Digital Games: A Way to Increase Sales of Toy Companies

Many toy companies are now also producing mobile games for toys’ buyers. Mind Studios Games has been a contractor developing such games, and here’s what we have to share on the topic.

Highlights:

• Physical toys sales are dropping year after year, even for famous brands;
• Mobile games for toys are a great way to expand a toy company’s sources of revenue;
• Another aim of mobile games based on physical toys is to revitalize the interest in the latter.

Why are toy companies investing in mobile games?

Well, the reasons behind toy companies’ dips into video game development are mostly financial. Physical toy sales are dropping even for giants like Mattel and Hasbro; the latter suffered an 20% decline in revenue from consumer products, i.e., traditional toys. At the same time, the company’s earnings from its digital games segment — which, in case you didn’t know, includes the big 2023 hit Baldur’s Gate 3 — have risen 20%.

Mattel, on the other hand, has announced an ambition to become a mobile game publisher in its own right, instead of partnering with other companies for games based on the Mattel IPs.

It’s clear that digital gaming — and mobile gaming in particular — is a great option for toy companies, and many smaller brands are venturing into the gaming industry already.

We at Mind Studios games have been the team behind developing and maintaining a mobile game for one such venture, for a toy seller company KANDYCO — NanoBytes: ByteWorld. The game went on to win the Vega Digital Awards in 2021, in the Mobile Apps & Sites - Family & Kids category.

Here’s what Dean Tzembelikos, our client, said about this venture and the evolution of digital industry going over the next 5–10 years:

“I see digital game-ifying almost all parts of life. I also see the experiences becoming more tech immersive. Visuals and consumer experiences becoming more 3D with AR, and to a lesser extent VR, becoming more mainstream.”

So why is all this happening, and should any traditional toy company consider creating video games too?

Benefits of creating mobile games for toy companies

Now, being a game development company, we’re obviously an interested party and wish more toy companies dove into digital game development.

However, this doesn’t change the facts, and those say that there are some impressive advantages to be gained for a toy company that expands into digital gaming. Here are just a few big ones to answer the question: “Why are mobile games a smart move for toy companies?”

Better brand engagement

Mobile games are a powerful tool for deepening brand engagement by turning passive consumers into active participants. They allow toy companies to expand the narrative of their products, building virtual worlds where characters, themes, and storylines come to life. This transforms static toys into dynamic, interactive experiences.

By allowing players to interact with toys digitally, games make the brand feel more alive and accessible, creating a deeper emotional bond.

Increase in customer retention

This is a direct consequence of the previous point. With the help of mobile games, kids toys companies can retain customers longer — when there’s an emotional attachment, children are more likely to ask their parents to buy specific toys from the same brand. This is especially true, if physical toys are not just copies of digital ones but also can be brought directly into the game.

That’s what our client did — physical toys in the NanoBytes series have QR codes. Scanning that code makes the toy appear as an object in the player’s mobile game. The more toys you collect, the richer you become in the game, expanding your city with new stores, buildings, and products.

Diversifying revenue streams

In addition to bringing players to stores to buy physical toys they’ve seen in a game, games also offer alternative revenue streams — from in-app purchases, subscriptions, and integrated ads. So, even if the sales of the company’s physical toys don’t change significantly, chances are you won’t be losing money but gaining it differently.

Using toy-based games as a marketing tool

Finally, mobile games are an increasingly powerful marketing tool for traditional toy companies to increases toys sales. Their ability to engage broader audiences and foster high levels of engagement is unrivaled. By launching a game globally, you can build recognition for your brand in areas where your toys aren’t yet sold — thus placing the foundation for expansion.

If fact, marketing opportunities are probably the main benefit a conventional toy company gets from game development. So let’s talk a bit more about that.

First, here's a short comparison table for traditional marketing vs. mobile games for toy companies:

Point of interest	Traditional marketing	Mobile games
Engagement	Passive	Interactive through gameplay
Impact term	Short-term, depends on ad frequency and campaign duration	Long-term, as games retain users for months and sometimes years
Implementation costs	High, especially if you do large-scale campaigns	Moderate to high, depends on game complexity and updates
Audience reach	Broad, but usually not targeted (depends on media type)	Targeted, as it can be tailored for specific demographics or interests
Connection to toys	Indirect, focuses on brand awareness and messaging	Direct, can integrate toy narratives, digital versions of toys, etc.
Revenue prospects	Ad campaigns don’t generate direct revenue	In-app purchases, ad revenue, and cross-promotions with toys

The power of mobile games in marketing

Mobile gaming is no longer a niche hobby — it is now a favored form of entertainment. Moreover, their ability to engage diverse audiences, especially children and families, has made them a go-to strategy for many marketers.

What can a toy company expect from a well-built mobile game marketing strategy?

