This article was originally published in the May/June 2017 edition of The Toy Book.

In 2016, gadgets were the star of the show on Amazon.com. Fitbit and Roomba, two “intelligent” devices, were among the most purchased items. When it comes to Toys, this trend was even more pronounced, with the ultimate gadget – robots – leaving all other toys in their dust. And with the recent release of Amazon Lex, the company has proven its commitment to having a major role in robotics.

The unchallenged toy of the year on Amazon was Cozmo, the intelligent robot for kids from San Francisco-based artificial intelligence start-up Anki. The cute, palm-sized robotic pet currently sells for $172.99 on Amazon.com and brought in $15 million in 2016 – and Anki has more than just Cozmo to celebrate about. Overdrive, the follow-up to their first product Drive, (the most successful toy on Amazon.com in 2015) held on to second place last year. The Anki Overdrive Starter Kit, a toy car set with a customizable racetrack which, once built, can be raced on by robotic cars with one or more of them controlled by the player via an app on their mobile device, generated $10 million in sales, just behind the same company’s Cozmo robot.

robots top of amazon toy sales 2016 data analysis report

When new market entrants experience this kind of runaway success, it’s a sign that they’ve identified and addressed a market trend that incumbents have failed to capitalize on. But Anki’s robotic toys were not the first to market. LEGO, historically one of Amazon’s most successful first-party vendors, has been developing its Mindstorms series of intelligent toys for years, with their latest robot EV3 generating $6 million in sales to secure a place as the 4th best-selling toy of 2016 (down from the 2nd place in 2015).

Overall, Robotic Toys grew by 40% to climb into the top 25 Toy categories on Amazon.com last year, with total sales in excess of $25 million. The category spans a variety of Toy sub-categories from Vehicles and Boys Role Play to Learning & Explorations and the broader Drone category.

amazon's top selling robots toys data analysis report

 
Vehicles1. Anki Overdrive Starter Kit
2. Hot Wheels Ai Intelligent Race System Starter Kit
3. Maisto R/C Rock Crawler Radio Control Vehicle
4. Air Hogs, Thunder Trax RC Vehicle
5. Tyco Terra Climber Radio Control Vehicle
Boys Role Play1. Cozmo
2. Bloxels: Build Your Own Video Game
3. Minecraft Stop-Motion Animation Studio
4. View-Master Virtual Reality Starter Pack
5. ThingMaker 3D Printer
Learning & Exploration1. WowWee CHiP Robot Toy Dog
2. Snap Circuits Jr. Discovery Kit
3. Wonder Workshop Dash Robot
4. Ozobot Starter Kit
5. Thames & Kosmos Remote Control Machines
Drones1. DJI Phantom Quadcopter Drone
2. Autel Robotics X-Star Drone
3. Yuneec Typhoon Hexacopter Drone
4. 3DR Solo Drone Quadcopter
5. AirDog – The Autonomous Action Sports Drone
 Not all of these toys are equipped with artificial intelligence. The common qualifier is that these “tech” toys have features that react to external human commands or build programming skills (this is the reason that some non-robotic gadgets such as remote control vehicles get lumped into the Robotic Toys umbrella). Despite the broadness of the category, genuine AI drives the most sales on Amazon. For example, in addition to Anki’s claim on the top two best-selling toy spots and LEGO’s place in the top 5, the 6th best-selling toy last year was the Osmo Genius Kit, an AI-enabled education gaming platform, earning $5 million in sales.

Amazon Lex Opening More Doors

Outside of toys, artificial intelligence was no less successful. The top selling item overall on Amazon.com during the 2016 holiday season was Amazon Echo, the voice-activated speaker which connects to Amazon’s intelligent Alexa Voice Service.

In April, Amazon announced that they have now made Lex, the technology that powers the Alexa virtual assistant, available to developers (previously available in a “preview” edition). In their own words: “You can use Amazon Lex to build chatbots and other types of web & mobile applications that support engaging, lifelike interactions. Your bots can provide information, power your application, streamline work activities, or provide a control mechanism for robots, drones, and toys” (emphasis mine).

This openness is part of Amazon’s larger strategy, as we can see in their promise to make the technology powering Amazon Echo, including the microphone that listens to Alexa commands and the software that decodes them, available to third-party manufacturers. This suggests that Amazon is very intent on playing a major role in the further development of AI, robotics, drones and toys. Even if new developers make use of this technology to improve on Amazon’s designs and manage to outcompete their products, Amazon still owns the core software. This is classic vertical integration: Amazon owns both the underlying technologies and Amazon.com, a platform that is a proven destination for shoppers seeking out robotic toys.

Ultimately Amazon Lex, a proven AI technology, will create more opportunities for new and existing toy companies to bring more robotic toys to market. Consumer trends are already shifting toward robotics and AI and it’s clear that Amazon means to shepherd that trend.

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