Disney’s Star Wars merchandise stuffed toys depicting Grogu character, commonly known as Baby Yoda. Chukrut Budru |Sopa Images | Lightrocket | Getty ImagesThere are two things keeping the toy industry afloat right now: inflation and a consumer group known as “kidults.” These kids at heart are responsible for one-fourth of all toy annual sales, around $9 billion worth, and are the biggest driver of growth throughout the industry, according to data from the NPD Group.This cohort, which NPD defines as ages 12 and older, has been steadily contributing to the industry for years, but spending has accelerated in the wake of the pandemic, leading to year -over-year gains despite tough comparisons. It’s an important moment for the toy industry, too, with the holiday season upon us. While sales surged across the board for board games, puzzles and playsets during the pandemic, the first nine months of 2022 saw a 3% decline in sales volume. Higher toy prices helped outweigh these losses, as sales revenue for the time period jumped 3%, NPD reported.Kidults, who tend to spend more on toys, have a great fondness for cartoons, superheroes and collectibles that remind them of their childhood. They buy merchandise such as action figures, Lego sets and dolls that might typically be considered “for kids.” However, in recent years, toy makers have created product lines just for these consumers, realizing that demand is high for this generation of adults who still want to have fun. “The definition of adulthood has definitely evolved,” said Jeremy Padawer, chief brand. officer at toy company Jazwares. “What it used to mean, to be an adult, was to be a very upstanding, serious member of society. And to do that you had to demonstrate it intellectually, emotionally, in every other single way.” more free to express our fandom as a part of our adulthood,” he said. In the ’70s and ’80s, the toy business began to shift away from being an industry that was just about the next innovative item and embraced creating more product based on entertainment franchises. To be sure, there were toys based on movies and TV shows prior to this time, but this is when the trend kicked into high gear.” In 1977, ‘Star Wars’ launches, and you started seeing a lot more licensed product at retail , where we were celebrating our fandom with with toys and collectibles,” Padawer said. This included nontoy merchandise such as bedsheets, crockery and clothing. “At the time, the intended recipient was almost all kids,” he explained. But those children who were born in the ’70s and ’80s were really the first generation that had this much licensing and this much product that was available for them to demonstrably attached to. And it’s not a big surprise, then that those kids are Their 30s and 40s, that they continue to demonstrate that.” It became more consequential to the bottom lines of toy companies in the last five years, said James Zahn, editor in chief of “The Toy Book” and senior editor of “The Toy Insider.”Toy manufacturers such as Lego embraced these consumers and created lines, often tied to nostalgic entertainment properties, just for this cohort. Hasbro’s Black Series for action figures, is a prime example of this, tapping into the desire for high-quality Star Wars and Marvel collectibles. Even Mattel has lines from Barbie and Hot Wheels that are designed specifically for this group of buyers. Toy companies have even begun creating their own television and movie content in order to support toy lines. Mattel launched its own internal movie company and is set to release “Barbie” in July 2023 and Hasbro bought eOne and will set “Dungeons & Dragons: Honor Among Thieves” in theaters in March.These films are not designed for young kids, instead catering to this older group of toy-loving consumers. Other brands, such as Funko, have always catered toward adult collectors who are in-tune with their inner kid.But nostalgia doesn’t have to be tied to intellectual property. this generation does take their jobs very seriously, but at the end of the day, they also want to have fun,” said Josh Shave, senior director of marketing for Razor. Razor began selling its classic kick scooter in 2000. Within six months, the company had sold more than 5 million units.”Twenty years later, all those kids have grown up,” Shave said, noting that Razor has created electric versions of its scooters and ride-ons just for these folks. Literally the adult version of the kick scooter, bu t it’s electric,” he said. “I just got done with an event and everyone says the same thing, ‘Oh, my goodness, I’m so glad they came up with all these adults. I’m so glad they came up this reminds me of…’ and they would tell me a story.” The Razor Icon, which can reach 18 miles per hour, retails for $600 and is part of the company’s wider collection of items for kidults. There’s also the Rambler, a take on the retro mini motor-bike, which looks like a swoop bike from the ’60s and can reach 15.5 miles per hour. It retails for $660. Lego Star Wars toys sit on display inside a Toys “R” Us Inc. store in Paramus, New Jersey, US, on Tuesday, Nov. 26, 2019. Bloomberg | Getty ImagesZahn also pointed to Basic Fun as another example of a company transforming its traditionally kid-centric toys into unique items for adults. The toy manufacturer partnered with Netflix to create a larger version of its Lite-Brite set based on Stranger Things that can be hung as artwork. It costs $100. “And a lot of that we saw expanded during the pandemic because people went home and they rediscovered play,” Zahn said. That connection with imagination didn’t end with the lockdowns. In the last 12 months ending September, the kidult group represented 60% of the dollar growth in the industry, despite accounting for only a quarter of sales, according to NPD’s Checkout data.”So, it’s been a huge windfall,” said Juli Lennett, vice president and industry advisor for NPD’s US toys practice.Still, the stakes remain high for the toy industry as it heads into the final weeks of the year.Inventory has been a major challenge for retailers across the board. Supply chain snafus threatened to make shelves bare for holiday shoppers last year, leading many big-box stores to hedge their bets on how much merchandise to order and receive deliveries earlier than usual. As the supply chain loosened, many had excess inventory, leading to sharper discounts as demand waned. Some companies, such as MGA Entertainment, which is the manufacturer of LOL Surprise dolls, decided to offer more items that sell for under $15 in order to cater to more cost conscious parents. CEO Isaac Larian told CNBC that the company had about 20 products that sold between $5 and $15 last year. This year, there are more than 200.Kidults, on the other hand, are a coveted consumer because they are often willing to spend more money than others on items for themselves.”Right now, adult toy buyers are the reason for growth in the toy business,” Larian said.