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Toys and Games in Canada

Canada toys market: Weak performance witnessed durig 2012


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2014-01-21 22:41:02 - Toys and Games in Canada - a new market research report on companiesandmarkets.com

Overall, toys and games in Canada saw a weak performance in 2012 in current value terms due to facing a number of challenges. In traditional toys and games, unfavourable demographic trends resulting in fewer children continue to undermine the core customer base for many product categories, leading to a variety of strategies in product development and marketing. In video games, hardware sales as well as video games software continued to battle growing online and mobile gaming, which also increasingly featured free content.

Digital gaming saw the highest value sales growth in current terms in 2012. Growth in the use of smartphones and tablets, and the resulting surge in the number of mobile apps, including games with no or low-cost access, are

 

 

the key factors driving the rise in digital games. This increase comes at the expense of console and PC gamers in Canada. Hand-held consoles are particularly vulnerable, with disappointing results shown by 2012 releases of Nintendo of Canada´s 3DS and Sony´s PS Vita.

Overall, retail sales of toys and games in Canada had a significant presence in 2012, with a degree of consolidation between large international and domestic players, including Hasbro Canada and Mattel Canada in traditional toys and games, and Microsoft Canada, Nintendo of Canada and Activision Blizzard in video games. A number of smaller manufacturers, however, made significant inroads into Canada, such as the Canadian-based Mega Brands and its successful presence in construction toys, not least through successful licensing deals to support and expand its product lines (such as the first construction sets designed for girls under the Barbie name) and the US-based Melissa & Doug brand in arts and crafts.

Retail competition in Canadian toys and games heated up over the review period, with a degree of polarisation between specialised retailers focusing on quality and customer service/knowledgeable staff and high-sales retailers emphasising value and price, among other things. Competition has further intensified with the expansion of internet retailing, including mobile commerce and a rise in Canadian online-only retailers, such as shop.ca. The trend towards more online purchases led to a variety of strategies by leading retailers, including a wider range of online products in comparison to physical stores by retailers, such as Toys "R" Us, the launch of a virtual popup shop by Walmart Canada in collaboration with Mattel Canada in a Toronto subway, and the expansion of established online retailers, such as Amazon.ca (the Canadian arm of Amazon.com) into toys and games.

Over the forecast period, value sales of toys and games are expected to see only modest growth in constant terms, as the industry will continue to face a number of challenges. These will include changes in its customer base (low birth rates and earlier moves by children towards more advanced gaming), strong price competition with the expansion of online retail and the entry of Target into Canada, as well as competition from free online and mobile gaming in video games. Manufacturers and retailers are expected to continue to implement a variety of strategies to expand their customer bases (eg appeal to older children and adults, link traditional toys to the digital world and build licensing partnership in traditional toys and games) and to drive customer traffic towards video games by focusing on digital gaming.

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