NPD Insight

Toy licensing in Europe

This month, Rory examines the growth of licensing in the European toy market and the factors that are influencing this boom.

The toy market across the European G5 is currently +6% using latest NPD EPOS data for 2021. That is an impressive performance considering the challenges still facing the industry across Europe. However, one area of the toy market is doing even better in 2021 and that is licensing, with consistent growth across all European countries. Let’s take a closer look at what exactly is driving this growth with a breakdown of the performance in each country to see what the similarities are, as well as the differences.

As already mentioned, the growth for the G5 this year is +6% in value but for the same five countries licensed growth is +16%,growing nearly three times as fast as the overall toy market. Licences make up nearly 24% of the overall toy market in Europe this year -the highest share for four years. The five countries show double digit growth for licences across the board, with the highest growth in Italy at +28% value growth vs. the same period in 2020. This means Italy has the highest share for licences in the G5 with nearly 27% of the market, five percentage points ahead of France which has the lowest share at 22%. The UK has the second highest share of licences in the G5 with just over 26%, and although the overall toy market is flat versus last year, licensed sales are up +10%.

It’s clear that licensed toy sales are thriving in 2021, but what is driving this performance? Looking at the European toy market in 2021 we can see sales linked to TV/Digital are growing +10% and movies are growing at a more modest +1%. These areas represent around a quarter of all toy sales, but the strongest growth is coming from sales linked to video games, growing at +95% against the same period in 2020. France represents around 40% of all toy sales linked to video games and is also the top growth country, up +122% vs. last year. Pokémon is the key licence here in the brand’s 25th anniversary year, with growth in the core Strategic Trading Cards as well as in Action Figure Collectibles, Plush and Building Sets. Minecraft and Super Mario Brothers are two other video game licences also adding value this year, with both being driven by sales from Lego in 2021.

Although the influence of video games has added more value in 2021 than any other category, it still represents under 5% of the total toy market. TV/Digital is still the largest influence, being 15% of the European market and adding €70m so far in 2021. All five countries have seen value increases for TV/Digital, with Germany and the UK leading the way in terms of growth. These two countries make up around 60% of all TV/Digital toy sales so far in 2021 in the G5. One of the top performing properties for TV/Digital this year is Paw Patrol which has seen +22% growth in Europe, across all five countries. This is a property that has also moved into cinema with the Paw Patrol movie opening across Europe in August this year. The trend here also emphasises the impact that movies can have on the overall success of the brand: August was a particularly strong month for Paw Patrol, with +53% growth in France and +21% growth in Germany versus August 2020.

In Europe, Dress Up is an area where licensing is key. The UK costumes market is the most heavily licensed, where 81% of the total costumes market are based on licensed properties. This is another area where the strength of move based properties is critical; across the G5 combined, the top three licences are all movie based: Avengers, Disney Frozen and Spider- Man. With a newSpider-Man movie coming in December this year, we should see sales for these costumes grow across Europe in Q4.

Licensing as a whole appears to be in a very healthy state across Europe. There is growth across all countries and across different types of licence, from video games through to TV and movies. A full calendar of new movie releases should result in see another strong year for movie-based licences in 2022.

Property Progression:

After a summer when the delayed European 2020 football championships finally took place, we saw impressive sales for the Panini European football stickers, helped by the England team making it all the way to the final. In August, at the start of the English Premiership, we have seen sales of these stickers move the Adrenalyn property up over 100 places to move just outside the top 40. The Adrenalyn Premier League 2020/21 XL Starter Pack is the top item for the property in August with around £130k of sales for the month at an average price of £5.88.

Fastest Growing Properties in Toys

Pokémon is the top growth property so far in 2021.

The fastest growing property in the UK toy market with YTD August data is Pokémon. In its 25th anniversary year, the property has seen consistent growth each month across several subclasses. The key growth has come from the Strategic Trading Cards, Action Figure Collectibles and Plush. World Soccer is at No.2 after strong sales over the summer linked to the European Football Championships. As we move into the autumn, football-linked sales have shifted to the Panini Premier League stickers as the new season gets underway. Star Wars has been in the toy market for many years now and is seeing strong sales again in 2021, being the 3rd top growth property so far this year. Strong sales for the Mandalorian have helped this growth and this now makes up nearly a third of all Star Wars sales, with nearly two thirds of all Mandalorian toy sales being in Building Sets. 5 Surprise from Zuru is the No.4 growth property, and another that is helping the resurgent collectibles trend so far this year. The 5 Surprise Mini Brands Ball Asst is the top item for this property in 2021 at an average price of just over £7.00.