of the main companies in the market in detail, including product sales, revenue, price, gross margin, product introduction, recent development, etc.
Chapter 5 & 6: Sales, revenue of the product in regional level and country level. It provides a quantitative analysis of the market size and development potential of each region and its main countries and introduces the market development, future development prospects, market space, and market size of each country in the world.
Chapter 7: Provides the analysis of various market segments by Type, covering the market size and development potential of each market segment, to help readers find the blue ocean market in different market segments.
Chapter 8: Provides the analysis of various market segments by Application, covering the market size and development potential of each market segment, to help readers find the blue ocean market in different downstream markets.
Chapter 9: Analysis of industrial chain, including the upstream and downstream of the industry.
Chapter 10: The main points and conclusions of the report.

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