Toys and Games in Italy

TOYS AND GAMES IN ITALY
Euromonitor International
December 2015
LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1
Toys and Games Shines in 2014, Thanks To A Boost From Video Games ............................. 1
Seasonality Is Still A Key Driver of Sales.................................................................................. 1
Italians Increasingly Shop Online for Toys and Games ............................................................ 1
A Stagnant Future Awaits ......................................................................................................... 1
Key Trends and Developments .................................................................................................... 2
Licensing Continues To Grow in Italy ....................................................................................... 2
Video Games Companies Strengthen Their Leadership in 2014, Whilst Mattel Flags .............. 3
Improvements in Internet Access Create Opportunities for Digital Gaming .............................. 3
Market Data .................................................................................................................................. 4
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Sales of Toys and Games by Category: Value 2009-2014........................... 4

Sales of Toys and Games by Category: % Value Growth 2009-2014 .......... 4
NBO Company Shares of Toys and Games: % Value 2010-2014 ............... 5
LBN Brand Shares of Toys and Games: % Value 2011-2014 ...................... 5
Distribution of Toys and Games by Format: % Value 2009-2014 ................. 6
Forecast Sales of Toys and Games by Category: Value 2014-2019 ............ 7
Forecast Sales of Toys and Games by Category: % Value Growth
2014-2019 .................................................................................................... 7
Sources ........................................................................................................................................ 8
Summary 1
Research Sources ........................................................................................ 8
Passport

EXECUTIVE SUMMARY
Toys and Games Shines in 2014, Thanks To A Boost From Video
Games
After three consecutive years of declining value sales, toys and games in Italy managed to
show a strong performance in 2014, largely thanks to the launch of the new generation of static
video game consoles. There was also a further boost to value sales from digital gaming and
video games software. Increasingly, Italian consumers, especially the younger generation, are
increasingly becoming digital natives and are hooked to their smart devices, using them for
everything from learning and play to communication and entertainment. This ongoing trend
pushed up sales of digital gaming. Finally, traditional toys and games also played a part in the
stellar performance of 2014, with value sales turning slightly positive after several years of
decline.
Seasonality Is Still A Key Driver of Sales

Seasonality continues to have a strong impact on sales of toys and games in Italy. Most sales
are still made during the Christmas period. This trend was even more visible during the
economic crisis, as Italians needed to save money, looked for promotions and decreased their
consumption. Seasonality also poses difficulties to players in toys and games, which need to
organise their logistics to avoid losing sales due to a lack of stock. Retailers organise in-store
events and promotional activities, along with specific discount campaigns to attract customers
all year round and lessen the impact of seasonality.
Italians Increasingly Shop Online for Toys and Games

Internet retailing continues to experience robust value growth in toys and games, as it allows
access to a wider selection of brands and products and offers price transparency, enabling
consumers to research products and opt for the best deal. It also provides a higher level of
convenience than grocery retailers. In 2014 a high proportion of sales of toys and games were
already made via internet retailing. Over the forecast period internet retailing of toys and games
is likely to become even more popular, due to developments in e-commerce and m-commerce,
along with rising ownership of smartphones and tablets in Italy. A larger number of retailers and
manufacturers are starting to consider the potential of the internet to increase sales and meet
consumer demand for additional offerings and advanced services.
A Stagnant Future Awaits

Following the expectation of a bright year in 2015, featuring successful new launches from the
new generation of static video game consoles, the forecast period is expected to be a much
steadier period for a market that is already mature in Italy. Traditional toys and games is
expected to maintain slightly positive value growth in 2015 at constant 2014 prices, with
licensing and electronic toys being amongst the main factors helping to sustain this positive
performance. For video games, a stagnant performance is expected after 2015, with the next
wave of new generation consoles not expected to be launched before 2019, combined with the
continued threat coming from free-to-play video games. Overall, the market is therefore
expected to see a stagnant performance in the forecast period.
Passport
KEY TRENDS AND DEVELOPMENTS

Licensing Continues To Grow in Italy
Sales of toys and games in Italy declined in the review period. However, licensing, which is
still a critical factor in the market, continued to expand. Licensing is a significant strategy used
by manufacturers to increase sales in an unfriendly economic environment. In an effort to
maintain or increase their shares of the market, players produced new licensed products in
2014. This was also a way to ensure they stayed innovative and dynamic, and were perceived
as such in the market by consumers. With regard to licensing, the major licences included
Frozen, Marvel Avengers, Hot Wheels, Barbie, Ben 10, Winx, Canta Tu, Mickey & Friends, Cars
and Peppa Pig, followed by Teenage Mutant Ninja Turtles, Spider-Man, Max Steel, Disney
Princess, Planes, Bakugan, Hello Kitty & Friends, Iron Man, Monster High, Superman, Lego
City, Star Wars, Bratz and Transformers. The large number of different media platforms,
however, has made licensing very fragmented. Nonetheless, the licenses which continue to
show good performances tend to be those which are more classic.
Licensing products has the benefit of attracting consumers to retail outlets and generating
strong sales, leading to faster rotation of the product assortment. From a strategic point of view,
players tend to tailor licensed products to particular events, in an effort to enhance the appeal of
products during certain periods of the year. For Italian retailers licensing is increasingly
important in terms of increasing sales, as a result of the larger number of purchasing options, as
well as children increasingly being involved in the decision-making process.
Frozen and Marvel Avengers were very big in 2014, and companies which made investments
in such licenses did well. Walt Disneys Frozen film was so popular that it became a social
phenomenon. Its success was followed by a wide range of licensed products in toys and games,
such as dolls and accessories and action figures and accessories, as well as books, apparel
and home furnishings. In video games Atlantyca signed a licensing agreement with Nintendo to
offer the youngest consumers a range of topics for Nintendo 3DS, New Nintendo 3DS and New
2DS. These included the classic Geronimo Stilton. Images, icons and unique backgrounds are
included in a series of custom themes which can be purchased by owners of these consoles.
These include customisable background music, background images, icons and sound effects.
Cinderella from Kenneth Branagh took first place at the Italian box office with a total of 5 million
in just four days. The new Walt Disney movie was one of the great successes of 2015, and it
also beat the opening obtained by Maleficent in 2014, which will give a strong impetus to the
world of Disneys Princesses.
Outlook
Over the forecast period licensing is likely to continue to increase in Italy as a means for
players to increase sales. However, as a result of its high costs, licensing will continue to be a
risky business, and investments in this area will be made with due consideration. This will
especially be the case because of the difficult economic conditions. All players are seeking
strategies to maintain their shares, whilst simultaneously keeping a careful eye on their
spending. As a result, over the coming years the performance of licensed products in toys and
games is expected to be positive, whilst licensors will tend to wait for the stabilisation of
novelties, in an effort to reduce their risk. A problem with this strategy is that they risk waiting too
long, and being too late in their arrival.
In 2015 Frozen and Marvel Avengers are expected to experience a great deal of growth. Also,
Rainbow has announced the arrival of the second series of Mia and Me during the forecast
period, and has chosen Giometti cinemas to present the 26 episodes of the live-action fantasy
to children and adults. It combines in a unique and fascinating way daily real life events, full of
Passport
empathy for the younger generation, with an exciting fantasy adventure, inspired by the dreams
and wishes of children.
In 2015 AC Milan and Sanrio joined together to create the new collection AC Milan x Hello
Kitty. An exclusive co-branding was born from the collaboration between Sanrio, a global
company that owns the lifestyle brand Hello Kitty, and AC Milan, thanks to the master licensor
adidas Italy. The collaboration involved the creation of an exclusive collection, the launch of
which took place in mid-April 2015 at San Siro stadium. Hello Kitty was present on this occasion
at the stadium during the entrance of the teams. Announced for the first time at the Trade Show
Hong Kong in January 2015, this collaboration is dedicated to female AC Milan fans, both young
women and teenagers, and will include a graphic novel featuring Hello Kitty and Milanello, the
famous mascot of AC Milan.
Video Games Companies Strengthen Their Leadership in 2014, Whilst

Mattel Flags
The top two companies in toys and games in Italy are players in video games: Sony
Computer Entertainment Italia and Nintendo. This is thanks to their sizeable leadership within
video games, whilst traditional toys and games is more fragmented. The highest ranked player
in traditional toys and games in Italy in 2014 was Mattel Toys, which, following a slightly
stronger performance in 2013, lost notable value share in 2014. In fact, most companies
focusing on traditional toys and games lost value share within overall toys and games during
2014, due to the stellar performance of video games. One exception was LEGO, which
managed to maintain its value share in Italy, thus outperforming overall traditional toys and
games in 2014; globally it also had a successful year. A key contributor to the success of LEGO
came from the animated film The Lego Movie, which provided further exposure and a boost to
the sales of LEGO.
Outlook
In the future, the competition is expected to intensify within overall toys and games, as Sony
and Nintendo are expected to lose share in the absence of key new product launches.
Meanwhile, amongst the players in traditional toys and games, the battle between the two key
players Mattel and LEGO will increasingly be fought in the territory belonging to their
competitors and in terms of licensed films. Mattel is expected to follow LEGO in terms of its
internet presence, by launching new web platforms and apps in order not to lag behind its main
competitor and gain share. Meanwhile, local player Giochi Preziosi also needs to come up with
initiatives to stay competitive amidst the battle between the global corporations.
Improvements in Internet Access Create Opportunities for Digital

Gaming
The improvement of internet technologies, together with the reduction in the cost of the
service and the increase in mobile penetration (expected to reach 86% of the Italian population
in 2019) are supporting the growth of digital gaming. The growth in expenditure on access to the
internet supported growth in the categories within digital gaming in 2014, increasing the
potential users of digital services for all forms of content distribution. The growth in spending on
access to internet services had a strong impact on PC and console game downloads, online
games and mobile games. The goal remains the monetisation of consumer preferences once
they are connected to the internet. The significant growth in spending on internet access shows
that consumers consider access to the service to be part of everyday life, both in the personal
and the business spheres, thanks to the massive spread of mobile devices.
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Passport
In Italy there are more core PC, smartphone and tablet gamers than core static video console
gamers. PC, smartphone and tablet users are spending more time not just playing games, but
also creating and sharing videos about their favourite games with other gamers. They enjoy
watching live streams of other video games players practicing and competing with each other.
The popularity of mobile and online gaming is not surprising when considering the nation was an
early adopter of mobile phones in Europe and is well-known for its highly social lifestyle. Social
gaming is a new and interesting internet phenomenon, thanks to the popularity of Facebook and
the increasing desire of gamers to challenge each other in real time. These applications have
become part of everyday life for many users in Italy. As a result there is relatively high spending
by Italian players on mobile gaming.
Outlook
Video games in Italy is expected to see a growth trend in 2015, driven in particular by strong
growth in revenues of mobile and online games and PC and console game downloads, as well
as the success of the model of micro-payments with regard to the freemium type of games.
Game manufacturers will have to guarantee their users availability of content according to a
production and distribution model focused on the convergence of the means of enjoyment.
Sony and Microsoft are investing significant resources in the launch of their new static video
game consoles PlayStation 4 and Xbox One, which means that the consoles are not going away
any time soon. However, these products will face growing competition from different forms of
digital gaming, such as PC and console game downloads, online games and mobile games. The
growing number of tablets, smartphones and ultrabooks will lead to growth in sales of PC and
console game downloads, online games and mobile games in the years to come. Whilst the
prices of these devices have dropped, in terms of price reductions from consumer electronics
companies, wireless providers and also games developers, these devices lead in terms of
innovation, and are giving users the freedom to enjoy gaming at a lower cost. The popularity of
so-called freemium online and mobile games, whereby players can choose whether or not to
spend money in a game, means that more and more consumers are willing to spend. With the
average spend expected to increase, digital gaming in Italy is expected to maintain a high
growth rate. The trend of social gaming is expected to increase in the wake of the growth of
social networks in Italy.
MARKET DATA
Table 1
Sales of Toys and Games by Category: Value 2009-2014
EUR million
Traditional Toys and

Games
Video Games
Toys and Games
Source:
Table 2
2009
2010
2011
2012
2013
2014
1,340.6
1,358.9
1,316.1
1,289.9
1,251.6
1,257.9
1,500.9
2,841.5
1,555.7
2,914.6
1,493.2
2,809.3
1,485.6
2,775.5
1,459.0
2,710.7
1,678.2
2,936.1
Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Sales of Toys and Games by Category: % Value Growth 2009-2014
% current value growth

2013/14
2009-14 CAGR
2009/14 Total
Passport
Traditional Toys and Games

Video Games
Toys and Games
0.5
15.0
8.3
-1.3
2.3
0.7
Source:
Table 3
NBO Company Shares of Toys and Games: % Value 2010-2014
% retail value rsp

Company
Sony Computer
Entertainment Italia SpA
Nintendo Co Ltd
Mattel Toys Srl
Microsoft Italia SpA
Electronic Arts Europe
Activision Blizzard
Italia Srl
Giochi Preziosi SpA
LEGO SpA
Hasbro Italy Srl
Clementoni SpA
Ubisoft SpA
Rockstar Games Inc
La nuova Faro Srl
Smoby Toys Italia SpA
Artsana SpA
Grand Soleil SpA
Ravensburger SpA
Trudi SpA
Rovio Entertainment Ltd
FILA - Fabbrica
Italiana Lapis ed
Affini SpA
MGA Entertainment Inc
Famosa Italia SpA
Liscianigiochi Srl
Binney & Smith (Europe)
Ltd
Bontempi Group SpA
Warner Bros
Entertainment Inc
Halfbrick Studios Pty Ltd
NCsoft Corp
Lima Sky LLC
Elokence com Sarl
Others
Total
Source:
-6.2
11.8
3.3
2010
2011
2012
2013
2014
9.2
8.7
9.5
10.0
11.3
16.4
6.1
4.3
6.7
3.0
15.2
6.0
4.8
7.7
4.3
12.9
6.3
4.2
8.0
5.0
9.9
6.5
4.9
7.3
5.5
9.3
6.0
5.7
5.5
5.1
8.8
3.2
2.7
3.1
2.4
1.3
1.5
1.1
0.9
0.8
0.9
0.4
0.6
7.6
3.7
3.1
3.0
2.6
1.4
1.5
1.2
0.9
0.9
0.8
0.5
0.7
6.7
4.5
3.1
3.1
2.8
1.4
1.5
1.2
1.0
0.9
0.8
0.7
0.8
5.4
4.8
3.2
3.2
2.7
1.4
1.4
1.4
1.1
0.9
0.9
0.9
0.9
0.8
4.9
4.8
3.2
3.0
2.9
1.5
1.3
1.3
1.0
0.8
0.8
0.8
0.8
0.8
0.8
0.6
0.3
0.5
0.8
0.7
0.2
0.6
0.8
0.7
0.4
0.6
0.8
0.7
0.6
0.7
0.7
0.6
0.6
0.6
0.8
0.2
0.7
0.2
0.7
0.2
0.7
0.3
0.6
0.5
0.2
0.4
0.3
22.7
100.0
0.3
0.5
0.4
21.0
100.0
0.4
0.5
0.4
0.4
20.4
100.0
0.5
0.5
0.5
0.5
21.1
100.0
0.5
0.5
0.5
0.5
23.5
100.0
2013
2014
Table 4
LBN Brand Shares of Toys and Games: % Value 2011-2014
% retail value rsp

Brand
Company
2011
2012
Lego
PlayStation 3
Fifa
Gran Turismo
PlayStation 4
Call of Duty
Xbox One
Wii
Barbie
Grand Theft Auto
World of Warcraft
Just Dance
Fisher-Price
Sony PlayStation Move
Kinect
Sony PlayStation Vita
Xbox 360
Nintendo 3DS
Wii Remote
Smoby
Assassin's Creed
Chicco
Call of Duty: Elite
Super Mario Galaxy
Grand Soleil
Battlefield
Angry Birds
La Nuova Faro
Wii U
Gig
Others
Total
Passport
LEGO SpA
Sony Computer
Sony Computer
Sony Computer
Activision Blizzard
Italia Srl
Nintendo Co Ltd
Mattel Toys Srl
Rockstar Games Inc
Activision Blizzard
Italia Srl
Ubisoft SpA
Mattel Toys Srl
Sony Computer
Sony Computer
Nintendo Co Ltd
Nintendo Co Ltd
Smoby Toys Italia SpA
Ubisoft SpA
Artsana SpA
Activision Blizzard
Italia Srl
Nintendo Co Ltd
Grand Soleil SpA
Rovio Entertainment Ltd
La nuova Faro Srl
Nintendo Co Ltd
Giochi Preziosi SpA
3.7
4.1
4.5
4.1
4.8
3.0
4.8
2.6
2.4
1.0
2.7
0.9
2.9
1.7
2.2
2.1
1.1
2.1
1.7
1.9
2.1
1.9
3.7
1.8
1.2
2.4
1.8
1.5
0.9
1.8
1.8
1.4
1.6
1.8
1.8
1.6
1.5
1.5
1.1
1.4
1.0
1.2
1.5
1.1
1.2
1.5
1.2
1.3
1.3
1.2
1.4
-
1.3
1.5
1.1
1.3
1.2
1.2
1.8
2.1
1.5
1.3
0.8
1.2
0.8
1.6
1.9
1.5
1.3
0.9
1.2
0.9
1.4
1.3
1.0
1.2
1.0
1.1
1.0
1.2
1.1
1.1
1.0
1.0
1.0
1.0
1.0
0.9
1.9
0.5
0.8
0.9
60.0
100.0
0.9
1.0
1.7
0.7
0.8
0.7
0.9
57.7
100.0
0.8
0.9
1.2
0.8
0.8
0.7
0.8
56.5
100.0
0.9
0.8
0.8
0.8
0.7
0.7
0.7
57.2
100.0
Source:
Table 5
Distribution of Toys and Games by Format: % Value 2009-2014
% retail value rsp
- Store-Based Retailing
-- Grocery Retailers
--- Modern Grocery
Retailers
---- Convenience Stores
---- Discounters
---- Forecourt Retailers
---- Hypermarkets
---- Supermarkets
--- Traditional Grocery
2009
2010
2011
2012
2013
2014
89.5
19.1
16.7
88.1
19.0
16.9
85.6
18.7
16.9
82.5
18.7
16.9
79.9
18.5
17.0
79.0
18.1
16.9
2.8
10.0
3.9
2.4
2.8
10.1
3.9
2.1
2.7
10.1
4.0
1.9
2.7
10.2
4.0
1.8
2.6
10.4
4.0
1.5
2.5
10.5
3.9
1.2
Retailers
-- Mixed Retailers
--- Department Stores
--- Mass Merchandisers
--- Variety Stores
--- Warehouse Clubs
-- Non-Grocery
Specialists
--- Electronics and
Appliance Specialist
Retailers
--- Health and Beauty
Specialist Retailers
--- Home and Garden
--- Leisure and
Personal Goods
---- Sports goods stores
---- Traditional Toys
and Games Stores
---- Media Products
Stores
---- Other Leisure and
Personal Goods
--- Other Non-Grocery
Specialists
- Non-Store Retailing
-- Vending
-- Homeshopping
-- Internet Retailing
-- Direct Selling
Total
Source:
Passport
7.2
5.0
2.2
63.2
7.1
4.8
2.3
62.0
6.7
4.5
2.3
60.1
6.5
4.3
2.3
57.3
6.2
3.9
2.3
55.2
5.9
3.5
2.4
55.1
11.8
12.0
11.6
11.2
10.8
11.8
0.3
0.3
0.3
0.3
0.3
0.3
49.1
47.9
46.5
44.4
42.7
41.1
39.1
37.6
36.4
34.5
33.0
31.2
7.4
7.4
7.2
7.0
6.7
7.2
2.6
2.8
2.9
2.9
2.9
2.8
2.0
1.9
1.8
1.4
1.4
1.9
10.5
0.0
0.1
10.4
0.0
100.0
11.9
0.0
0.1
11.8
0.0
100.0
14.4
0.0
0.1
14.3
0.0
100.0
17.5
0.0
0.1
17.5
0.0
100.0
20.1
0.0
0.0
20.0
0.0
100.0
21.0
0.0
0.0
20.9
0.0
100.0
Table 6
Forecast Sales of Toys and Games by Category: Value 2014-2019
EUR million
Traditional Toys and

Games
Video Games
Toys and Games
Source:
Table 7
2014
2015
2016
2017
2018
2019
1,257.9
1,263.5
1,271.9
1,281.0
1,289.3
1,297.5
1,678.2
2,936.1
1,766.3
3,029.8
1,755.0
3,026.9
1,738.6
3,019.5
1,726.2
3,015.5
1,720.4
3,017.9
Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Forecast Sales of Toys and Games by Category: % Value Growth 2014-2019
% constant value growth
Traditional Toys and Games

Video Games
Toys and Games
2014/2015
2014-19 CAGR
2014/19 TOTAL
0.5
5.2
3.2
0.6
0.5
0.6
3.2
2.5
2.8
Source:
Passport
Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
SOURCES
Sources used during the research included the following:
Summary 1
Research Sources
Official Sources
Interactive Software Federation of Europe ISFE

ISTAT
Trade Associations
Associazione Editori Software Videoludico

Italiana - AESVI
Associazione Italiana Opere Multimediali
Interattive - AIOMI
Assogiocattoli
Giocattoli Sicuri
Licensing Italia
Sirmi SpA
Tie Toy
Trade association videogames & consoles
(AESVI)
Trade Press
ANSA
Corriere della Sera
Diredonna
Editoriale Duesse
Gamification
GDO WEEK
Global License
Il Sole 24 Ore
ItaliaOggi
Largo Consumo
Marketing Oggi
Mark-Up
Mediamente
Milano Finanza
Oneweb20
Playing.it
Sfera Editore
Tom's Harware
Toy Store
Passport
VG Chartz
Yahoo
Zeroventiquattro
Source:

Toys and Games in Italy

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