Are AI Companions a Threat to Toys? & The Kidult Economy is Booming
Episode
29 min
Read time
2 min
Topics
Relationships, Investing, Fundraising & VC
AI-Generated Summary
Key Takeaways
- ✓AI companion risks: AI-powered toys like PlayAI and Two XL failed because they depend on cloud servers and third-party tech. When companies shut down servers, $300 robots become useless, turning toy ownership into temporary rental rather than permanent purchase.
- ✓Kidult market dominance: Trading cards alone drove 70% of US toy industry growth in first half of 2024, with adult collectors treating items as legitimate investments. Pokemon cards and collectibles now tracked as asset class alongside traditional portfolios.
- ✓Screen timing strategy: Keep children off handheld tablets and phones as long as possible while treating video game consoles differently. Active outdoor play gets displaced by constant screen attachment, unlike structured gaming sessions that mirror traditional TV watching patterns.
- ✓Movie-toy licensing shift: K-pop Demon Hunters became Netflix's biggest film ever but had zero toy products ready at launch. Mattel and Hasbro formed unprecedented co-master partnership to split categories, with first products arriving 12-18 months after release.
What It Covers
James Zahn, editor-in-chief of The Toy Book, explores how AI companions threaten traditional toys, the kidult collector market driving 70% of toy industry growth, and evolving relationships between movies and merchandise.
Key Questions Answered
- •AI companion risks: AI-powered toys like PlayAI and Two XL failed because they depend on cloud servers and third-party tech. When companies shut down servers, $300 robots become useless, turning toy ownership into temporary rental rather than permanent purchase.
- •Kidult market dominance: Trading cards alone drove 70% of US toy industry growth in first half of 2024, with adult collectors treating items as legitimate investments. Pokemon cards and collectibles now tracked as asset class alongside traditional portfolios.
- •Screen timing strategy: Keep children off handheld tablets and phones as long as possible while treating video game consoles differently. Active outdoor play gets displaced by constant screen attachment, unlike structured gaming sessions that mirror traditional TV watching patterns.
- •Movie-toy licensing shift: K-pop Demon Hunters became Netflix's biggest film ever but had zero toy products ready at launch. Mattel and Hasbro formed unprecedented co-master partnership to split categories, with first products arriving 12-18 months after release.
Notable Moment
Mattel discovered they had 5,000 adult female Barbie collectors in the 1980s, proving kidult collecting existed decades before current headlines. The phenomenon accelerated when pandemic-era adults with disposable income reconnected with childhood nostalgia as comfort purchasing.
Episode Transcript
Oh, could this vintage store be any cuter? Right? And the best part, they accept Discover. Except Discover? In a little place like this? I don't think so, Jennifer. Oh, yeah Discover's accepted where I like to shop. Come on, baby. Get with the times. Right. So we shouldn't get the parachute pants? These are making a comeback. I think. Discover is accepted at 99% of places that take credit cards nationwide based on the February 2025 Nielsen report. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, strap into your Tonka trucks. We're going on a toy ride. Dust off those Legos and reassemble mister Potato Head. We're talking toys. It's Friday, November 28. Let's ride. Hope you all had an amazing Thanksgiving and were able to sleep in today on an extra full stomach. As you dig into the leftovers, here is a special Black Friday interview episode all about toys. James Zahn is the editor in chief of the toy book who also goes by The Rock Father. Ahead of the holiday gift giving season, we wanted to pick his brain about the latest trends in toys, and you will not wanna skip it or even bop it. This dude is a toy savant. He can solve a Rubik's cube in negative ten seconds. His etchings get strongs hang in the Louvre, and he's got a cool beard too. Seriously, look it up. So even if you don't know a GI Joe from a glow sick or a Lego from a Lincoln log, you will feel like a Tory connoisseur by the end of this episode. But first, a word from our sponsor, US Bank. It's that time of the year again, pet parents. Your dogs and cats are surrounded by wrapping paper, seasonal treats, and other tasty temptations that could end up in unexpected trips to the vet. The last thing you want is to have to pay those emergency vet bills out of pocket. Introducing the US Bank Split World Mastercard, a new type of card that lets you pay later on every purchase. With the Split card, all purchases are automatically divided into three payments and placed into a payment plan to be paid back over three months. And if you're looking for additional flexibility, any purchase over $100 can be extended to six or twelve months with equal monthly payments for a low monthly fee. No matter what mischief your pets get into this season, you can pay later on every purchase with the US Bank split card. Learn more at usbank.com/splitcard. That's usbank.com/splitcard. Now here's James Zahn. James, it's great to have you. We are so excited to talk toys. Hey. It's great to be here, and I'm, of course, always willing to do some talking toys. Alright. Let's start here. You probably saw that the first trailer for Toy Story five dropped this month, and the plot line seems to revolve around an iPad like tablet replacing …
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“James Zahn, editor-in-chief of The Toy Book, explores how AI companions threaten traditional toys, the kidult collector market driving 70% of toy industry growth, and evolving relationships between movies and merchandise.”
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