Toys and Play: LEGO, Pokémon, Labubu and Toy Safety — 2026-10-28
Pop Mart faces a severe financial downturn with Q3 revenue plunging 45-50% as Labubu demand collapses, contrasting sharply with LEGO's continued momentum. Meanwhile, US toy safety authorities issued urgent recalls for Amazon-sold toys and counterfeit squishies, highlighting persistent choking and battery ingestion risks.
Toys and Play: LEGO, Pokémon, Labubu and Toy Safety — 2026-10-28
Top developments
Pop Mart’s Labubu Bubble Bursts
Pop Mart reported a catastrophic drop in third-quarter revenue, declining between 45% and 50% year-over-year as global demand for Labubu blind boxes evaporated. The slump was most acute outside China, with sales in the Americas and Asia Pacific dropping more than 65%. This reversal marks a sharp departure from the previous year, when the same quarter saw 245-250% growth, signaling that the "single-hit" reliance on Labubu has backfired.
LEGO Watchlist and Retirement Updates
The LEGO Group continues to dominate the toy sector, with recent analyst updates noting that "SOLD OUT" status on LEGO sets is becoming less reliable as holiday stock levels adjust. While specific H1 2026 results showing 21% revenue growth were published in August, current market watchers are focusing on how LEGO’s strong brand relevance allows it to maintain pricing power even as competitors like Pop Mart struggle.
Urgent Toy Safety Recalls
The US Consumer Product Safety Commission (CPSC) issued a nationwide recall for over 6,500 toys sold on Amazon due to serious injury risks from battery ingestion and magnet hazards. Specific recalls include Kori Gey water toy kits and Montessori busy boards, which violate mandatory safety standards and pose risks of intestinal injury or death if small batteries or magnets are swallowed.
Pokémon Merchandise Surge in Japan
In Japan, Pokémon merchandise remains a top sales driver, with the "MEGA 30th CELEBRATION" card sets topping Amazon’s toy rankings. New plush toys and lifestyle goods, such as Pokémon-themed rugs and stationery, are launching in late October, capitalizing on the franchise's enduring popularity despite the broader market fluctuations seen in other collectible sectors.
Local view
China: Chinese media outlets are closely analyzing the "collapse" of Pop Mart’s valuation, with 21st Century Business Herald noting that even prominent investors like Duan Yongping are facing significant paper losses as the stock prices adjust to the new reality of declining blind-box demand. Smzdm analysts suggest that the secondary market for Labubu has cooled dramatically, with many items now selling below their original retail price.
Japan: Japanese hobby outlets like Dengeki Hobby Web highlight the continued strength of Pokémon products, emphasizing that character-driven merchandise remains resilient compared to generic blind-box trends. Inside Games reports on the steady release of new Pokémon prizes and goods, indicating a stable pipeline for the franchise.
Context & numbers
- Pop Mart Q3 Revenue: Down 45-50% year-over-year globally; Americas down 70-75%; Asia Pacific down 65-70%.
- LEGO H1 2026 Performance: Revenue up 21%, operating profit up 22%.
- US Toy Industry Trends: Games and puzzles grew 39% (driven by Pokémon), while building sets grew 20% (driven by LEGO) in the first half of 2026.
- Recall Volume: Over 6,500 Amazon-sold toys recalled for battery and magnet hazards.
On the radar
- Holiday Recalls: Consumers are advised to check the CPSC website regularly as the holiday shopping season begins, with recent alerts on counterfeit squishy toys and burn hazards.
- LEGO Retirement List: Brick fans are closely monitoring the "retiring soon" lists for October 2026, as hundreds of sets are scheduled to leave the market by year-end.
- Pop Mart IP Diversification: Analysts are watching to see if Pop Mart’s other IPs, such as Zsiga, can compensate for the Labubu decline, though current data suggests they are too small to offset the loss.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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