Iconic toy firm Playmobil has revealed its first sales fall in its 49 year history and blamed it on children abandoning traditional play for video games.

The German company’s classic toys have has been a Christmas stocking favourite for generations of youngsters.

But the company’s CEO Bahri Kurter has revealed the firm’s first trading fall since it was founded in 1974.

Sales fell from EUR 653 to EUR 614 million (GBP 565.38 to GBP 531.74 million) during the 2022/2023 financial year.

And Kurter blamed the slump on the loss of older children to computer and online games.

He told German weekly newspaper Zeit that children’s playing habits are changing, with rivals Lego already pushing to adapt to the digital era.

Kurter explained that a huge part of their original target of four to 10 year olds has disappeared.

He said: “Now Playmobil only works between four and eight years.”

Kurter explained that the firm needs to “get away from bans on thinking” and needs “more creativity.”

He said the toy company should open up on digital platforms with games like rivals Lego and “transform from a product into a brand”.

The Horst Brandstaetter Group, which owns the Playmobil brand, had previously announced that 700 of the toy company’s 4,000 jobs would be cut following talks with consultant firm McKinsey, according to reports.

Earlier this year, employees blamed the company’s financial woes on poor management.

Playmobil was invented by Hans Beck for the Horst Brandstaetter Group in 1974. Its main competitor is the Danish company Lego.