In a report into the UK toy market (available here for &eruo;774 (electronic) or &eruo;950 (hard copy)), the UK toy industry is now valued at £2.16bn. "Total sales have increased annually since 2002, although growth levels have been relatively low" the report states. 

The report breaks the toy market into nine product categories.

1. infant / pre-school toys and games
2. Activity toys
3. Outdoor and sports toys and games
4. Games / Puzzels
5. Dolls
6. Action Toys
7. Vehicles
8. Plush toys
9. Other products

The report states that several factors have had a strong effect on the market including the UK birth rate falling annually from 1996 until 2001.  Since 2001 that figure has reversed, and the birth rate is back on the increase.  In terms of UK child populatation, this trend led to a fall in the total child population between 2002 and 2006.  However the under-5 age group increased in number over the same period

The report does highlight, however, that this is not the greatest concern to the toy suppliers that falls to the KGOY (Kids Getting Older Younger). As a result of this, traditional toys are being abandonded at younger ages in favour of PC and console games, mobile telephones, fashion and a wealth of alternative products. To try to combat this trend, suppliers have been focusing on producing more engaging toys, adding in more electronis features, including fashion elements and introducing websites with interactive elements. Some groups, as the report states, are not looking outside of the child markets and looking to aim ranges at an older audience. It quotes Hornby and Games Workshop as two such organisations. Here's a quote "Collectability is also regarded as a way ot target higher spending amoung adult buyers. In addition, 'retro' products have looked to appeal to parents rather than children, as witnessed by the revival of brands such as Raleigh". Licensed products rosed wthin the UK by 10% in 2005/2006, mainly due to supermarkets, to £2.2bn, however Woolworths remained the most significant supplier of licensed products in the UK. 

Here are some more quotes
"Toys and games are an international business with global brands. Most of the major companies source and distribute internationally so that they can benefit from economies of scale (not only in terms of costs but also with regard to marketing). The two largest toy companies are Mattel and Hasbro, both of which are in US ownership. These companies operate across most sectors of the toys market and own major brands such as Barbie, Action Man, My Little Pony and Fisher Price. UK-owned companies tend to be smaller in scale and include groups such as Vivid Imaginations and Hornby.

The presence of large international groups in the traditional toys and games market has allowed a high level of investment in brands and products. Established names have moved into new formats, such as DVD board games. The cross licensing of names from the media has also been an important source of new products, from Teenage Mutant Ninja Turtles to Roary the Racing Car.

Many brands and products have seen a rise in electronic content to more effectively target an increasingly sophisticated demographic. The use of interactive websites to encourage brand loyalty and interest is also developing.

The toys and games market has limited scope for growth in the current competitive children's market. However, the existence of strong brands and established companies in the sector is a positive indicator."

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