The Future of Kids Gaming

What the report says

For years, kids and family gaming — defined here as games intended for children ages 4 to 12 — has dwindled in importance and visibility. Despite being a pillar of the industry in prior decades, it has struggled to keep pace as kids increasingly graduate into UGC platforms like Roblox and Minecraft, while parents remain the gatekeepers for younger players.Two recent events point toward a reawakening of this unique subsector. In early 2026, gaming private equity shop Haveli bought Budge Studios, a Montreal-based studio focused on developing licensed children’s games, and Netflix launched a dedicated gaming app for kids.

This, of course, builds on top of Nex Playground resurrecting Wii-era motion gaming with licensed kids IP (check out our interview).The growing share of gaming engagement captured by cross-platform UGC ecosystems is one of the industry’s most obvious trends in recent years. Kids under 13 are especially drawn to Roblox and Minecraft. Modern kids’ game developers are increasingly prioritizing the early childhood window, targeting young players under eight who have not yet transitioned to UGC platforms and whose gaming options are largely guided by their parents.This is the defining characteristic of the kids gaming market: the players (kids) are not the ones who choose and pay for the content — the parents do.

After years of neglect from traditional publishers, a growing set of specialist game studios, big tech firms, and private equity investors are racing to own the years before kids graduate from the parent-dominated gaming dynamic and into Roblox.Gaming’s Most Unique SectorDeveloping, marketing, and monetizing games for the youngest of players is an almost completely different endeavor from traditional games. Kids’ attention and appetite for play are enormous, but monetization is deliberately limited. Aggressive, whale-driven F2P is impossible, and focusing on a narrower age range reduces the potential audience compared to games for adults, which makes traditional F2P less lucrative as well.

Key details

Nearly all successful products visibly promote themselves as IAP and IAA-free.Engagement can also be massive: Toca Boca World, the leading game in the market from toy firm Spin Master, has 50M MAU, 16th globally according to Spin Master’s data and comparable to Royal Match and Chess.com. However, average YTD ARPDAU of only $0.03 in comparison to Royal Match’s $0.19 (a 6x gap, according to Sensor Tower) highlights the monetization challenges.In the past, kids games were a meaningful part of traditional publishers’ businesses: EA operated an EA Kids label, Activision launched the innovative Skylanders franchise, Disney ran Club Penguin, and licensed kids games were the foundation of pre-bankruptcy THQ.

In the 2010s, kids gaming began shifting notably to mobile and Roblox, and the traditional publishers — along with the consoles they distribute content on — have increasingly focused on games for teens and adults. Even Nintendo, historically the most family-oriented publisher of all, has seen its audience rapidly transition from kids to adult enthusiasts in the post-Wii era.Today, that field has been ceded to a handful of specialist developers, toy/IP owners, platforms, and now streamers. Budge Studios, Travelers Tales, and Outfit7 are among the gaming-only firms operating meaningfully sized businesses in this sector. Content owners moving into games (Netflix, LEGO, Spin Master, and Mattel) are increasing, and curated subscriptions / walled gardens (Apple Arcade, Amazon Kids+) are a growing distribution channel.

The wildcard may be Nex Playground, a dedicated device for motion-controlled games almost entirely targeting kids.Across nearly all of these businesses, licensing is the connective tissue. Licensing is so important because it acts as a trust indicator to the buyers: parents. Parents choose the games their kids play almost exclusively until kids start school (usually around ages five to six), at which point kids’ peer networks start informing their content selection (in one peer-reviewed survey, ~53% of kids six to eight years old played Minecraft). By ages nine to 12, kids are almost always choosing their own games.

More from the announcement

The window for games made for children and sold to parents starts around ages two to three and peters out around six to eight.Although four or five years is a narrow window, this time period provides a meaningful opportunity for brands to build kids’ affinity for IP through gameplay and for platforms to capture value through parent-approved monetization models like subscriptions.Deep Dive: Netflix PlaygroundNeither Netflix nor Apple initially intended to establish dedicated kids’ businesses; instead, both companies gradually gravitated toward the sector through their respective subscription offerings. Apple Arcade’s no-ads, no-IAP library was initially pitched to everyone.

In its first few years, it signed many highbrow indie games, but its most durable use turned out to be a safe, curated place to hand a child a tablet. Apple has since leaned into this positioning, adding Nick Jr.