AI prices have skyrocketed tenfold, and the toy industry wants to create another POP MART

In posts sharing the "Eye-catching Bag" on social media platforms, comments like "Is it available?" and "High price buy" frequently appear. The "Eye-catching Bag" is a toy previously given to customers by ByteDance. Unlike traditional toys, this is an AI toy embedded with technologies such as the Doubao large model, professional version of buttons, voice recognition, and voice synthesis.

This non-sale item has been speculated to around 300 yuan on second-hand platforms. The emergence of the "Eye-catching Bag" confirms a fact: the trend of hardware AI has reached the toy market.

An AI toy entrepreneur told Tech Planet that the number of inquiries for cooperation and OEM has surged in the past month. According to a report from market research firm Research and Markets, the global AI toy market is expected to grow from approximately $8.7 billion in 2022 to $35.11 billion by 2030, with a compound annual growth rate of over 16%.

Following the AI transformation of mainstream hardware such as headphones, glasses, mobile phones, and computers, AI toys are becoming a new hope for the breakthrough of large model capabilities in the consumer market. Under this trend, giants like ByteDance and Tesla, as well as numerous startups, are accelerating their entry.

Racing Ahead in the AI Toy Market

In an entrepreneurial group focused on AI hardware, discussions about "AI toys" are becoming increasingly heated, with entrepreneurs viewing it as a new market with unlimited prospects, and some even proclaiming the slogan "AI redoing the toy market."

One practitioner told Tech Planet that the commonality in AI toy entrepreneurship currently lies in the technical approach, where most choose to connect to large models externally, training small models in vertical fields through access to general large models, reducing the investment in independent research and development, and then matching suitable hardware.

However, the target consumer groups differ. For example, AI toy products aimed at the children's market focus on compensating for insufficient parental companionship and meeting interests and hobbies, while for adults, AI toys primarily address emotional value and alleviate negative emotions such as loneliness.

As a result, AI toys presented to children are mostly "dolls" with educational attributes, while those aimed at adults possess "pet" attributes.

Recently, the popularity of "AI toys" has been validated multiple times in small-scale tests.

In November this year, Tesla launched a $40 Optimus robot model in its online store, which sold out in less than a day and has not been restocked since. On second-hand trading platforms like eBay, the price of this robot has soared to $1,300.

Similarly, in November, Japanese electronics company Casio officially released the AI robotic pet Moflin, priced at 59,400 yen (approximately 2,779 yuan). It sold out during the pre-sale phase, and on the second-hand platform Xianyu, the price of Moflin has been speculated to over 10,000 yuan. A purchasing agent in Japan told Tech Planet that many customers in China have inquired, but this product currently requires a reservation Looking at the domestic market, in addition to the "Eye-catching Bag" launched by Doubao, there are more and more AI toys available for sale.

The AI startup Haivivi launched an external AI pendant for plush toys called BubblePal in July this year. The official price of BubblePal is 449 yuan, and its GMV exceeded 4 million in the first month of sales. Official data claims that more than 20,000 units were sold within two months of its launch.

The FoloToy team, which provides the large model AI core for ByteDance's "Eye-catching Bag," is also targeting the C-end market in addition to offering solutions for the B-end, continuously launching AI toys such as Fofo the Fire Rabbit and "Kawaii" Cactus.

There are also some companies whose products have not yet been fully launched but have attracted widespread attention due to the backgrounds of their founders.

According to incomplete statistics from Tech Planet, Qidian Lingzhi, founded by former Meituan Vice President Bao Ta, is developing AI smart hardware equipped with large models for children; Yi Jia Yi Ban, founded by former Microsoft DPS Global Solutions Innovation Department General Manager Guo Zhi, has launched the AI companion robot "Ai Xiao Ban"; Luo Bo Intelligent, founded by Sun Zhao Zhi, the former head of product design at XPeng Robotics, is positioning itself as an AI companion robot, with its first product being "AI Trendy Toy"; Bei Pei Technology, founded by Huang Ying Ning, former General Manager of AIOS at Fourth Paradigm, focuses on toy hardware related to AI large model education companionship.

In addition, some listed companies are also entering the market, with Tom Cat AI Robot planning to launch its first batch of products before the Spring Festival. Aofei Entertainment has launched the first AI smart product of Pleasant Goat—"Pleasant Goat Super Energy Bell Doll."

With AI, traditional toy prices soar tenfold

"The principle of AI toys is to equip various forms of hardware with software, achieving access to large models through API calls, and interacting with users through dialogue," said an AI practitioner.

In his view, compared to products like smart speakers, story machines, early education machines, and phone watches, the main difference of AI toys lies in interaction and feedback. By equipping large models, they can engage in natural conversations and answer questions with users.

