Zhongjin: The AI toy industry is gradually transitioning towards becoming "emotion service terminals".

CICC released a research report stating that AI toys, with "human-machine empathy" and "IP ecosystem matrix" as the core, achieve "AI companionship" in offline scenarios, creating a new paradigm of "immersive companionship". Currently, many domestic and foreign companies have entered the field, and the frequency of AI toys appearing at various technology and consumer exhibitions (such as CES 2025/MWC and AWE) is gradually increasing. With the empowerment of AI+IP, the AI toy industry is gradually transforming into an "emotional service terminal". Recommended targets in the IP field include ALI PICTURES (01060) (Aliyu IP commercialization full-chain platform advantage), CHINA LIT (00772) (rich online literature resources, IP copyright operation and development), Shanghai Film (601595.SH) (updates on Shanghai IP and collaborative companies), POP MART (09992), etc. CICC's main points are as follows: Frequent launch of AI toy products in the competition track, enhancement of AI capabilities to meet demand, technological iteration to enhance "intelligence" CICC believes that the core reason for the increasing popularity of the AI toy competition track is: 1) the rise of demand-side "lonely economy" (children's companionship, elderly care, young singles, etc.), with high acceptance of technology by 80/90s parents in children's scenarios, willing to pay a premium for educational/companion products, while also experiencing "AI anxiety", AI toys correspondingly meet the demand and alleviate the "anxiety". 2) On the supply side, the improvement of AI technology capabilities supports a stronger and smoother interactive experience, and the level of toy responsiveness increases. As of now, many companies in China have entered the AI toy competition track, including unlisted startups (Leapfrog Innovation, FoloToy) and some listed companies (Alpha Group, Zhejiang Jinke Tom Culture Industry, Shifeng Cultural Development), etc. Core competitiveness: interactive technology, IP attributes, and business positioning 1) At the technical level, emphasis is placed on optimizing the interactive experience (response speed, appropriateness of tone), accuracy of model calls (meeting demands in different scenarios), and cost control capabilities. 2) In terms of image, emphasis is placed on adapting IP images or native images to different audiences, on one hand, leveraging the inherent trust endorsement of IP to improve user acquisition efficiency and reduce acceptance thresholds; on the other hand, further deepening the emotional companionship, enhancing the emotional value of products, and increasing user stickiness. 3) In terms of business positioning, clear positioning of target audiences, deep exploration of vertical markets. Future space and challenges: Market growth depends on population penetration and expansion, still need to pay attention to children's privacy, usage safety, and other risks CICC believes that in terms of market growth, the core focus is on: 1) penetration and coverage of children, first supporting the coverage of existing population, and then further considering issues such as birth rate; 2) expanding the population for market expansion, including young people, silver-haired populations (for anti-aging transformation), etc. It also points out the need to pay attention to the risks it may face, including but not limited to: 1) risks of minors using toys due to lack of self-control and judgment; 2) risks of social interaction deficiencies due to excessive reliance on toys; 3) children's information privacy and security, etc. From a challenge perspective, it mainly focuses on: 1) whether technology can further upgrade and integrate to enhance interaction fluency, emotional response accuracy, etc.; 2) looking further into the future, whether the track will be replaced by larger-capacity whole-house smart homes, general household Siasun Robot&Automation, etc. Risk factors Risks of children's information security and privacy, risks of minors using products, ethical and responsibility definition issues, AI technology iteration falling short of expectations, increased competition, new product development falling short of expectations.