Marketing benefits of mobile games for toys companies
Global reach and demographic diversity	Over 3 billion people own smartphones globally, and many use them for gaming, making it one of the most far-reaching digital platforms. Moreover, the mobile gaming demographics include every generation: children, teens, adults, and seniors.
Low entry barrier	Making your mobile game free to download encourages widespread adoption. This ease of access allows marketers to target massive audiences effectively.
Interactive advertising	Rewarded video ads, branded content, or sponsored challenges engage players actively, making the brand message more memorable.
Long play sessions	Games can capture sustained attention better than many other digital mediums, providing plenty of chances for the brand to interact with the audience.
Building trust	Parents often feel comfortable allowing their children to engage with family-friendly games, making this an ideal space for brands targeting these audiences.
Gamification of advertising	Branded characters, themed levels, or collectible items can make advertising enjoyable rather than intrusive. This makes brand exposure fun.
Cross-platform promotion	Many mobile games link with social media or online communities, amplifying their reach and giving brands the ability to engage users across platforms.
Data-driven insights	Mobile games collect detailed user data, allowing marketers to tailor their messaging to specific demographics, interests, or behaviors. Marketers can also use this data to offer personalized rewards, in-game items, or promotions, enhancing the sense of connection to the brand and driving sales.

“Mobile games are a dynamic and interactive marketing platform that effectively combines entertainment with brand promotion. And as entertainment, mobile games are on the rise, constantly driving innovation. As we see it, use of games for marketing toys will only grow with time.”

— Ivan Dyshuk, Head of Mind Studios Games

Key strategies for integrating mobile games into toy products

So, how do you integrate video games into your toy company’s offers? There are several ways:

• Digital-physical integration via AR features. If you build an AR-enabled game, you could use this to blend your digital game with the real world. For example, scanning a code on a toy might offer players to virtually play with its copy in AR mode. It could be anything — a racing track for car toys, a dress-up game for dolls, or interacting with digital animals.
• Gamification of toy usage. Toys with special sensors can make the digital game respond to playing with physical toys. Think construction toys like LEGO: as the player builds their castle offline, the similar building appears in-game, and it can become part of gameplay if built correctly.
• Companion apps. LEGO does this already, with the LEGO® Builder and the LEGO® Super Mario™ apps. In a nutshell, they’re apps with instructions on building LEGO sets, including different variations.
• Use of camera for in-game experiences and digital rewards. Release toys with codes or markers that, when scanned (via QR codes on toys, for example), unlock special effects, characters, or game levels in the game. That’s what we and our client did for NanoBytes: ByteWorld — by scanning QR codes on physical toys, players could obtain them in-game as well.
• Story integration. Some physical toys come with lore and backstories, but it’s usually about toys based off movie or cartoon characters. It’s not too widespread a tactic the other way around, which makes it an opportunity to stand out when you market your products. Create a game with the toys you sell as characters and let players go to adventure with them.
• Multiplayer functionality. If you’re selling collectible items — cards, themed toys, or toys launched in series — a competitive multiplayer mobile game could go a long way in promoting your brand and increasing toys sales. Let buyers connect with other fans, friends, and family to battle using digital copies of traditional toys.

These strategies combine physical play with digital interactivity, appealing to tech-savvy kids as well as adults, and enhancing the overall play experience.

Challenges and considerations

While using video games for toys sales is a trend that’s gaining more popularity each year, it would be unfair to say it’s all sunshine and rainbows. There are things kids toys companies need to take into account when they make a decision to start building toy-based games.

The three main hurdles set before aspiring mobile game owners are:

• User experience
• Data privacy concerns
• Development costs

Let’s talk about each and how to overcome them.

User experience

Ensuring the digital and physical play experiences complement each other, rather than feeling disjointed, can be a major challenge. When you already have an established toy brand, integrating digital gaming into it will require thorough planning to blend the two mediums seamlessly.

How to deal with this: When planning the development, allocate enough time to researching and testing different ways to combine your particular type of toys with different types and genres of games. The most straightforward way isn’t always the best — collectible cards don’t necessarily have to be turned into card games; you can make characters “come alive” in a tactical turn-based adventure, too. Or a visual novel. The key is to research what your audience’s preferences are and what your competitors are doing.

Data privacy concerns

Toys connected to digital games often collect user data. In fact, it’s one of the reasons some games exist — to provide toy sellers with a glimpse into buyers’ minds and gather data to make better business decisions. However, this requires compliance with privacy laws (e.g., COPPA, GDPR). Moreover, the laws are stricter when it comes to protecting children, so kids toys companies will have it even harder than others.

Protecting your game and your toys from hacking, data breaches, or unauthorized access is critical.

How to deal with this: Hire lawyers specializing in digital data protection legislation, and have them be consultants during your game development. Also, hire developers with experience in encryption and data protection. At Mind Studios Games, we have developers knowledgeable in both mobile game analytics and data encryption.

Development costs

Creating engaging games that complement the toys may take longer than producing traditional toys. And in game development, time often translates into costs. Moreover, if we’re talking smart toys, with sensors or AR functionality, such technology can be pricey on its own.

