The Rise of 'Kidults': Driving Growth in the Toy Industry

Market Trends and Consumer Behavior of 'Kidults'

'Kidults' are driving growth through their demand for high-engagement, tech-savvy experiences, as seen with Hasbro's success in pet-simulation gaming and Disney's enduring brand appeal. Hasbro's focus on consumers 13 and older, generating over 60% of revenue, highlights the significant market trend and consumer behavior of 'Kidults'.

"part, a good consumer proposition economically. But in today's consumer, used to both basically the Internet and app based experiences and ultimately AI driven experiences, wants much more than that." --- (DIS, conference, 2024/05/15)

"Following the wildly successful collaboration between LITTLEST PET SHOP Master Toy licensee, Basic Fun!, a leading global marketer of toys and consumer products, Hasbro, Inc., a leading toy and game company, and Suit Up Games, a Roblox development studio specializing in high-engagement branded experiences for young audiences, the LITTLEST PET SHOP pet-simulation gaming experience has surpassed over 3.5 million plays since launching in December 2023." --- (HAS, press release, 2024/04/04)

"The increase in licensing revenue was driven by higher sales of products based on Spider-Man and Mickey and Friends, partially offset by a decrease in sales of products based on Star Wars." --- (DIS, sec filing, 2024/Q2)

"Hasbro's long appreciated this audience, driving over 60% of our revenue from consumers 13 and older and we'll continue to lean in here as we think about innovation across our product portfolio.Looking at the business with the first half of the year in the books, our team delivered, and we're raising our full year guidance as a result. Gina will share more detail shortly, and I'll first offer" --- (HAS, earning call, 2024/Q2)

"It doesn't wane even for older people, interestingly enough. The number of people who visit, the number of people who go on our cruises without kids, because their connection to the brand and the IP is extraordinary, and their kids, and their children's children, and so on and so on." --- (DIS, conference, 2024/05/15)

Product Innovation Targeting 'Kidults'

Hasbro and Disney are investing in marketing, technology, and brand collaborations to innovate products targeting 'Kidults'. This includes extending mid-core and hard-core brands, leveraging cross-licensing, and creating new product opportunities with partners like LEGO and Mattel.

"So we have to do that by investing more in marketing, investing more in innovation." --- (HAS, conference, 2024/05/20)

"The next steps are all those technology areas that or specifics that I talked about, which is investing in the technology to basically create much more to serve the user, to serve the consumer, really." --- (DIS, conference, 2024/05/15)

"He's worked on some great stuff, which I think is perfectly on point with what Wizards of the Coast is all about and what our digital gaming strategy is all about which is extending a bunch of great mid-core and hard-core brands and an expertise in designing for those kinds of audiences and helping us digitize what those brands can do." --- (HAS, earning call, 2024/Q2)

"So I think we're basically done without licensing. We certainly will be driving cross-licensing and leveraging our brands for category expansion and new product opportunities like we're doing with LEGO, like we're doing with Mattel, like we're doing with location-based entertainment." --- (HAS, earning call, 2024/Q1)

Marketing Strategies for 'Kidults'

Hasbro's marketing strategies for 'Kidults' have shown success in the first quarter, with consistent marketing efforts ranging from 25% to 35% being crucial in maintaining engagement and driving growth.

"Maybe just to follow-up on the marketing strategy, Chris, you talked about some success that you're seeing in the first quarter." --- (HAS, earning call, 2024/Q1)

"So as we thought about our modelling in the back half we're thinking of the decay rate that monthly decay rate of call it 3% to 5% and consistent marketing is what I think I said in my prepared remarks, that consistent marketing can range anywhere from call it 25% up to 35%." --- (HAS, earning call, 2024/Q2)

Competitive Landscape in the 'Kidults' Market

Disney is cautious about revealing competitive strategies and margin goals, while Hasbro leverages popular franchises like Final Fantasy and Magic to strengthen its position in key markets, highlighting diverse approaches in the 'Kidults' market.

"I don't like to get ahead of the next year until we get to the next year. And in addition to that, from a competitive perspective, I'd rather not give my competitors the pathway on exactly how we're -- how and when we're going to achieve the margin goals we're looking to achieve." --- (DIS, earning call, 2024/Q2)

"And then Final Fantasy, it's huge inside of North America and Europe. But our sales in Japan will probably to do with what we did with Lord of the Rings because of the resonance that it has in that market which you should remember is the number two market for Magic and the number two market overall for trading card games. Drew Crum: Super helpful. Thanks guys." --- (HAS, earning call, 2024/Q1)