Taking BubblePal from Haivivi as an example, it can be worn as a pendant on any doll, and functionally, it can tell stories, play word games, and support different IP personas.

Many parents who purchased the product stated that compared to Tmall Genie and Xiaomi speakers, it can basically understand children's emotions, and the language used in communication with children is simpler and more understandable.

Therefore, compared to traditional toys that focus more on appearance and IP characteristics, the special experience brought by AI toys mainly comes from natural interaction.

As a result, an entrepreneur entering the market told Tech Planet that AI toys are less about selling toys and more about selling solutions. "Entrepreneurs only need to provide AI software solutions, and many factories can take orders to customize the AI toys you design." A plush toy factory owner told Tech Planet that they received several orders for AI plush toys in the second half of this year. "To be honest, there is not much difference from producing other plush products; just leave a pocket for the built-in mechanism."

Once equipped with the corresponding solutions, these otherwise ordinary toys can see price increases of ten times or even higher. As the entrepreneur mentioned, the hardware cost of a plush AI toy generally accounts for only one-tenth of the product's selling price, or even less; the AI solution it carries is the key to selling these toys for hundreds or even thousands of yuan.

In addition, compared to the characteristics of ordinary toy buyouts, AI solutions also provide these toys with a longer-tail charging model, presenting a continuous revenue feature.

This charging model centers around large models, where AI toy companies incur costs by calling services through APIs from large model vendors. On the consumer side, AI toy companies will establish a subscription logic when pushing products to the C-end market.

Tech Planet learned from various store customer service representatives that FoloToy's AI cactus smart toy is priced at 258 yuan, with a 6-month membership subscription included, after which the annual fee is 99 yuan.

According to official introductions, the product currently supports integration with numerous models, including ChatGPT, ByteDance's Doubao, Koushi, Tongyi Qianwen, Dark Side of the Moon, Baidu ERNIE, Deepseek, and more.

Meanwhile, BubblePal under YueRan Innovation is priced at 499 yuan, offering a 3-year membership subscription, with an annual fee of 99 yuan thereafter.

Additionally, customer service representatives from both brands emphasized that in the future, without a membership, these products will be unusable.

On the B-end, AI solutions are also the core monetization method for AI toy companies. FoloToy has a separate business selling "mechanisms," and previously, YueRan Innovation planned to launch the "YueRan Everything" platform to provide toy companies with a complete set of AI hardware and software solutions.

Before Becoming a Hit, Bubbles Emerge

Despite the heated competition in the AI toy sector, there have yet to be any blockbuster products, with few brands achieving sales of over ten thousand units.

A hardware industry professional stated that this is mainly related to product experience. According to his observations, many toys on the market that seem to carry the "AI" label are essentially just Bluetooth speakers with children's stories and encyclopedias built into the hardware.

In the comment sections of AI toy e-commerce platforms, complaints about irrelevant answers, low cost-performance ratio, poor quality control, and frequent malfunctions are rampant. One consumer believes it is merely a speaker that integrates search and voice functions, with no essential difference from products like Xiaodu.

Even within hardware startup groups, some entrepreneurs believe that AI toys are just small smart speakers dressed in plush exteriors.

A large model industry professional told Tech Planet that the fundamental reason for this perception is that the costs of large models are decreasing, and the technologies involved, such as speech-to-text, are also open-source, leading some incoming entrepreneurs to believe that there are no barriers to entry in AI toy startups But in reality, the key to transforming AI toys with large models is to enable smooth connections between product hardware and cloud-based large models based on algorithm capabilities, thereby enhancing the consumer experience. At the same time, during this training process, companies also need to have a sufficiently large corpus. "For example, when making toys for young children, adult voice samples definitely cannot be used."

If a product is launched without refinement and accumulation, merely to chase a trend, it will fall into the predicament of users losing interest after just five minutes of use.

Before the trend of AI toys took off, educational hardware such as learning machines, dictionary pens, early education machines, story machines, and word cards were also continuously infused with "AI elements."

In this regard, an industry insider stated that whether the AI functions in learning machines can achieve the advertised effects still depends on the manufacturer's own resources and accumulated data, and it requires long-term refinement. From this perspective, AI toys clearly have not yet completed the foundation for an explosive product breakthrough.

However, it is undeniable that whether for children's toys or educational hardware, there is indeed an underestimated market demand, aside from the advantages of the industrial chain.

Under this demand, only by effectively utilizing large models as a core tool and continuously improving content product capabilities can AI toy companies potentially achieve an explosion.

Author of this article: Ren Xueyun, Source: Tech Planet, Original Title: "With AI Prices Soaring Tenfold, the Toy Industry Aims to Create Another POP MART"

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk