With toys comprising such a large and important part of human existence, it makes sense that the toy industry would have a substantial economic impact. Sales of toys often increase around holidays where gift-giving is a tradition. Some of these holidays include Christmas, Easter, Saint Nicholas Day and Three Kings Day.

In 2005, toy sales in the United States totaled about $22.9 billion.[8] Money spent on children between the ages of 8 and twelve alone totals approximately $221 million annually in the U.S.[12]

Toy makers change and adapt their toys to meet the changing demands of children thereby gaining a larger share of the substantial market. In recent years many toys have become more complicated with flashing lights and sounds in an effort to appeal to children raised around television and the internet. According to Mattel's president, Neil Friedman, "Innovation is key in the toy industry and to succeed one must create a 'wow' moment for kids by designing toys that have fun, innovative features and include new technologies and engaging content."

In an effort to reduce costs, many mass-producers of toys locate their factories in areas where wages are lower. 75% of all toys sold in the U.S., for example, are manufactured in China.[8] Issues and events such as power outages, supply of raw materials, supply of labor, and raising wages that impact areas where factories are located often have an enormous impact on the toy industry in importing countries.

Many traditional toy makers have been losing sales to video game makers for years. Because of this, some traditional toy makers have entered the field of electronic games and are enhancing the brands that they have by introducing interactive extensions or internet connectivity to their current toys.[13]