How to deal with this: Consider employing outsourcing companies with experience in the niche. You’ll be saving time — no need to look for each specialist and go through trial and error to gain expertise. And, with a bit of searching, you’ll find qualified personnel in countries with lower hourly rates.

Eastern Europe is considered a hub of software developers, where lower prices are combined with top-shelf skills in technology. Also, pick partners working in Agile methodology — this way, you can distribute payments instead of paying the whole amount right away.

Finally, look for a company experienced in translating physical toys into digital games, as they will work faster and know more about what to look out for and what works better. Less rework equals less need for investment.

These aren’t all the roadblocks traditional toys companies can encounter on their way to expand into digital gaming, of course. The smaller issues include:

• Technical challenges like making a game compatible with a variety of devices and networks.
• Collaboration complexities — choosing a game development partner who will understand your idea correctly and build the game that works in favor of your business.
• Parental pushback, where your game might need to bring certain educational value and/or have functionality to limit the children’s in-game time without it hurting profitability.
• Market competition — while phygital toy businesses aren’t yet a majority, the trend has been around for some time, so you’ll need to find a way to stand out.
• Sensible approach to in-app purchases and ads, as children don’t always understand the limits, and parents might be against IAPs and ads in general.

However, these and other potential challenges are solvable for a company that has experience in the niche. A game development company like Mind Studios Games, who have been on the market for over 8 years and have developed mobile games in a variety of genres and of multiple types.

In our portfolio, there are shooters, city management games, card games, idle games, casual and hybrid-casual games, and more. And we do have experience working with a physical toys company to deliver a digital experience that adds to the business and increases toys sales.

If you’re looking for a partner to entrust the development of a mobile game based on your existing brand of toy products, drop a line to our consultants. See if we can be the force behind your drive to success.

Examples of successful mobile game-toy collaborations

LEGO and LEGO Super Mario

LEGO collaborated with Nintendo in 2020 to create the LEGO Super Mario series, a set of interactive building kits with a digital companion app. The core of this line is Mario and Luigi figures equipped with sensors, Bluetooth connectivity, and a small LCD screen. The figures interact with the physical LEGO pieces and the mobile app, which provides gameplay guidance and rewards. Since summer 2021, there’s also a multiplayer mode in the game.

Mattel and Hot Wheels id

Mattel’s Hot Wheels id combines physical Hot Wheels cars with an app-based gaming experience. Cars have embedded NFC chips that track performance data, which can be synced to a mobile game. The game adds competitive elements, including race statistics, challenges, and virtual rewards.

Hot Wheels id updated the classic toy line for tech-savvy kids, appealing to both traditional fans and new customers.

NanoBytes: ByteWorld

NanoBytes: ByteWorld is a mobile game that our client came up with, to launch alongside tiny physical toys. Players who bought the toys can scan a QR code on them and get the same item or character inside their game. It’s also possible to get the items without buying physical toys — through various challenges as well as via in-app purchases.

Besides the main game play of building and maintaining a voxel city, NanoBytes: ByteWorld has several minigames, a quiz functionality with curious facts, and challenges like catching a thief that visits your city from time to time.

Since its launch in 2021, the game has gotten a multiplayer functionality and become a multiverse and trading hub.

Applaydu by Kinder

Kinder’s Applaydu is a mobile game for children, aimed at kids aged from toddlers to pre-teens. It features a range of entertainment and educational content, including coloring games, racing, and learning about all kinds of things, from facts about animals to proper ways of sorting waste.

The core of the game that ties it to Kinder toys is the AR mode, in which players can scan a toy they get from the Kinder egg — and it will appear in their game, interactive. For example, an animal toy will lead children on an adventure around that animal’s habitat and teach them some of the animal’s habits.

Conclusion

Mobile games for toys can significantly boost toys sales by bridging the gap between physical play and digital engagement. They enhance the play experience by adding interactive features, gamified challenges, and storytelling elements that appeal to the tech-savvy kids of the current generations. Apps can unlock exclusive digital content, track progress, or personalize toys, encouraging repeat engagement and brand loyalty. And adding innovative features, like augmented reality or “toys-to-life” integration, can attract wider audiences.

Moreover, mobile games allow toy companies to gather insights into consumer behavior, enabling targeted marketing and product updates. By combining traditional toys with dynamic digital content, companies can modernize their offerings, create new revenue streams, and stay competitive in a rapidly evolving market. Embracing mobile gaming as part of your strategy of marketing toys will not only increase sales but also position your brand as leaders in the next generation of play experiences.

If you’re looking for a game development partner who knows exactly how to make a mobile game for a traditional toy business, look no further. Mind Studios Games has the experience and expertise to translate physical into digital efficiently, quickly, and under a budget. Schedule a consultation with our team, and we’ll get back to you to discuss the best way to realize the full potential of your idea.

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