🧸 Japan has fewer children than at any time on record. By the industry's own count, its toy market has never been bigger. And now Toys R Us is reportedly handing its roughly 150 Japanese stores to the parent of discount chain Don Quijote. Behind the sale is a change in who buys toys.

Who is actually buying toys in Japan?

According to Japan's Ministry of Internal Affairs and Communications, the country had 13.29 million children under 15 as of April 1, 2026. That is the 45th straight annual decline and the lowest figure on record. In 2015 there were 16.17 million, so the child population has shrunk by about 18% in roughly a decade.

Over the same stretch, the domestic toy market grew. The Japan Toy Association, the industry's trade body, puts the market for fiscal 2025 (April 2025 to March 2026, measured at suggested retail prices) at ¥1.1664 trillion, about $7.4 billion. That is the fifth consecutive record since fiscal 2021 (the fiscal 2025 figure includes some preliminary estimates), and about 46% above the ¥800.6 billion ($5.1 billion) of fiscal 2015.

The largest category, card games and trading cards, reached ¥338.4 billion ($2.2 billion) in fiscal 2025. That is about 3.5 times its fiscal 2015 level of ¥96.1 billion, and roughly 30% of the whole market. The association points to a strong rebound for the Pokémon Trading Card Game. Bulk buying by resellers has grown so heated that in August 2026, official lottery sales of Pokémon cards in Japan began requiring identity checks with the national My Number card (our earlier report). Plush toys jumped 38.2% to ¥62.4 billion, and the "hobby" category of plastic models and figures climbed to ¥196 billion.

Meanwhile, "character toys" tied to children's TV shows and films fell from ¥88.5 billion in fiscal 2015 to ¥68.1 billion in fiscal 2025, a drop of about 23%. The association credits the market's growth to categories that captured "kidults" (a blend of "kids" and "adults," meaning grown-ups who buy toys for themselves) and inbound tourists.

What exactly is Toys R Us leaving?

According to reports by Nikkei, Kyodo News and Jiji Press on September 29-30, 2026, Toys R Us Japan, based in Kawasaki, will withdraw from running stores in Japan. Pan Pacific International Holdings (PPIH), which runs Don Quijote, is expected to take over about 150 Toys R Us and Babies R Us stores along with some 6,000 employees including part-timers. Nikkei reported that the deal could be worth around ¥10 billion (about $64 million) and that the exit could come as early as the end of this year. PPIH declined to comment, and as of September 30, 2026, neither company had made a formal announcement.

The seller is Toys R Us Asia, the Hong Kong-based parent. Nikkei Asia reported that the stores will keep the Toys R Us sign for a while, though it will eventually come off every one of them, and that PPIH plans a new format that adds products for adults, such as card games, alongside children's toys.

The first Japanese Toys R Us opened in December 1991, in Ibaraki Prefecture. Its arrival was widely seen as an outcome of the US-Japan Structural Impediments Initiative, talks in which Washington pressed Tokyo to remove trade barriers. When the US parent went bankrupt in September 2017, the Japanese business kept operating as part of the separate Asian unit.

Figures compiled by the Japanese business site LIMO from the company's public financial notices show that Toys R Us Japan's revenue fell from about ¥139.5 billion in 2018 to about ¥75.2 billion (about $478 million) in 2025, a decline of about 46%. It posted a net loss every year from 2019 through 2025, including a net loss of about ¥3.8 billion ($24 million) in 2025. Over roughly the same period, fiscal 2018 to fiscal 2025, the national toy market grew by about 40%.

Why a discount chain wants 150 toy stores

In the year to June 2026, PPIH's duty-free sales (tax-free purchases by foreign visitors) rose 31.2% to a record ¥228.6 billion ($1.5 billion), and it now has 99 stores with more than ¥100 million in annual duty-free sales. In its monthly sales report, PPIH said that in February 2026, trading cards and figurines grew solidly in its UNY supermarket business.

PPIH already sells to families, adult collectors and tourists, the same groups driving Japan's toy market. About 150 more large stores would give it far more room to sell to them. That makes the deal look less like cleaning up after a retreat than a deliberate acquisition.

On Hatena Bookmark, a popular Japanese social bookmarking site, one user argued that the brick-and-mortar toy store itself is a format in decline. Whether a loss-making network can be turned around will not be clear until the final terms are public.

A children's store becomes an adults' store

For decades, the toy shop was where parents took their kids. Toys R Us, with big-box stores concentrated in the suburbs, was the textbook example. If the new format stocks card games for adults, as reported, the person standing in front of those shelves will more often be a grown-up buying for themselves, or a tourist hunting for souvenirs.

Reactions online in Japan are split. Some people recall being overwhelmed by the sheer size of the stores as children. Others say recent visits felt half-empty and hope Don Quijote's trademark "compressed display" style, with goods packed into every inch of shelf space, will bring the energy back.

How toy stores are faring elsewhere

In the United States, Toys R Us closed its remaining stores in 2018. Brand owner WHP Global and partner Go! Retail Group announced on September 17, 2026, that they will open 120 new standalone stores for the 2026 holiday season, bringing the US total to 160, with collectibles such as Pokémon on the shelves. In Canada, the separately owned Toys R Us Canada sought creditor protection in February 2026, after closing 53 stores in the previous two years; it had 22 left when it filed. In June a court approved splitting up the business, and the rights to the brand in Canada and the operation of the stores went to different companies.

Market researcher Circana found that US toy sales for recipients aged 18 and older rose 25% in the first half of 2026, making adults the biggest contributor to the industry's growth. In the UK, kidults, defined there as people aged 12 and over buying toys for themselves, spent £1.2 billion in the 12 months to June 2025, or 31% of all toy spending. Japan is not an outlier. But in Japan, the shift is unfolding as the number of children falls steeply.

In your country, who is standing in the toy aisle these days: children, or adults buying for themselves?

Dollar figures are converted at ¥157.3 to the dollar as of September 30, 2026.

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