Despite the challenges of 2025, the U.S. toy industry returned to growth last year, a welcome improvement following two years of lackluster results.
According to Circana, the industry scored wins across all three major metrics: total annual dollar sales grew by 6%, average selling price spiked by 4%, and units sold increased by 3%. Compared to 2020, U.S. toy sales are up 16%, equivalent to a 3% compound annual growth rate (CAGR) over the past five years.
Following a flat performance in 2024, the U.S. toy industry regained its footing in 2025, fueled by renewed consumer demand and a clear shift toward higher‑value purchases. The return of unit growth alongside price growth signals a healthier market, with licensed, collectible, and fandom‑driven toys continuing to outperform. At the same time, 2025 highlighted a growing polarization between value‑focused purchases and premium offerings, underscoring the importance of innovation and entertainment tie‑ins as key drivers of demand.”
A Few Categories Contribute 92% of Growth
Six of the 11 supercategories tracked by Circana charted growth last year. Games & Puzzles led the charge with a 37% spike driven primarily by Pokémon. Building sets raced to a 15% increase driven by licensed properties, including Formula 1. Meanwhile, Explorative & Other Toys spiked 20% led by strong demand for trading cards. Combined, these three categories contributed 92% of the U.S. toy industry’s growth in 2025.
Circana says that Outdoor & Sports Toys, Plush, and Dolls saw the steepest declines.
Entertainment, sports, and gaming licenses kept the engine running in 2025, proving once again that fandom drives the toy aisle. Licensed IP dominated, with Pokémon leading the charge with $2.5 billion in U.S. toy sales, up a staggering 87% year over year, becoming the first property in at least two decades to crack the $2 billion mark in a single year. Overall, six of the top 10 toy properties posted growth, fueled by entertainment tie-ins, sports licensing, and video game franchises that translated buzz into baskets.
At the same time, shoppers showed they were willing to trade up. Higher price points gained momentum as consumers spent more per item, even as entry-level and mid-priced toys softened. Products priced between $30 and $69.99 surged 18% year over year, while toys priced $20 and above captured nearly four additional points of dollar share. Meanwhile, lower-priced items under $5 and the $15–19.99 range saw the sharpest pullback.
“The U.S. toy industry enters 2026 with solid momentum, supported by licensing, collectibles, and a strong content pipeline, but with meaningful uncertainties ahead,” Lennett adds. “While tariffs have not yet materially impacted prices for consumers, their downstream effects remain unpredictable, layered with other factors such as inflation, credit pressure, and consumer confidence shaping discretionary spending. The brands best positioned to win will be those that activate demand through licensing and innovation, balance fandom with evergreen play, create emotional resonance with consumers, and build communities that turn enthusiasm into sustained demand.”
Look for further insights from Circana’s Juli Lennett in the 2026 edition of The BIG Toy Book, available February 14.
