The highly anticipated preview for Pixar’s “Toy Story 5” was released last week, introducing a new toy character, a tablet, to the beloved group of toys. In the trailer description on YouTube, Pixar questions if the era of traditional toys is coming to an end.
The scene in the trailer features familiar characters like Rex the dinosaur and Slinky Dog eagerly awaiting the arrival of the new toy. Against the backdrop of INXS’s classic hit “Never Tear Us Apart,” Woody and Buzz Lightyear are seen embracing each other.
While this is just a movie, it symbolizes a real concern about the future of the toy industry in a digital age. With reports of retail challenges and studies indicating children’s preference for virtual items like Robux, the future outlook for traditional toys is uncertain.
Various factors are influencing the market dynamics, according to Doug Stephens, a retail expert. These include declining birth rates, changing consumer habits, and the impact of online platforms like Amazon. The surge in digital gaming over the past two decades has significantly impacted traditional toy sales, creating a subculture around gaming consoles.
Despite the decline of big-box toy stores like Toys ‘R’ Us, there is a resurgence in local hobby and toy stores catering to adult collectors or “kidults.” These stores offer a unique experience and cater to a niche market interested in products like Lego sets, Pokémon cards, and collectibles.
While the toy industry faces challenges from online shopping and gaming trends, there is a growing demand for traditional toys like games, puzzles, and building sets. Canadian toy sales have seen an 18% increase in the first half of 2025, with a focus on classic toys continuing to drive the market.
As the industry adapts to changing consumer preferences, some toy stores are shifting their focus to providing interactive experiences for customers. By offering events, craft nights, and birthday party packages, these stores are evolving to provide more than just products, emphasizing the importance of creating memorable experiences for customers.