Current Situation in Early 2026
In early 2026, merchandising and brand licensing — agreements where companies grant rights to use intellectual property (IP) like characters or brands on products such as toys, apparel, or themed experiences — continue to drive major revenue in the consumer goods sector. The global licensed merchandise market reached over $307.9 billion in retail sales for 2024, marking a 10% increase from the previous year, according to License Global’s Top Global Licensors report released in mid-2025.
Disney led with approximately $63 billion in licensed product sales, followed by other giants like Authentic Brands Group, NBCUniversal, Hasbro, Warner Bros. Discovery, and The Pokémon Company International at around $12 billion. Mattel contributed about $8.8 billion, bolstered by lines tied to Disney Princess and other partnerships.
Toy industry performance supports this strength. U.S. toy sales grew 6-7% in dollar terms through the first three quarters of 2025, with licensed properties accounting for over one-third of sales and growing faster than non-licensed items. Collectibles surged 33-35%, driven by adult buyers (“kidults”) who now represent a significant portion of spending.
Apparel remains the top category, identified by 70% of brand owners as a key growth area for 2025-2026, followed by toys and games. A generational shift shows Gen Z slightly edging out millennials in licensed purchases, while Gen Alpha gains traction.
Experiential elements, like pop-ups and theme park integrations, expand licensing beyond physical goods. Deals like the announced LEGO-Pokémon partnership set for launches in 2026 highlight multi-category potential.
Predictions for 2026
In 2026, merchandising and brand licensing deals will emphasize hybrid physical-digital products and experiential tie-ins, with apparel and collectibles leading growth. Disney’s dominance continues, with new lines tied to upcoming releases boosting sales toward $65-70 billion annually. Marvel merchandising stabilizes post-consolidation, focusing on collectibles and apparel for adult fans.
Pokémon maintains strong momentum, with retail sales potentially exceeding $13 billion, fueled by trading cards, plush, and the new LEGO collaboration launching mid-year. This partnership introduces buildable sets appealing to both children and collectors, expanding into construction toys.
Mattel and Hasbro deepen entertainment partnerships. Mattel’s co-master toy deal with Hasbro for Netflix properties like “KPop Demon Hunters” results in shared lines of dolls, collectibles, and role-play items. Hasbro expands plush and games tied to its own IPs and licensed brands.
Experiential licensing grows, with theme park integrations and pop-ups driving premium merchandise. Disney’s ongoing park expansions in California feature exclusive shops for Marvel and other IPs. Smaller-scale attractions, like Mattel’s Adventure Park progress in Arizona, tie directly to toy sales.
Average royalty rates hold steady at 8-12% for top IPs, but volume increases through e-commerce and direct-to-consumer channels. Adult-oriented collectibles rise 20-30%, with lines for brands like Sanrio and Warhammer gaining from nostalgia.
Global deals focus on emerging markets, with apparel collaborations in Asia and food/beverage tie-ins rising. Overall, the market sees 8-10% growth, supported by multi-generational appeal and integrated experiences blending products with real-world activations.
Challenges and Risks
Saturation in key categories poses issues. Over-reliance on blockbuster IPs risks declines if major releases underperform, as seen in past cycles when toy sales dipped without strong content support.
Counterfeiting erodes value, particularly for high-demand items like Pokémon cards or Marvel figures. Economic pressures, such as inflation affecting discretionary spending, could slow growth in apparel and non-essential toys.
Supply chain disruptions delay launches, impacting timed merchandise for films or events. Generational shifts bring challenges: appealing to Gen Alpha requires sustainable, educational elements, while adult collectors demand premium quality.
Experiential deals face high costs; theme park integrations require significant investment, with delays possible in projects like new lands. Regulatory issues around child data in digital-hybrid products add complexity.
Deal overlaps, like shared master licenses, may confuse consumers or dilute brand exclusivity.
Opportunities
These trends create strong positives. Higher sales fund IP owners, supporting content creation. Disney and Pokémon use revenue to invest in new stories, benefiting creators.
Consumers gain diverse options: affordable apparel for self-expression, collectibles for investment-like appeal, and experiences for deeper engagement. Hybrid products, like app-connected toys, enhance play value.
Global expansion opens markets; Asia-Pacific growth in toys and apparel brings brands to new audiences. Adult buyers provide stable demand, less tied to child demographics.
Partnerships like LEGO-Pokémon foster innovation, combining building with character play. Experiential tie-ins boost loyalty, turning one-time buyers into repeat visitors.
Direct channels improve margins and data insights for tailored products.
Conclusion
In 2026 and beyond, merchandising and brand licensing will likely grow through apparel dominance, collectible surges, and experiential integrations, with leaders like Disney, Pokémon, and toy partners driving billions in sales. New collaborations, such as LEGO-Pokémon, highlight multi-category potential.
Risks like saturation, counterfeiting, and economic factors could temper gains, potentially slowing non-essential categories. Opportunities in adult markets, global reach, and hybrid innovations promise sustained abundance and creator support. Balanced strategies could maintain growth while adapting to consumer shifts.
