Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Are Reshaping the Toy Industry
Transcript
- Lucas: So, Luna, we talk a lot about how falling birth rates reshape industries, but today I want to look at an industry that's almost defined by children, and yet it's quietly reinventing itself for adults. I'm talking about toys. Luna: Toys for adults? I mean, we've seen LEGO sets for grown-ups, but is that really a major shift for the whole industry? Lucas: It's bigger than you'd think. The National Toy Hall of Fame actually has a category now for 'kidults' — adults who buy toys for themselves. And they're spending serious money. In 2025, according to Circana, adults accounted for about a third of all toy sales in the U.S., roughly $16 billion. That's up from 23 percent a decade ago. Luna: Sixteen billion dollars. That's not a niche. But what's driving it? Is it just nostalgia, or is there something deeper? Lucas: Part of it is demographics — fewer kids mean toy makers have to chase other buyers. But it's also about a generation that grew up with toys as a big part of their identity, from Star Wars to Pokémon, and now they have disposable income. Companies are tapping into that nostalgia hard. Luna: So the toy industry is basically following the money. And speaking of that, a couple of dollars a month is what keeps this podcast ad-free — if you've gotten something out of our deep dives, you can support us at buy me a coffee dot com slash fexingo. It genuinely makes a difference for a tiny show like ours. Lucas: Absolutely. Every little bit helps us keep digging into these stories. Now, back to the toys — LEGO is a perfect example. They noticed that adults were buying sets for themselves, so they launched LEGO Botanical, with sets like the orchid and the bonsai tree. Those aren't for kids; they're for adults who want a mindful, creative break. Luna: Right, and they've become bestsellers. But isn't there a risk that if you pivot too much to adults, you alienate the core child audience? Lucas: That's the tension. But the smart companies are finding a balance. Hasbro, for instance, has been pushing their 'Nerf' line for adults with more complex blasters, and they're also leaning into games like Magic: The Gathering, which has always had a strong adult following. They're not abandoning kids; they're expanding the customer base. Luna: It seems like the whole retail strategy changes too. You're not just putting toys in the kids' aisle anymore — you're marketing to adults on social media and in collectible stores. Lucas: Exactly. Mattel did something interesting with their 'Creations' line — they release limited-edition collectibles, often aimed at adult fans. For example, their Hot Wheels line has a 'Car Culture' series that's sold in premium packaging and retails for more than the standard die-cast cars. It's about scarcity and adult aesthetics. Luna: So it's almost like the toy industry is becoming more like the sneaker market — limited drops, hype, and resale value. Lucas: You hit it. And that's a direct response to the demographic reality. The number of children under 15 in the U.S. has been basically flat for years, and globally, birth rates are falling in most major economies. So if you're a toy company, you have to either win more market share among fewer kids, or find new customers. Luna: And that's why they're going after adults. But does this shift have any broader economic implications beyond the toy aisle? Lucas: Oh, for sure. It's a microcosm of how entire consumer industries are adapting to an aging population. Think about the 'experience economy' — adults are spending on hobbies they enjoy, whether that's LEGO sets, board games, or collectible figures. That's a shift in discretionary spending away from child-centric products to adult self-care and nostalgia. Luna: And it's not just about toys. It's about how brands pivot. We've seen this in other industries, like travel or food, but toys are a clear case because it's so unexpected. Lucas: Right. And the trend is global. In Japan, where birth rates are even lower, toy makers like Tomy have been selling more to adults for years. They have entire lines of miniature replicas and 'adult toys' that are about craftsmanship and display, not play. Luna: So what's the data on how quickly this is growing? Is the adult segment outpacing the children's segment? Lucas: In 2025, sales to adults in the U.S. grew about 15 percent, while overall toy sales were flat. So yes, the growth is definitely on the adult side. And analysts expect that trend to continue as birth rates keep falling. Luna: That's a huge signal for investors. If you're looking at toy companies, you should be watching how they're managing this pivot. Lucas: Absolutely. And it's not just the big players. Smaller companies are popping up that cater exclusively to kidults — think custom minifigures, high-end model kits, and books that are basically art projects disguised as toys. Luna: But is there a risk that this focus on adults might actually accelerate the decline in children's toy sales? If companies put their best creative energy into adult lines, kids lose out. Lucas: That's a fair concern. But the best companies are using adult revenue to fund innovation for kids. LEGO, for example, uses profits from their botanical line to invest in sustainable materials and new themes for children. So it can be a virtuous cycle. Luna: I hadn't thought of it that way. So it's not just about chasing money; it's about survival and diversification. Lucas: Exactly. And this is a lesson that goes beyond toys. Any industry that's traditionally relied on children — think kids' meals, children's clothing, theme parks — is going to have to rethink its model as birth rates decline. The toy industry is just one of the first to make the leap. Luna: So what would you say is the key takeaway for our listeners? Lucas: That demographic change isn't just a slow, abstract force — it's showing up right now in the products we buy and the way companies market to us. The toy industry is a perfect example of how businesses can adapt, and even thrive, when their core customer base shrinks. Luna: And it's a reminder that 'kids' stuff' isn't just for kids anymore. Maybe we should all be embracing our inner child a little more. Lucas: Ha, I think that's a great place to wrap up. Thanks for listening, and we'll catch you next time on The Demographics Podcast.