Toy Industry Faces New Rules as Brands Adapt to Changing Trends

Toy Fair 2026 showcases how toymakers are navigating shifting consumer demands and new licensing opportunities

Published on Feb. 16, 2026

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As the toy industry gathers for the annual New York Toy Fair, toymakers are grappling with a rapidly evolving landscape. While the U.S. toy market rebounded in 2025, companies are facing new challenges and opportunities, from the explosive growth of trading card games to the increasing importance of intergenerational appeal. Brands are rethinking their strategies to cater to both kids and adult "kidadults," while also leveraging hot licensing properties like KPop Demon Hunters. The event highlights how the toy industry is playing by a new set of rules to stay relevant and capture consumer attention.

Why it matters

The toy industry's performance and adaptation to changing consumer trends have broader implications for the retail and entertainment sectors. As traditional toy categories decline, the rise of trading cards, collectibles, and intergenerational play underscores the evolving nature of how people, both young and old, engage with toys and games. Toy Fair 2026 provides a window into how major brands and upstart companies are navigating this shifting landscape to stay competitive.

The details

Toy industry leaders are grappling with questions around how to appeal to both kids and adult "kidadults," leverage hot licensing properties like KPop Demon Hunters, and capitalize on the explosive growth of trading card games. Major toymakers like Hasbro and Mattel are showcasing new lines tied to entertainment franchises, while also expanding into intergenerational products. Smaller companies like Sky Castle Toys are focusing on building strong social media presences to drive toy trends. The event also features longtime brands like Lionel Trains adapting their classic products for modern consumers.

  • Toy Fair 2026 opened on Saturday, February 14 and runs through Tuesday, February 17.
  • The U.S. toy industry saw a 6% sales increase in 2025, rebounding from declines in 2023 and flat performance in 2024.

The players

Hasbro

One of the two largest U.S. toy manufacturers, reporting a 14% full-year sales gain in 2025.

Mattel

The other major U.S. toy company, reporting a 1% decline in full-year net sales in 2025 despite a 7% fourth-quarter increase.

Kayou

A Chinese trading card company that is the top seller in that market and is exhibiting at Toy Fair for the first time, having launched a U.S. version of its My Little Pony trading card game.

Sky Castle Toys

An upstart toy company that saw its Sticki Rolls collectible stickers become a top girls' toy in 2025, crediting its focus on YouTube content creation as key to its success.

Lionel Trains

A classic toy brand that has been exhibiting at the New York Toy Fair since 1903, now updating its iconic electric trains with modern digital controls.

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What they’re saying

“We are the beneficiaries of being in a toy era with significant demand from both kids and adults. As a result we develop an array of owned and licensed brands that specialize in each age, stage, and development cycle from preschool to adult collector.”

— Jeremy Padawer, Chief Brand Officer, Jazwares (Forbes)

“The future is YouTube. All the kids live on YouTube. The days of Saturday morning TV shows and TV ads - those days are gone.”

— Josh Loerzel, Co-founder, Sky Castle Toys (Forbes)

What’s next

Toy Fair attendees will be closely watching to see if the industry's momentum from 2025 carries over into 2026, and whether new licensing deals and product innovations can drive further growth.

The takeaway

The toy industry is undergoing a significant transformation, with brands adapting to cater to both kids and adult "kidadults," leveraging hot licensing properties, and capitalizing on the explosive growth of trading card games. This shift underscores the evolving nature of how people engage with toys and games, and the need for toymakers to stay nimble and innovative to remain competitive.