Insiders say 600 to 700 product series are set to be released each month this summer by around 60 toymakers.

Yell is expanding into Asian markets such as Taiwan and South Korea with its offbeat, cute toys, including its headline range of praying animal toys. Overseas customers account for about 10 per cent of its capsule toy sales.

Capsule toys in Japan are typically obtained via analogue-style dispensers in which customers insert a few hundred yen and turn a handle to release a prize. They are known by names such as gacha-gacha or gasha-pon – an onomatopoeic phrase for the sound of the turning handle, and the thud as the capsule drops.

According to Tomy, better known as Takara Tomy and one of the two big players in the market along with Bandai, the forerunner to today’s dispensers were first imported from the United States in 1965.

Their true breakthrough came in 1983, when erasers shaped like the buffed-up titular character from the anime and manga Kinnikuman ignited a craze among children, resulting in Bandai selling 180 million of these toys at the time.

Today, the market has diversified to include local products and miniaturised versions of everyday products such as washing detergents and bags of potato chips, which have proved popular with adult women.

An April consumer survey by entertainment company Happinet, which runs the Gashacoco chain of capsule toy stores, showed more than half of women in their twenties and thirties have bought at least one capsule toy since entering adulthood.

“With Japan’s child population falling, the last 10 years have seen makers shift to capsule toys with adults in mind,” says Yusuke Tsuzuki, director of the Japan Capsule Toy Association and head of Dreamcapsule, which operates the Dream Capsule store chain.

Currently, his business runs around 50 outlets across the country, whereas the chain comprised about 10 shops before the pandemic.

Store chains like Tsuzuki’s have expanded in part because the health emergency left many units vacant in shopping centres, he said, and because they do not require many staff to operate.

“Capsule toys used to be on street corners, inside supermarkets. But with the specialised stores, it turned out that having 100 or so capsule toy options in one place improves the conversion rate – as in how likely someone is to buy something,” said Yoshihiko Takahashi of exporter Hobico.

The popularity of capsule toys at home is encouraging entrepreneurs like Takahashi to try their hand at new markets abroad, too.

The former metals trader is focusing on Dubai, in the United Arab Emirates, as the Middle East is a fertile market for Japanese goods, with Takahashi citing the recent news that Saudi Arabia will host the world’s first Dragon Ball animation theme park.

So far, Takahashi’s company has succeeded in setting up toy machines at six Japanese restaurants in Dubai to dispense prizes for children’s lunches. He sees the capsules as a low-cost back-door product to get overseas businesses interested in importing more expensive items, such as sake.

He also aims to expand to airports, taking a cue from the capsule toy banks in Japanese airports that have proved a hit with travellers looking to spend spare yen before flying home.

Indeed, capsule toys are no exception to the benefits brought by inbound tourism in Japan in 2024, with the last three months seeing more than 3 million visitors enter per month and the country on track for its best-ever year for the tourism industry.

At the Magnet by Shibuya109 branch of Dream Capsule overlooking tourist hotspot and Tokyo icon Shibuya Scramble Crossing, around 70 per cent of the customers who come through are visiting tourists, the company says.

Its manager, Shosuke Sen, said that foreign customers are particularly keen on anime figures, as well as costlier “premium” capsule toys thanks to the yen’s weakness.

Cecilia Martinez, a 43-year-old from Sweden shopping with her husband and two young sons, said she had first discovered capsule toys on their current visit to Japan. She said she was taken by “the cuteness of it”.

“There’s figures, there’s keychains, there’s bags … my kids though, they’re not as interested as I am. I guess it’s my generation,” she said.

Yell’s Morikuni said: “Their image is cheap toys that give people a little hit of joy, a bit of fun. That’s a strong draw for people visiting Japan, too.

“It’s not necessarily that they really want them, but they’re kind of interested … that’s how we think about the toys, making something people realise they like when they see it.”